STOCKHOLDERS' AGREEMENT
DATED AS OF
July 29, 2003
AMONG
JOSTENS HOLDING CORP.
AND
THE STOCKHOLDERS PARTIES HERETO
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS........................................................2
SECTION 1.01. Definitions.................................................2
ARTICLE 2 CORPORATE GOVERNANCE..............................................11
SECTION 2.01. Composition of the Board...................................11
SECTION 2.02. Removal....................................................11
SECTION 2.03. Vacancies..................................................11
SECTION 2.04. Charter or Bylaw Provisions................................12
ARTICLE 3 RESTRICTIONS ON TRANSFER..........................................12
SECTION 3.01. General Restrictions on Transfer...........................12
SECTION 3.02. Legends....................................................13
SECTION 3.03. Permitted Transferees......................................13
SECTION 3.04. Restrictions on Transfers by Management Stockholders.......14
ARTICLE 4 TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS;
PREEMPTIVE RIGHTS.................................................15
SECTION 4.01. Tag-Along Rights...........................................15
SECTION 4.02. Drag-Along Rights..........................................17
SECTION 4.03. Additional Conditions to Tag-Along Sales and
Drag-Along Sales...........................................20
SECTION 4.04. Repurchase Rights..........................................20
SECTION 4.05. Preemptive Rights..........................................23
ARTICLE 5 REGISTRATION RIGHTS...............................................25
SECTION 5.01. Demand Registration........................................25
SECTION 5.02. Piggyback Registration.....................................27
SECTION 5.03. Lock-Up Agreements.........................................28
SECTION 5.04. Registration Procedures....................................28
SECTION 5.05. Indemnification by the Company.............................32
SECTION 5.06. Indemnification by the Participating
Stockholders...............................................32
SECTION 5.07. Conduct of Indemnification Proceedings.....................33
SECTION 5.08. Contribution...............................................34
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TABLE OF CONTENTS
(continued)
Page
SECTION 5.09. Participation in Public Offering...........................35
SECTION 5.10. Other Indemnification......................................35
SECTION 5.11. Cooperation by the Company.................................35
SECTION 5.12. No Transfer of Registration Rights.........................36
SECTION 5.13. S-8 Registration Following IPO.............................36
ARTICLE 6 CERTAIN COVENANTS AND AGREEMENTS..................................36
SECTION 6.01. Confidentiality............................................36
SECTION 6.02. Restrictive Covenants......................................37
SECTION 6.03. Conflicting Agreements.....................................37
ARTICLE 7 MISCELLANEOUS.....................................................38
SECTION 7.01. Stockholders Representative................................38
SECTION 7.02. Binding Effect; Assignability; Benefit.....................38
SECTION 7.03. Notices....................................................38
SECTION 7.04. Waiver; Amendment; Termination.............................39
SECTION 7.05. Fees and Expenses..........................................40
SECTION 7.06. Governing Law..............................................40
SECTION 7.07. Jurisdiction...............................................40
SECTION 7.08. Waiver of Jury Trial.......................................41
SECTION 7.09. Specific Enforcement; Cumulative Remedies..................41
SECTION 7.10. Entire Agreement...........................................41
SECTION 7.11. Captions...................................................41
SECTION 7.12. Pronouns...................................................41
SECTION 7.13. Spouses....................................................41
SECTION 7.14. Severability...............................................42
SECTION 7.15. Counterparts; Effectiveness................................42
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STOCKHOLDERS' AGREEMENT
AGREEMENT dated as of July 29, 2003 among:
(i) JOSTENS HOLDING CORP., a Delaware corporation (the "Company");
(ii) DLJ Merchant Banking Partners III, L.P., DLJ Offshore Partners
III-1, C.V., DLJ Offshore Partners III-2, C.V., DLJ Offshore Partners III, C.V.,
DLJMB Partners III GmbH & Co. KG, Millennium Partners II, L.P. and MBP III Plan
Investors, L.P. (together, the "DLJMB Funds"); and
(iii) the individuals named as Management Stockholders on the
signature pages hereof, and the individuals who are members of management and
become a party to this Agreement after the date hereof pursuant to the terms
hereof (collectively, as listed on Schedule A hereto, which may be amended by
the Company to reflect changes in the Management Stockholders from time to time,
the "Management Stockholders").
If any DLJMB Funds shall hereafter Transfer any of their Company
Securities to any of their respective Permitted Transferees (as such terms are
defined below), the term "DLJMB Funds" shall mean the DLJMB Funds and such
Permitted Transferees, taken together, and any right, obligation or action that
may be exercised or taken at the election of the DLJMB Funds may be exercised or
taken at the election of the DLJMB Funds and such Permitted Transferees.
If any Management Stockholder shall hereafter Transfer any of his or
her Company Securities to any of his or her Permitted Transferees, the term
"Management Stockholder" as applied to such Management Stockholder shall mean
such Management Stockholder and his or her Permitted Transferees, taken
together, and any right, obligation or other action that may be exercised or
taken at the election of such Management Stockholder may be exercised or taken
at the election of such Management Stockholder and his or her Permitted
Transferees.
W I T N E S S E T H :
WHEREAS, the Company is a party to the Agreement and Plan of Merger,
dated as of June 17, 2003 (the "Merger Agreement"), among the Company, Ring
Acquisition Corp. and Jostens, Inc.;
WHEREAS, upon the occurrence of the merger and other transactions
contemplated by the Merger Agreement, the DLJMB Funds and the Management
Stockholders will own all of the outstanding Common Shares (as defined herein);
and
WHEREAS, the parties hereto desire to enter into this Agreement to
govern certain of their rights, duties and obligations after consummation of the
transactions contemplated by the Merger Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein and in the Merger Agreement, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein,
have the following meanings:
"Adverse Person" means any Person who, either directly or through an
Affiliate, is a competitor of, or is otherwise materially adverse to, the
Company or any of its Subsidiaries as reasonably determined by the Board in good
faith.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person; provided that no securityholder of the Company or Intermediate
Holdings shall be deemed an Affiliate of any other securityholder solely by
reason of an investment in the Company or Intermediate Holdings . For the
purpose of this definition, the term "control" (including, with correlative
meanings, the terms "controlling", "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise.
"Aggregate Ownership" means, with respect to any Stockholder or group
of Stockholders, the total number of the relevant class of Company Securities
owned (without duplication) by such Stockholder or group of Stockholders as of
the date of such calculation, calculated on a Fully-Diluted basis.
"Board" means the board of directors of the Company.
"Buhrmaster" means Robert Buhrmaster.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized by law to close.
"Bylaws" means the bylaws of the Company, as the same may be amended
from time to time.
"Cause" shall have the meaning assigned to such term in the Plan.
"Charter" means the Certificate of Incorporation of the Company, as
the same may be amended from time to time.
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"Closing Date" means July 29, 2003.
"Common Shares" means shares of Common Stock.
"Common Stock" means the Company's Class A Voting Common Stock, par
value $0.01 per share, and the Class B Non-Voting Common Stock, $0.01 par value
per share, collectively and any stock into which such Common Stock may
thereafter be converted, changed, reclassified or exchanged.
"Company Securities" means (i) the Common Stock, (ii) any other common
stock issued by the Company, Intermediate Holdings or Jostens and (iii) any
securities convertible into or exchangeable for, or options, warrants or other
rights to acquire, Common Stock or any other common stock issued by the Company,
Intermediate Holdings or Jostens.
"Disability" shall have the meaning assigned to such term in the Plan.
"DLJMB" means DLJ Merchant Banking Partners III, L.P.
"DLJMB Funds" shall have the meaning set forth in the recital.
"Drag-Along Portion" means, with respect to any Other Stockholder in a
Drag-Along Sale (as defined in Section 4.02), the Aggregate Ownership of the
relevant class of Company Securities by such Other Stockholder multiplied by a
fraction, the numerator of which is the aggregate number of that class of
Company Securities proposed to be sold by the Drag-Along Seller (as defined in
Section 4.02) in the applicable Drag-Along Sale and the denominator of which is
the Aggregate Ownership of that class of Company Securities by the Drag-Along
Seller at such time.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" with respect to the Company Securities as of any
date of determination, means:
(i) $100.00 per share of Common Stock as of the date hereof;
(ii) if the Company Securities are listed or admitted to trading on a
national securities exchange in the United States or reported through The Nasdaq
Stock Market ("Nasdaq") then the closing sale price on such exchange or Nasdaq
on such date or, if no trading occurred or quotations were available on such
date, then the closest preceding date on which such Company Securities were
traded or quoted; or
(iii) if not so listed or reported but a regular, active public market
for the Company Securities exists (as determined in the sole discretion of the
Board, whose discretion shall be conclusive and binding), then the average of
the closing bid and ask quotations per Company Security in the over- the-counter
market for such Company Securities in the United States on such date or, if no
such quotations are available on such
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date, then on the closest date preceding such date. For purposes of the
foregoing, a market in which trading is sporadic and the ask quotations
generally exceed the bid quotations by more than fifteen percent (15%) shall not
be deemed to be a "regular, active public market."
If the Board determines that a regular, active public market does not
exist for the Company Securities, the Board shall determine the Fair Market
Value of the Company Securities in its good faith judgment based on the total
number of shares of Common Stock then outstanding, taking into account all
outstanding options, warrants, rights or other securities exercisable or
exchangeable for, or convertible into, shares of Common Stock. The Board shall
make its determination of Fair Market Value from time to time, but not less than
annually (the "Valuation") and such determination shall remain in effect until
the Board makes the next Valuation (provided that, at any relevant date of
determination, the Valuation approximates the Fair Market Value at that date
and, if it does not, the Board shall make a new determination of Fair Market
Value which shall apply retroactively at such date of determination).
Notwithstanding the foregoing, if an investment banker or appraiser appointed by
the Board makes a determination of Fair Market Value subsequent to a Valuation,
such subsequent determination shall supersede the Valuation then in effect and
shall establish the Fair Market Value until the next Valuation.
"Fully-Diluted" means, with respect to any class of Company
Securities, all outstanding shares and all shares issuable in respect of
securities convertible into or exchangeable for such shares, all stock
appreciation rights, options, warrants and other rights to purchase or subscribe
for such class of Company Securities or securities convertible into or
exchangeable for such class of Company Securities; provided that if any of the
foregoing stock appreciation rights, options, warrants or other rights to
purchase or subscribe for such class of Company Securities are subject to
vesting, the Company Securities subject to vesting shall be included in the
definition of "Fully-Diluted" only upon and to the extent of such vesting.
"group of Stockholders" means a "group" of Stockholders, as such term
would be interpreted under Section 13(d) of the Exchange Act.
"Good Reason" means with respect to any Management Stockholder, "good
reason" as defined in any effective employment agreement between the Company and
such Management Stockholder, or in the absence of any such definition, the
following: (i) a material reduction in the Management Stockholder's title(s),
status, position(s), authority, duties or responsibilities as an executive of
the Company or its Affiliates other than such a reduction caused by an
insubstantial and inadvertent action that is remedied by the Company or its
Affiliates promptly after the Chief Executive Company (or the Chair of the
Compensation Committee of the Board if the Management Stockholder in question is
the Chief Executive Officer) becomes aware of the reduction; (ii) a reduction by
the Company or any of its Affiliates in the Management Stockholder's base pay,
or an adverse change in the form or timing thereof; (iii) the Company's or any
of its Affiliates' requiring the Management Stockholder to be based more than
thirty (30)
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miles from where his or her office is located immediately prior to the change,
except for required travel on the Company's or any of its Affiliates' business;
or (iv) any failure by the Company to comply with any provision of this
Agreement, the Plan and any stock option agreement between the Company and such
Management Stockholder other than an insubstantial or inadvertent failure not
occurring in bad faith and which is remedied by the Company promptly after
written notice by such Management Stockholder to the Company.
"Initial Ownership" means, with respect to any Stockholder or group of
Stockholders, the Aggregate Ownership by such Stockholder or group of
Stockholders as of the date hereof (or, in the case of any Management
Stockholder who becomes a party to this Agreement after the date hereof, as of
the date of joinder to or entry of such Management Stockholder into this
Agreement), in each case taking into account any stock split, stock dividend,
reverse stock split or similar event.
"Initial Public Offering" means the first Public Offering of
Common Stock after the date hereof with aggregate gross proceeds to the Company
and all selling stockholders in an amount equal to or greater than $100.0
million.
"Intermediate Holdings" shall mean Jostens IH Corp., a Delaware
corporation.
"Jostens" means Jostens, Inc., a Minnesota corporation.
"NASD" means the National Association of Securities Dealers, Inc.
"Other Stockholders" means all Stockholders other than the DLJMB
Funds.
"Permitted Transferee" means:
(i) in the case of any DLJMB Fund, (A) any other DLJMB Fund,
(B), any shareholder, member or general or limited partner of any
DLJMB Fund (a "DLJMB Partner"), and any corporation, partnership,
limited liability company, or other entity that is an Affiliate of any
DLJMB Partner (collectively, "DLJMB Affiliates"), (C) any managing
director, general partner, director, limited partner, officer or
employee of any DLJMB Fund or any DLJMB Affiliate, or any spouse,
lineal descendant, sibling, parent, heir, executor, administrator,
testamentary trustee, legatee or beneficiary of any of the foregoing
persons described in this clause (C) (collectively, "DLJMB
Associates"), (D) any trust the beneficiaries of which, or any
corporation, limited liability company or partnership the
stockholders, members or general or limited partners of which, include
only such DLJMB Funds, DLJMB Affiliates, DLJMB Associates, their
spouses or other lineal descendants or (E) any "Syndicate Stockholder"
as defined in that certain Stock Purchase and Stockholders'
5
Agreement by and among the Company, Intermediate Holdings, the DLJMB
Funds and the Syndicate Stockholders who are parties thereto dated on
or about September 3, 2003; and
(ii) in the case of any Management Stockholder, (A) any spouse,
lineal descendant, sibling, parent, heir, executor, administrator,
testamentary trustee, legatee or beneficiary of such Management
Stockholder, or (B) a trust that is for the exclusive benefit of such
Management Stockholder or its Permitted Transferees under clause (A)
above.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Plan" means the Company's 2003 Stock Incentive Plan.
"Pro Rata Share" means, for each Management Stockholder and any
proposed issuance of any class of Company Securities with respect to which each
such Management Stockholder shall be entitled to exercise his or her rights
under Section 4.05, (i) for Common Stock or any security convertible into or
exchangeable for, or options, warrants or other rights to acquire, Common Stock,
the fraction that results from dividing (A) each of such Management
Stockholder's Aggregate Ownership of the class of Company Securities (including
Common Shares issued or issuable upon exercise of options granted under the Plan
to the extent such options are vested) immediately before giving effect to such
issuance, by (B) the total number of such underlying class of Company Securities
then outstanding and owned by the Stockholders (immediately before giving effect
to such issuance), calculated on a Fully-Diluted basis; and (ii) for the
issuance of any other equity or equity-linked security, the fraction that
results from dividing (A) such Management Stockholder's Aggregate Ownership of
the Common Stock by (B) the total number of shares of Common Stock then
outstanding and owned by the Stockholders (immediately before giving effect to
such issuance), calculated on a Fully-Diluted Basis.
"Public Offering" means an underwritten public offering of Company
Securities pursuant to an effective registration statement under the Securities
Act, other than pursuant to a registration statement on Form S-4 or Form S-8 or
any similar or successor form.
"Registrable Securities" means, at any time, any Company Securities
held by any Stockholder until (i) a registration statement covering such Company
Securities has been declared effective by the SEC and such Company Securities
have been disposed of pursuant to such effective registration statement, (ii)
such Company Securities are sold under circumstances in which all of the
applicable conditions of Rule 144 (or any similar provisions then in force)
under the Securities Act are met or (iii) such Company Securities are otherwise
Transferred, the Company has delivered a new certificate or
6
other evidence of ownership for such Company Securities not bearing the legend
required pursuant to this Agreement and such Company Securities may be resold
without subsequent registration under the Securities Act.
"Registration Expenses" means any and all expenses incident to the
performance of or compliance with any registration or marketing of securities,
including all (i) registration and filing fees, and all other fees and expenses
payable in connection with the listing of securities on any securities exchange
or automated interdealer quotation system, (ii) fees and expenses of compliance
with any securities or "blue sky" laws (including reasonable fees and
disbursements of counsel in connection with "blue sky" qualifications of the
securities registered), (iii) expenses in connection with the preparation,
printing, mailing and delivery of any registration statements, prospectuses and
other documents in connection therewith and any amendments or supplements
thereto, (iv) security engraving and printing expenses, (v) internal expenses of
the Company (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), (vi) reasonable
fees and disbursements of counsel for the Company and customary fees and
expenses for independent certified public accountants retained by the Company
(including the expenses relating to any comfort letters or costs associated with
the delivery by independent certified public accountants of any comfort
letters), (vii) reasonable fees and expenses of any special experts retained by
the Company in connection with such registration, (viii) reasonable fees and
out-of-pocket expenses of counsel to the Stockholders participating in the
offering selected (A) by the DLJMB Funds, in the case of any offering in which
any DLJMB Funds participate, or (B) in any other case, by the Stockholders
holding the majority of the Registrable Securities to be sold for the account of
all Stockholders in the offering, (ix) fees and expenses in connection with any
review by the NASD of the underwriting arrangements or other terms of the
offering, and all fees and expenses of any "qualified independent underwriter,"
including the fees and expenses of any counsel thereto, (x) fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding any underwriting fees, discounts and commissions
attributable to the sale of Registrable Securities, (xi) costs of printing and
producing any agreements among underwriters, underwriting agreements, any "blue
sky" or legal investment memoranda and any selling agreements and other
documents in connection with the offering, sale or delivery of the Registrable
Securities, (xii) transfer agents' and registrars' fees and expenses and the
fees and expense of any other agent or trustee appointed in connection with such
offering, (xiii) expenses relating to any analyst or investor presentations or
any "road shows" undertaken in connection with the registration, marketing or
selling of the Registrable Securities and (xiv) fees and expenses payable in
connection with any ratings of the Registrable Securities, including expenses
relating to any presentations to rating agencies.
"Remaining Initial Ownership" means, for any Stockholder or group of
Stockholders at any time, the percentage equal to a fraction, the numerator of
which is the Aggregate Ownership for such Stockholder or group of Stockholders
at such time, and
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the denominator of which is the Initial Ownership for such Stockholder or group
of Stockholders.
"Retained Vested Ownership" means, for any Management Stockholder at
any time, the percentage equal to a fraction, the numerator of which is the
Aggregate Ownership for such Management Stockholder at such time, and the
denominator of which is the sum of (i) the Initial Ownership of such Management
Stockholder and (ii) each and every amount by which the Aggregate Ownership of
such Management Stockholder has increased at any time subsequent to the date of
such Management Stockholder's entry into this Agreement.
"Rule 144" means Rule 144 (or any successor provisions) under the
Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Stockholder" means each Person (other than the Company and
Intermediate Holdings) who, at any relevant determination date, shall be a party
to or bound by: (i) this Agreement (as may be amended from time to time) or (ii)
that certain Stock Purchase and Stockholders' Agreement dated as of September 3,
2003 (as may be amended from time to time) (the "Stock Purchase and Stockholders
Agreement"), among the Company and the stockholders party thereto, so long as
such Person shall "beneficially own" (as such term is defined in Rule 13d-3 of
the Exchange Act) any Company Securities.
"Subsidiary" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.
"Tag-Along Portion" means, for any Tagging Person (as defined in
Section 4.01) in a Tag-Along Sale (as defined in Section 4.01), the Aggregate
Ownership of the relevant class of Company Securities by the Tagging Person
immediately prior to such Tag-Along Sale multiplied by the Tag-Along Pro Rata
Share.
"Tag-Along Pro Rata Share" means a fraction, the numerator of which is
the maximum number of that class of Company Securities proposed to be sold by
the applicable Tag-Along Seller (as defined in Section 4.01) in such Tag-Along
Sale and the denominator of which is the Aggregate Ownership of that class of
Company Securities by the Stockholders at such time.
"Third Party" means a prospective purchaser of Company Securities in a
bona fide arm's-length transaction from a Stockholder, other than a Permitted
Transferee or other Affiliate of such Stockholder.
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"Transfer" means, with respect to any Company Securities, (i) when
used as a verb, to sell, assign, dispose of, exchange, pledge, encumber,
hypothecate or otherwise transfer such Company Securities or any participation
or interest therein, whether directly or indirectly, or agree or commit to do
any of the foregoing and (ii) when used as a noun, a direct or indirect sale,
assignment, disposition, exchange, pledge, encumbrance, hypothecation, or other
transfer of such Company Securities or any participation or interest therein or
any agreement or commitment to do any of the foregoing.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
- --------------------------------- -------
Confidential Information 6.01(b)
Damages 5.05
Demand Registration 5.01(a)
Drag-Along Rights 4.02(a)
Drag-Along Sale 4.02(a)
Drag-Along Sale Notice 4.02(a)
Drag-Along Sale Notice Period 4.02(a)
Drag-Along Sale Price 4.02(a)
Drag-Along Seller 4.02(a)
Drag-Along Transferee 4.02(a)
Excess Portion 4.01(d)
Excess Shares 4.05(c)
Full Participating Stockholder 4.05(c)
Full Participating Tagging Person 4.01(d)
Indemnified Party 5.07
Indemnifying Party 5.07
Inspectors 5.04(g)
Issuance Notice 4.05(a)
Lock-Up Period 5.03
Maximum Offering Size 5.01(e)
Piggyback Registration 5.02(a)
Records 5.04(g)
Put-Call Price 4.04(d)
Put-Call Securities 4.04(d)
Registering Stockholders 5.01(a)
Replacement Nominee 2.03(a)
Requesting Stockholder 5.01(a)
Tag Along Date 4.01(e)
Tag-Along Notice 4.01(a)
Tag-Along Notice Period 4.01(a)
Tag-Along Offer 4.01(a)
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TERM SECTION
- --------------------------------- -------
Tag-Along Response Notice 4.01(a)
Tag-Along Right 4.01(a)
Tag-Along Sale 4.01(a)
Tag-Along Seller 4.01(a)
Tagging Person 4.01(a)
Terminated Stockholder 4.04(a)
Termination Event 4.04(a)
Termination Securities 4.04(a)
Unwinding Event 5.03(b)
(c) Other Definitional and Interpretive Matters. Unless otherwise
expressly provided, for purposes of this Agreement, the following rules of
interpretation shall apply:
Calculation of Time Period. When calculating the period of time before
which, within which or following which any act is to be done or step taken
pursuant to this Agreement, the date that is the reference date in calculating
such period shall be excluded. If the last day of such period is a non-Business
Day, the period in question shall end on the next succeeding Business Day.
Dollars. Any reference in this Agreement to $ shall mean U.S. dollars.
Exhibits/Schedules. The Exhibits and Schedules to this Agreement are
hereby incorporated and made a part hereof and are an integral part of this
Agreement. All Exhibits, Annexes and Schedules annexed hereto or referred to
herein are hereby incorporated in and made a part of this Agreement as if set
forth in full herein. Any capitalized terms used in any Schedule, Annex or
Exhibit but not otherwise defined therein shall be defined as set forth in this
Agreement.
Gender and Number. Any reference in this Agreement to gender shall
include all genders, and words imparting the singular number only shall include
the plural and vice versa.
Headings. The provision of a Table of Contents, the division of this
Agreement into Articles, Sections and other subdivisions and the insertion of
headings are for convenience of reference only and shall not affect or be
utilized in construing or interpreting this Agreement. All references in this
Agreement to any "Section" are to the corresponding Section of this Agreement
unless otherwise specified.
Herein. The words such as "herein," "hereinafter," "hereof," and
"hereunder" refer to this Agreement as a whole and not merely to a subdivision
in which such words appear unless the context otherwise requires.
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ARTICLE 2
CORPORATE GOVERNANCE
SECTION 2.01. Composition of the Board. (a) The Board shall initially
consist of seven (7) directors, all of whom shall be designated by DLJMB;
provided that Buhrmaster will be a director for so long as he is employed by the
Company as its Chief Executive Officer and for two years after the date he
ceases to be the Company's Chief Executive Officer, unless (i) the Company
terminates Buhrmaster's employment for Cause; (ii) Buhrmaster terminates his
employment without Good Reason prior to the third anniversary of the Closing
Date; (iii) Buhrmaster is removed as a director within such two-year period for
Cause; or (iv) Buhrmaster is in breach of the covenants contained in sections
6.01 or 6.02 hereof as determined by the Board in its sole discretion. DLJMB
shall be permitted to increase or decrease the number of directors who serve on
the Board from time to time and DLJMB shall be permitted to designate any such
additional directors.
(b) Each Stockholder agrees that, if at any time it is then entitled
to vote for the election of directors to the Board, it shall vote all of its
Company Securities that are entitled to vote or execute proxies or written
consents, as the case may be, and take all other necessary action (including
causing the Company to call a special meeting of Stockholders) in order to
ensure that the composition of the Board is as set forth in this Section 2.01.
(c) The Company agrees to cause each individual designated pursuant
to Section 2.01(a) or 2.03 to be nominated to serve as a director on the Board,
and to take all other necessary actions (including calling a special meeting of
the Board and/or Stockholders) to ensure that the composition of the Board is as
set forth in this Section 2.01.
SECTION 2.02. Removal. Each Stockholder agrees that, if at any time
it is then entitled to vote for the removal of directors from the Board, it
shall not vote any of its Company Securities in favor of the removal of any
director who shall have been designated by DLJMB pursuant to Section 2.01,
unless DLJMB shall have consented to such removal in writing; provided that if
DLJMB shall request in writing the removal, with or without Cause, of such
director, such Stockholder shall vote all its Company Securities that are
entitled to vote in favor of such removal. Buhrmaster shall not be removed from
the Board in violation of Section 2.01 or while he is still employed by the
Company as Chief Executive Officer.
SECTION 2.03. Vacancies. If, as a result of death, Disability,
retirement, resignation, removal or otherwise, there shall exist or
occur any vacancy on the Board:
(a) DLJMB may designate another individual (the "Replacement
Nominee") to fill such vacancy and serve as a director on the Board; and
11
(b) each Stockholder then entitled to vote for the election of
directors to the Board agrees that it shall vote all of its Company Securities
that are entitled to vote or execute proxies or written consents, as the case
may be, in order to ensure that the Replacement Nominee be elected to the Board.
SECTION 2.04. Charter or Bylaw Provisions. Each Stockholder agrees to
vote all of its Company Securities that are entitled to vote or execute proxies
or written consents, as the case may be, and to take all other actions
necessary, to ensure that the Company's Charter and Bylaws (a) facilitate, and
do not at any time conflict with, any provision of this Agreement and (b) permit
each Stockholder to receive the benefits to which each such Stockholder is
entitled under this Agreement.
ARTICLE 3
RESTRICTIONS ON TRANSFER
SECTION 3.01. General Restrictions on Transfer. (a) Each Stockholder
understands and agrees that the Company Securities held by it on the date hereof
have not been and will not be registered under the Securities Act and are
restricted securities under the Securities Act and the rules and regulations
promulgated thereunder. Each Stockholder agrees that it shall not Transfer any
Company Securities (or solicit any offers in respect of any Transfer of any
Company Securities), except in compliance with the Securities Act, any other
applicable securities or "blue sky" laws and any restrictions on Transfer
contained in this Agreement. Prior to an Initial Public Offering, no Stockholder
shall Transfer any Company Securities to any Person if such Transfer would
result in adverse regulatory consequences to the Company, Intermediate Holdings
or Jostens, as the case may be, including, without limitation, obligations of
the Company, Intermediate Holdings or Jostens, as the case may be, to file
periodic reports with the SEC under the Exchange Act.
(b) Notwithstanding anything in this Agreement to the contrary, no
Stockholder shall Transfer any Company Securities to an Adverse Person without
the prior written consent of the Company; provided, however, that following an
Initial Public Offering, a Stockholder may Transfer Company Securities to an
Adverse Person in an open market transaction so long as such Stockholder
reasonably has no knowledge that a recipient of such Company Securities is an
Adverse Person.
(c) Any attempt to Transfer any Company Securities not in compliance
with this Agreement shall be null and void, and the Company, Intermediate
Holdings or Jostens, as the case may be, shall not, and shall cause any transfer
agent not to, give any effect in the Company's, Intermediate Holdings' or
Jostens', as the case may be, stock records to such attempted Transfer.
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SECTION 3.02. Legends. (a) In addition to any other legend that may
be required, each certificate for Company Securities issued to any Stockholder
shall bear a legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY FOREIGN OR STATE SECURITIES LAWS AND MAY NOT
BE OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS
ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN
THE STOCKHOLDERS' AGREEMENT DATED AS OF JULY 29, 2003, COPIES OF WHICH
MAY BE OBTAINED UPON REQUEST FROM JOSTENS HOLDING CORP. OR ANY
SUCCESSOR THERETO."
(b) If any Company Securities shall cease to be Registrable
Securities under clause (i) of the definition thereof, the Company, upon the
written request of the holder thereof, shall issue to such holder a new
certificate evidencing such Company Securities without the first sentence of the
legend required by Section 3.02(a) endorsed thereon. If any Company Securities
are sold under clause (ii) or clause (iii) of the definition of Registrable
Securities, the Company may request that the holder provide an opinion of legal
counsel reasonably acceptable to the Company stating that such Company
Securities are freely transferable under the Securities Act, and if it requests
and receives such opinion, the Company shall issue to such holder a new
certificate evidencing such Company Securities without the first sentence of the
legend required by Section 3.02(a) endorsed thereon. If any Company Securities
cease to be subject to any and all restrictions on Transfer and all other
obligations set forth in this Agreement, the Company, upon the written request
of the holder thereof, shall issue to such holder a new certificate evidencing
such Company Securities without the second sentence of the legend required by
Section 3.02(a) endorsed thereon.
SECTION 3.03. Permitted Transferees.
(a) Subject to Section 3.01, any Stockholder may at any time Transfer
any or all of its Company Securities to a Permitted Transferee without the
consent of any Person and without compliance with Sections 3.04, 4.01 and 4.02,
as the case may be, so long as (a) such Permitted Transferee shall have agreed
in writing to be bound by the terms of this Agreement in the form of Exhibit A
attached hereto; (b) the Transfer is in compliance with the Securities Act, any
other applicable securities or "blue sky" laws and any other restrictions on
Transfer contained in this Agreement; and (c) the Transfer does not trigger any
registration rights under Section 12(g) of the Securities Act. Such Stockholder
must give written prior notice to the Company of any proposed Transfer to a
Permitted Transferee, including the identity of such proposed Permitted
Transferee and such other information reasonably requested by the Company to
ensure compliance with the terms of this Agreement and the Company shall be
entitled to condition any such Transfer on receipt of an opinion of counsel
reasonably acceptable to the Company that such Transfer is exempt from the
registration requirements of the Securities Act.
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(b) If, while a Permitted Transferee holds any Company Securities a
Permitted Transferee ceases to qualify as a Permitted Transferee in relation to
the initial transferor Stockholder from whom or which such Permitted Transferee
or any previous Permitted Transferee of such initial transferor Stockholder
received such shares or becomes an Adverse Person (an "Unwinding Event"), then
the relevant initial transferor Stockholder:
(i) shall forthwith notify the other Stockholders and the
Company of the pending occurrence of such Unwinding Event; and
(ii) shall take all actions necessary, prior to such Unwinding
Event, to effect a Transfer of all the Company Securities held by the
relevant Permitted Transferee either back to such Stockholder or,
pursuant to this Section 3.03, to another Person which qualifies as a
Permitted Transferee of such initial transferring Stockholder.
SECTION 3.04. Restrictions on Transfers by Management Stockholders.
(a) Subject to Section 3.04(b), no Management Stockholder may Transfer any of
his Company Securities, except to a Permitted Transferee in accordance with
Section 3.03 or as follows (in each case in compliance with the Securities Act,
any other applicable securities or "blue sky" laws, any restrictions contained
in the terms and conditions for such Company Securities, and any agreement or
instrument pursuant to which such Company Securities have been issued):
(i) in a Transfer of Company Securities in a Tag-Along Sale or
Drag-Along Sale pursuant to Section 4.01 or 4.02; or
(ii) in a Transfer of Company Securities after the later of (x)
the one year anniversary date of the Initial Public Offering, and (y)
the date which the Remaining Initial Ownership for the DLJMB Funds
falls below 75%, pursuant to a Public Offering in connection with the
exercise of their respective registration rights under Article 4
hereof, Rule 144, or in a Transfer to any Person that is not an
Adverse Person; provided that a Management Stockholder shall only be
permitted to Transfer the number of Common Shares that would reduce
such Management Stockholder's Retained Vested Ownership (together with
all other Transfers by such Management Holder under this Section
3.04(a)(ii)), by a percentage equal to the difference between (x) 75%,
and (y) the Remaining Initial Ownership of the DLJMB Funds on such
date of Transfer.
(b) The restrictions on Transfers set forth in Section 3.04(a) above
shall terminate at the earlier to occur of (i) the tenth anniversary of the
Closing Date and (ii) the date when the Remaining Initial Ownership for the
DLJMB Funds falls below 15%.
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Section 3.05 Restrictions on Transfers by DLJMB Funds. Prior to the
Initial Public Offering, any DLJMB Fund may at any time Transfer any Company
Securities (i) to a Permitted Transferee in compliance with Section 3.03 or (ii)
to any other Person so long as (A) such Transfer is not to an Adverse Person
without the prior written consent of the Company, (B) the transferee agrees to
be bound by this Agreement and (C) the transferor complies with Section 4.01
hereof to the extent applicable to such Transfer. After the Initial Public
Offering, subject to Section 5.02, there shall be no restrictions on any DLJMB
Fund's ability to Transfer any Company Securities.
ARTICLE 4
TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS; PREEMPTIVE RIGHTS
SECTION 4.01. Tag-Along Rights. (a) Excluding Transfers to Permitted
Transferees in compliance with Section 3.03, the DLJMB Funds shall be permitted
to Transfer in the aggregate Company Securities representing up to 10% of the
Initial Ownership of the DLJMB Funds of each class without being subject to this
Section 4.01 (the "Initial Basket"). Subject to Sections 4.01(g) and 4.03, if
any DLJMB Funds (collectively, the "Tag-Along Seller") propose to Transfer any
class of Company Securities to any Third Party or Third Parties in a single
transaction or in a series of related transactions involving the Transfer by the
DLJMB Funds of Company Securities which exceed the Initial Basket (a "Tag-Along
Sale"),
(i) the Tag-Along Seller shall provide each Other Stockholder
written notice of the terms and conditions of such proposed Transfer
("Tag-Along Notice") and offer each Other Stockholder the opportunity
to participate in such Transfer in accordance with this Section 4.01,
and
(ii) each Other Stockholder may elect, at its option, to
participate in the proposed Transfer in accordance with this Section
4.01 (each such electing Other Stockholder, a "Tagging Person").
The Tag-Along Notice shall identify the number and class of Company
Securities proposed to be sold by the Tag-Along Seller and all other Company
Securities subject to the offer ("Tag-Along Offer"), the consideration for which
the Transfer is proposed to be made, and all other material terms and conditions
of the Tag-Along Offer, including the form of the proposed agreement, if any,
and a firm offer by the proposed Third Party transferee to purchase Company
Securities from the Stockholders in accordance with this Section 4.01.
From the date of its receipt of the Tag-Along Notice, each Tagging
Person shall have the right (a "Tag-Along Right"), exercisable by notice
("Tag-Along Response Notice") given to the Tag-Along Seller within ten (10)
Business Days after its receipt of the Tag-Along Notice (the "Tag-Along Notice
Period"), to request and require that the Tag-Along Seller include in the
proposed Transfer up to the number of Company Securities constituting its
Tag-Along Portion of Company Securities and the Tag-Along Seller shall include
the number of Company Securities proposed to be Transferred by the
15
Tag-Along Seller as set forth in the Tag-Along Notice, reduced by the aggregate
number of Company Securities to be sold by all Tagging Persons. Each Tag-Along
Response Notice shall include wire transfer instructions for payment of the
purchase price for the Company Securities to be sold in such Tag-Along Sale.
Each Tagging Person that exercises its Tag-Along Rights hereunder shall deliver
to the Tag-Along Seller, with its Tag-Along Response Notice, the certificate or
certificates representing the Company Securities of such Tagging Person to be
included in the Tag-Along Sale, together with a limited power-of-attorney
authorizing the Tag-Along Seller to Transfer such Company Securities on the
terms set forth in the Tag-Along Notice. Delivery of the Tag-Along Response
Notice with such certificate or certificates and limited power-of-attorney shall
constitute an irrevocable acceptance of the Tag-Along Offer by such Tagging
Persons.
If, at the end of a 120-day period after the Tag-Along Date (which
120-day period shall be extended if any of the transactions contemplated by the
Tag-Along Offer are subject to regulatory approval until the expiration of five
(5) Business Days after all such approvals have been received, but in no event
later than 180 days following the Tag-Along Date by the Tag-Along Seller), the
Tag-Along Seller has not completed the Transfer of all such Company Securities
on substantially the same terms and conditions set forth in the Tag-Along
Notice, the Tag-Along Seller shall (i) promptly return to each Tagging Person
the limited power-of-attorney (and all copies thereof) together with all
certificates representing the Company Securities that such Tagging Person
delivered for Transfer pursuant to this Section 4.01(a) and any other documents
in the possession of the Tag-Along Seller executed by the Tagging Persons in
connection with the proposed Tag-Along Sale, and (ii) not conduct any Transfer
of Company Securities without again complying with this Section 4.01(a).
(b) Concurrently with the consummation of the Tag-Along Sale, the
Tag-Along Seller shall (i) notify the Tagging Persons thereof, (ii) remit or
cause to be remitted to the Tagging Persons the total consideration to be paid
at the closing of the Tag-Along Sale for the Company Securities of the Tagging
Persons Transferred pursuant thereto, with the cash portion of the purchase
price paid by wire transfer of immediately available funds in accordance with
the wire transfer instructions in the applicable Tag-Along Response Notices and
(iii) promptly after the consummation of such Tag-Along Sale, furnish such other
evidence of the completion and the date of completion of such Transfer and the
terms thereof as may be reasonably requested by the Tagging Persons.
(c) If at the termination of the Tag-Along Notice Period any Other
Stockholder shall not have elected to participate in the Tag-Along Sale, such
Other Stockholder shall be deemed to have waived its rights under Section
4.01(a) with respect to, and only with respect to, the Transfer of its Company
Securities pursuant to such Tag-Along Sale.
(d) If (i) any Other Stockholder declines to exercise its Tag-Along
Rights or (ii) any Tagging Person elects to exercise its Tag-Along Rights with
respect to less than such Tagging Person's Tag-Along Portion (the "Excess
Portion"), the Tag-Along Seller shall notify the Tagging Persons who desire to
sell their Tag-Along Portion
16
(but not less than such amount) (a "Fully Participating Tagging Person") and the
Tag-Along Seller and any Fully Participating Tagging Person shall be entitled to
Transfer, pursuant to the Tag-Along Offer, in addition to any Company Securities
already being Transferred, a number of Company Securities held by it equal to
the product of (i) the Excess Portion and (ii) a fraction, the numerator of
which is the Aggregate Ownership of the class of Company Securities of the
Tag-Along Seller or Fully Participating Tagging Person, as the case may be, and
the denominator of which is equal to the sum of the Aggregate Ownership of the
class of Company Securities of the Tag-Along Seller and all Fully Participating
Tagging Persons.
(e) The Tag-Along Seller shall Transfer, on behalf of itself and any
Tagging Person, the Company Securities subject to the Tag-Along Offer and
elected to be Transferred on the terms and conditions set forth in the Tag-Along
Notice within 120 days (or such longer period as extended under Section 4.01(a))
of the date on which all Tag-Along Rights shall have been waived, exercised or
expired (the "Tag-Along Date").
(f) Notwithstanding anything contained in this Section 4.01, there
shall be no liability on the part of the Tag-Along Seller to the Tagging Persons
(other than the obligation to return any certificates evidencing Company
Securities and limited powers- of-attorney received by the Tag-Along Seller) if
the Transfer of Company Securities pursuant to Section 4.01 is not consummated
for whatever reason. The decision to effect a Transfer of Company Securities
pursuant to this Section 4.01 by the Tag-Along Seller is in the sole and
absolute discretion of the Tag-Along Seller.
(g) The provisions of this Section 4.01 shall not apply to any
Transfer of Company Securities: (i) to any Permitted Transferees of the
Tag-Along Seller, (ii) in a Drag-Along Sale for which the Drag-Along Seller
shall have elected to exercise its rights under Section 4.02 or (iii) in the
Initial Public Offering or at any time thereafter. The provisions of this
Section 4.01 shall terminate upon the consummation of the Initial Public
Offering.
SECTION 4.02. Drag-Along Rights. (a) Subject to Sections 4.02(f) and
4.03, if one or more of the DLJMB Funds (collectively, the "Drag-Along Seller")
propose to Transfer any class of Company Securities to any Third Party or
Parties (the "Drag-Along Transferee") in a single transaction or in a series of
related transactions, and
(i) the Company Securities to be Transferred by the Drag-Along
Seller represent not less than 50% of the Initial Ownership of that
class of Company Securities owned by the DLJMB Funds (in which case
the provisions of Sections 4.02(b)-(e) shall apply), or
(ii) the Company Securities to be Transferred by the Drag-Along
Seller, together with the Company Securities to be Transferred by the
Other Stockholders pursuant to this Section 4.02(a), constitute more
17
than 50% of the Common Shares then outstanding (in which case the
provisions of Sections 4.02(b)-(e) shall apply),
(any such Transfer, a "Drag-Along Sale"), the Drag-Along Seller may at its
option require each Other Stockholder to Transfer the Drag-Along Portion of the
class of Company Securities ("Drag-Along Rights") then held by such Other
Stockholder, and (subject to and at the closing of the Drag-Along Sale) to
exercise such number of options for Common Shares held by such Other Stockholder
as is required in order that a sufficient number of Common Shares are available
to Transfer the relevant Drag-Along Portion of Company Securities held by each
such Other Stockholder, for the same consideration per share or unit of the
relevant class of Company Securities and otherwise on the same terms and
conditions as the Drag-Along Seller; provided that any Other Stockholder that
holds options the exercise price per share of which is greater than the per
share price at which the Common Shares are to be Transferred to the Drag-Along
Transferee, if required by the Drag-Along Seller to exercise such options, may,
in place of such exercise, submit to irrevocable cancellation thereof without
any liability for payment of any exercise price with respect thereto. If the
Drag-Along Sale is not consummated with respect to any Common Shares acquired
upon exercise of such options, or the Drag-Along Sale is not consummated, such
options shall be deemed not to have been exercised or canceled, as applicable.
(b) The Drag-Along Seller shall provide notice of such Drag-Along
Sale to the Other Stockholders (a "Drag-Along Sale Notice") not later than five
(5) Business Days prior to the proposed Drag-Along Sale. The Drag-Along Sale
Notice shall identify the Drag-Along Transferee, the number of Company
Securities subject to the Drag-Along Sale, the consideration for which a
Transfer is proposed to be made (the "Drag-Along Sale Price") and all other
material terms and conditions of the Drag-Along Sale. The number of Company
Securities to be sold by each Other Stockholder shall be the Drag-Along Portion
of the class of Company Securities that such Other Stockholder owns. Each Other
Stockholder shall be required to participate in the Drag-Along Sale on the terms
and conditions set forth in the Drag-Along Sale Notice and to tender the
Drag-Along Portion of its Company Securities as set forth below. The price
payable in such Transfer shall be the Drag-Along Sale Price. Not later than five
(5) Business Days after the date of the Drag-Along Sale Notice (the "Drag-Along
Sale Notice Period"), each of the Other Stockholders shall deliver to a
representative of the Drag-Along Seller designated in the Drag-Along Sale Notice
the certificate and other applicable instruments representing the Company
Securities of such Other Stockholder to be included in the Drag-Along Sale,
together with a limited power-of-attorney authorizing the Drag-Along Seller or
such representative to Transfer such Company Securities on the terms set forth
in the Drag-Along Notice and wire transfer instructions for payment of the cash
portion of the consideration to be received in such Drag-Along Sale, or, if such
delivery is not permitted by applicable law, an unconditional agreement to
deliver such Company Securities pursuant to this Section 4.02(b) at the closing
for such Drag-Along Sale against delivery to such Other Stockholder of the
consideration therefor. If an Other Stockholder should fail to deliver such
certificates to the Drag-Along Seller and the Drag-Along Sale
18
is consummated, the Company shall cause the books and records of the Company to
show that such Company Securities are bound by the provisions of this Section
4.02(b) and that such Company Securities shall be Transferred to the Drag-Along
Transferee immediately upon surrender for Transfer by the holder thereof.
(c) The Drag-Along Seller shall have a period of 120 days from the
date of receipt of the Drag-Along Sale Notice to consummate the Drag-Along Sale
on the terms and conditions set forth in such Drag-Along Sale Notice, provided
that, if such Drag-Along Sale is subject to regulatory approval, such 120-day
period shall be extended until the expiration of five (5) Business Days after
all such approvals have been received, but in no event later than 180 days
following the date of receipt of the Drag-Along Sale Notice. If the Drag-Along
Sale shall not have been consummated during such period, the Drag-Along Seller
shall promptly return to each of the Other Stockholders the limited
power-of-attorney (and all copies thereof) and all certificates and other
applicable instruments representing Company Securities that such Other
Stockholders delivered for Transfer pursuant hereto, together with any other
documents in the possession of the Drag-Along Seller executed by the Other
Stockholders in connection with such proposed Transfer, and all the restrictions
on Transfer contained in this Agreement or otherwise applicable at such time
with respect to such Company Securities owned by the Other Stockholders shall
again be in effect.
(d) Concurrently with the consummation of the Drag-Along Sale, the
Drag-Along Seller shall give notice thereof to the Other Stockholders, shall
remit or cause to be remitted to each of the Other Stockholders that have
surrendered their certificates and other applicable instruments the total
consideration to be paid at the closing of the Drag-Along Sale (the cash portion
of which is to be paid by wire transfer of immediately available funds in
accordance with such Other Stockholder's wire transfer instructions) for the
Company Securities Transferred pursuant hereto and shall furnish such other
evidence of the completion and time of completion of such Transfer and the terms
thereof as may be reasonably requested by such Other Stockholders.
(e) Notwithstanding anything contained in this Section 4.02, there
shall be no liability on the part of the Drag-Along Seller to the Other
Stockholders (other than the obligation to return the limited power-of-attorney
and the certificates and other applicable instruments representing Company
Securities received by the Drag-Along Seller) if the Transfer of Company
Securities pursuant to this Section 4.02 is not consummated for whatever reason,
regardless of whether the Drag-Along Seller has delivered a Drag-Along Sale
Notice. The decision to effect a Transfer of Company Securities pursuant to this
Section 4.02 by the Drag-Along Seller is in the sole and absolute discretion of
the Drag-Along Seller.
(f) The provisions of this Section 4.02 shall not apply to any
Transfer of the Common Shares in a Public Offering. The provisions of this
Section 4.02 shall continue in effect following the consummation of the Initial
Public Offering.
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SECTION 4.03. Additional Conditions to Tag-Along Sales and Drag-Along
Sales. Notwithstanding anything contained in Sections 4.01 or 4.02, in
connection with a Tag-Along Sale under Section 4.01 or a Drag-Along Sale under
Section 4.02:
(a) upon the consummation of such Tag-Along Sale or Drag-Along Sale,
all of the Stockholders participating therein will receive the same form and
amount of consideration per share, or, if any Stockholders are given an option
as to the form and amount of consideration to be received, all Stockholders
participating therein will be given the same option; and
(b) the DLJMB Funds shall ensure that upon the consummation of such
Tag-Along Sale or Drag-Along Sale, all of the Stockholders participating therein
will receive the same form and amount of consideration per share, or, if any
Stockholders are given an option as to the form and amount of consideration to
be received, all Stockholders participating therein will be given the same
option; and
(c) each Other Stockholder shall (i) make such representations,
warranties and covenants and enter into such definitive agreements as are
customary for transactions of the nature of the proposed Transfer, (ii) benefit
from and be subject to all of the same provisions of the definitive agreements
as the Tag-Along Seller or Drag-Along Seller, as the case may be, and (iii) be
required to bear their proportionate share of any escrows, holdbacks or
adjustments in respect of the purchase price or indemnification obligations;
provided that no Other Stockholder shall be obligated (A) to indemnify, other
than severally indemnify, any Person in connection with such Tag-Along Sale or
Drag-Along Sale, as the case may be, (B) to incur liability to any Person in
connection with such Tag-Along Sale or Drag-Along Sale, as the case may be,
including without limitation under any indemnity, in excess of the lesser of (1)
its pro rata share of such liability and (2) the proceeds realized by such Other
Stockholder in such sale, or (C) to agree not to compete with or solicit
employees of any Person; provided that any Management Stockholder who is offered
continued employment with the Company or any of its Subsidiaries after such
Tag-Along Sale or Drag-Along Sale on reasonably similar or better terms may be
required to agree with all the provisions in Sections 6.01 and 6.02 hereof.
SECTION 4.04. Repurchase Rights.
(a) Upon any Management Stockholder ceasing to be employed by, or
engaged as a consultant to, or director of, the Company or its subsidiaries (a
"Terminated Stockholder") for any reason other than by reason of such Management
Stockholder's death or Disability (a "Termination Event"), subject to the
provisions of Section 4.04(b) and (c) hereof, the Company shall have the option
to purchase, and if such option is exercised, such Terminated Stockholder shall
sell, and shall cause any Permitted Transferees of such Terminated Stockholder
to sell, to the Company all or any portion of Company Securities owned by such
Management Stockholder and such Permitted Transferees (the "Termination
Securities") on the date of the occurrence of such
20
Termination Event or acquired pursuant to the exercise of options held by such
Terminated Stockholder on the date of the occurrence of such Termination Event
(the "Termination Date") at a price per Termination Security equal to the
Termination Price (as determined pursuant to Section 4.04(g) below) of the
Termination Securities on the date of the Termination Event; provided that any
portion of Company Securities which are (i) options, warrants or other rights to
acquire Common Stock or any other equity or equity-linked security issued by the
Company and (ii) not vested as of the Termination Date, shall be cancelled as of
such Termination Date.
(b) The Company shall notify a Terminated Stockholder in writing,
within ninety (90) days after the later of (i) the Termination Date or (ii) the
date on which Shares are acquired by such Terminated Stockholder or its
Permitted Transferee pursuant to the exercise of options held by the Terminated
Stockholder on the date of the occurrence of such Termination Event, whether the
Company will exercise its option to purchase the Termination Securities. The
Company shall have the option to assign its right to purchase all or any portion
of the Termination Securities under this Section 4.04 to any of the DLJMB Funds
(provided that, prior to assigning such right to any particular DLJMB Fund, all
such other DLJMB Funds shall first be offered a right to purchase such
securities pro rata in proportion to the number of shares of Company Securities
held by such DLJMB Fund) and any such DLJMB Fund may exercise the Company's
rights under this Section 4.04 in the same manner in which the Company could
exercise such rights.
(c) The closing of the purchase by the Company of Termination
Securities pursuant to Section 4.04(a) shall take place at the principal office
of the Company on the date chosen by the Company, which date shall, except as
may be reasonably necessary to determine the Termination Price, in no event be
more than 90 days after the Company notifies such Terminated Stockholder of the
exercise of its option to purchase the Termination Securities pursuant to
Section 4.04(b). At such closing, the Company shall deliver to the Terminated
Stockholder and such Terminated Stockholder's Permitted Transferees, against
delivery of duly endorsed certificates representing such Termination Securities,
free and clear of all Liens and payment of the Termination Price.
(d) Upon any Management Stockholder's death or Disability, (i) such
Management Stockholder shall have the option to sell and if such option is
exercised the Company shall purchase, and (ii) the Company shall have the option
to purchase and if such option is exercised the Management Stockholder shall
sell, in each case, all or any portion of Company Securities owned by such
Management Stockholder and such Permitted Transferees (the "Put-Call
Securities") on the date of the occurrence of such death or Disability or
acquired pursuant to the exercise of options held by such Management Stockholder
on the date of the occurrence of such death or Disability (the "Put-Call Date")
at a price per Put-Call Security equal to Fair Market Value (the "Put-Call
Price").
(e) The Management Stockholder (or such Management Stockholder's
Permitted Transferees) or the Company, as the case may be, shall notify the
other in
21
writing, within thirty (30) days after the later of (i) the Put-Call Date or
(ii) the date on which Company Securities are acquired by such Management
Stockholder or such Permitted Transferee pursuant to the exercise of options
held by such Management Stockholder on the date of occurrence of such Put-Call
Date whether such Management Stockholder (or such Permitted Transferee) or the
Company, as the case may be, will exercise its option pursuant to Section
4.04(d). The Company shall have the option to assign its right to purchase all
or any portion of the Put-Call Securities under this Section 4.04 to any of the
DLJMB Funds (provided that, prior to assigning such right to any particular
DLJMB Fund, all such other DLJMB Funds shall first be offered a right to
purchase such securities pro rata in proportion to the number of shares of
Company Securities held by such DLJMB Fund) and any such DLJMB Fund may exercise
the Company's rights under this Section 4.04 in the same manner in which the
Company could exercise such rights.
(f) Any notice delivered pursuant to Section 4.04(d) shall set forth
the date chosen by such party, which date shall in no event be less than 30 days
from the date that notice was mailed nor more than 120 days after the occurrence
of the death or Disability (or, with respect to Common Shares acquired pursuant
to the exercise of options held by the Management Stockholder on the date of the
occurrence of such death or Disability, no more than 120 days after the receipt
of such Common Shares). The closing of the purchase by the Company of Put-Call
Securities pursuant to Section 4.04(d) shall take place at the principal office
of the Company. At such closing, the Company shall deliver to such Management
Stockholder or such Management Stockholder's and such Management Stockholder's
Permitted Transferees, against delivery of duly endorsed certificates
representing such Put-Call Securities, free and clear of all Liens and payment
of the purchase price per Put-Call Security as set forth in Section 4.04(g)
below.
(g) For purposes of this Section 4.04, (i) if the employment or other
service arrangement of a Management Stockholder is terminated (A) by the Company
or a Subsidiary thereof for Cause or (B) by the Management Stockholder without
Good Reason, the Termination Price shall be an amount per Termination Security
equal to the lesser of (1) the Fair Market Value, and (2) the original purchase
price paid to the Company for the Termination Securities, and (ii) if the
employment or other service arrangement of a Management Stockholder is
terminated (A) by the Company or a Subsidiary thereof other than for Cause, or
(B) by the Management Stockholder for Good Reason, the Termination Price shall
be an amount per Termination Security equal to the Fair Market Value thereof.
(h) The Company shall pay the Termination Price and Put-Call Price,
as the case may be, in cash; provided, however, that the Termination Price and
Put-Call Price may be paid by the execution and delivery by the Company of a
promissory note, subordinated on terms requested by the Company to any
indebtedness of the Company to any third parties, bearing interest at the prime
rate, per annum, as published in the Wall Street Journal, with principal and
accrued interest and payable in equal installments on each of the first four
anniversaries of the closing date (or at such time as is required in
22
order to address the issue set forth in clauses (ii) or (iii) below) if (i) such
Management Stockholder is in breach of the covenants contained in Sections 6.01
or 6.02 hereof as determined by the Board in its sole discretion; (ii)
restrictive covenants or other provisions contained in the documents evidencing
the Company's indebtedness for borrowed money do not permit the Company to make
such payments in cash (or to the extent partial cash payment is permitted, the
balance to be represented by such a note); or (iii) the cash payment of the
Termination Price or Put-Call Price would adversely affect the Company's
financial condition as determined by the Board, in its sole discretion.
(i) The provisions of this Section 4.04 shall terminate upon the
consummation of the Initial Public Offering, provided, however, that the rights
contained in Section 4.04(e) shall survive the Initial Public Offering for so
long as the Termination Securities are not registered or may not be Transferred,
without restriction, pursuant to Rule 144 of the Securities Act.
SECTION 4.05. Preemptive Rights. (a) The Company shall give each
Management Stockholder written notice (an "Issuance Notice") of any proposed
issuance by the Company, Intermediate Holdings or Jostens, as the case may be,
of any Company Securities to any DLJMB Funds or their successors, as the case
may be, prior to the Initial Public Offering at least ten (10) Business Days
prior to the proposed issuance date. The Issuance Notice shall specify the
number and class of such Company Securities and the price at which such Company
Securities are to be issued to any DLJMB Fund or DLJMB Funds and the other
material terms and conditions of the issuance. Subject to Section 4.05(e) below,
if any DLJMB Funds or DLJMB Funds will purchase any such Company Securities,
each Management Stockholder shall be entitled to purchase such Management
Stockholder's Pro Rata Share of the Company Securities proposed to be issued to
the DLJMB Funds, at the price and on the other terms and conditions specified in
the Issuance Notice.
(b) Each Management Stockholder may exercise his or her rights under
this Section 4.05 by delivering notice of his or her election to purchase such
Company Securities to the Company the DLJMB Funds and to each other within ten
(10) Business Days of receipt of the Issuance Notice. A delivery of such notice
(which notice shall specify the number (or amount) of Company Securities to be
purchased by such Management Stockholder submitting such notice) by such
Management Stockholder shall constitute a binding agreement of such Management
Stockholder to purchase, at the price and on the terms and conditions specified
in the Issuance Notice, the number of shares (or amount) of Company Securities
specified in such Management Stockholder's notice. If, at the termination of
such ten (10) Business Day-period, any Management Stockholder shall not have
exercised his or her rights to purchase any of such Management Stockholder's Pro
Rata Share of such Company Securities, such Management Stockholder shall be
deemed to have waived all of its rights under this Section 4.05 with respect to,
and only with respect to, the purchase of such Company Securities.
(c) If any Management Stockholder to exercise his or her preemptive
rights under this Section 4.05 or elects to exercise such rights with respect to
less than
23
such Management Stockholder's Pro Rata Share (the "Excess Shares"), the DLJMB
Funds and any participating Management Stockholder electing to exercise his or
her rights with respect to his or her full Pro Rata Share (a "Fully
Participating Stockholder") shall be entitled to purchase an additional number
of Company Securities equal to the product of (i) the Excess Shares and (ii) a
fraction, the numerator of which is the Aggregate Ownership of that class of
Company Securities of the DLJMB Funds or the Fully Participating Stockholder, as
the case may be, and the denominator of which is equal to the sum of the
Aggregate Ownership of that class of Company Securities of the DLJMB Funds and
all Fully Participating Stockholders.
(d) The Company, Intermediate Holdings or Jostens, as the case may
be, shall have ninety (90) days from the date of the Issuance Notice to
consummate the proposed issuance of any or all of such Company Securities that
the DLJMB Funds and each Management Stockholder have elected not to purchase at
the price and upon terms and conditions that are not materially less favorable
to the Company, Intermediate Holdings or Jostens, as the case may be, than those
specified in the Issuance Notice, provided that, if such issuance is subject to
regulatory approval, such 90-day period shall be extended until the expiration
of five (5) Business Days after all such approvals have been received, but in no
event later than 120 days from the date of the Issuance Notice. At the
consummation of such issuance, the Company, Intermediate Holdings or Jostens, as
the case may be, shall issue certificates representing the Company Securities to
be purchased by each Management Stockholder exercising preemptive rights
pursuant to this Section 4.05 registered in the name of such Management
Stockholder, against payment by such Management Stockholder of the purchase
price for such Company Securities. If the Company, Intermediate Holdings or
Jostens, as the case may be, proposes to issue any class of Company Securities
after such 90-day period or on other terms materially less favorable to the
issuer, it shall again comply with the procedures set forth in this Section
4.05.
(e) None of the Company, Intermediate Holdings or Jostens, as the
case may be, shall not be under any obligation to consummate any proposed
issuance of Company Securities, nor shall there be any liability on the part of
the Company, Intermediate Holdings or Jostens, as the case may be, to any
Management Stockholder if the Company has not consummated any proposed issuance
of Company Securities pursuant to this Section 4.05 for whatever reason,
regardless of whether it shall have delivered an Issuance Notice in respect of
such proposed issuance.
(f) The provisions of this Section 4.05 shall terminate upon the
consummation of the Initial Public Offering. The Company may offer and sell
Company Securities to the DLJMB Funds subject to the preemptive rights under
this Section 4.05 without first offering such Company Securities to each
Management Stockholder or complying with the procedures of this Section 4.05, so
long as each Management Stockholder receive prompt written notice of such sales
and thereafter are given the opportunity to purchase his or her respective Pro
Rata Shares of such Company Securities within forty-five (45) days after the
close of such sale and in any event no later than ten (10) Business Days from
receipt of the notice referred to herein on substantially the same
24
terms and conditions as such sale to the DLJMB Funds, however, the price of such
Company Securities shall be identical to the price paid by the DLJMB Funds.
ARTICLE 5
REGISTRATION RIGHTS
SECTION 5.01. Demand Registration. (a) If the Company (for purposes
of this Article 5, to the extent Company Securities includes equity securities
of Intermediate Holdings or Jostens, "Company" shall refer to the Company,
Intermediate Holdings or Jostens, as applicable) shall receive a written request
from any DLJMB Funds (such requesting person, the "Requesting Stockholder") that
the Company effect the registration under the Securities Act of all or any
portion of such Requesting Stockholder's Registrable Securities, and specifying
the intended method of disposition thereof, then the Company shall promptly give
notice of such requested registration (each such request shall be referred to
herein as a "Demand Registration") at least fifteen (15) Business Days prior to
the anticipated filing date of the registration statement relating to such
Demand Registration to the other Stockholders and thereupon shall use its best
efforts to effect, as expeditiously as possible, the registration under the
Securities Act of:
(i) all Registrable Securities for which the Requesting
Stockholders have requested registration under this Section 5.01, and
(ii) subject to the restrictions set forth in Sections 5.01(e)
and 5.02, all other Registrable Securities of the same class as those
requested to be registered by the Requesting Stockholders that any
Stockholders with rights to request registration under Section 5.02
(all such Stockholders, together with the Requesting Stockholders, the
"Registering Stockholders") have requested the Company to register by
request received by the Company within ten (10) Business Days after
such Stockholders receive the Company's notice of the Demand
Registration, all to the extent necessary to permit the disposition
(in accordance with the intended methods thereof as aforesaid) of the
Registrable Securities so to be registered; provided that, subject to
Section 5.01(d) hereof, the Company shall not be obligated to effect
(x) more than six Demand Registrations, (y) more than one Demand
Registration during any four-month period, or (z) any Demand
Registration unless the aggregate gross proceeds expected to be
received from the sale of the Registrable Securities requested to be
included by all Registering Stockholders in such Demand Registration
are at least (A) $50 million if such Demand Registration would
constitute the Initial Public Offering, or (B) $25 million in any
Demand Registration other than the Initial Public Offering.
(b) Promptly after the expiration of the ten (10) Business Day period
referred to in Section 5.01(a)(ii) hereof, the Company will notify all
Registering Stockholders of the identities of the other Registering Stockholders
and the number of shares of Registrable Securities requested to be included
therein. At any time prior to the
25
effective date of the registration statement relating to such registration, the
Requesting Stockholders may revoke such request, without liability to any of the
other Registering Stockholders, by providing a notice to the Company revoking
such request.
(c) The Company shall be liable for and pay all Registration
Expenses in connection with each Demand Registration, regardless of whether such
Registration is effected.
(d) A Demand Registration shall not be deemed to have occurred:
(i) unless the registration statement relating thereto (A) has
become effective under the Securities Act and (B) has remained
effective for a period of at least 120 days (or such shorter period in
which all Registrable Securities of the Registering Stockholders
included in such registration have actually been sold thereunder),
provided that such registration statement shall not be considered a
Demand Registration if, after such registration statement becomes
effective, (1) such registration statement is interfered with by any
stop order, injunction or other order or requirement of the SEC or
other governmental agency or court and (2) less than 75% of the
Registrable Securities included in such registration statement have
been sold thereunder; or
(ii) if the Maximum Offering Size (as defined below) is reduced
in accordance with Section 5.01(e) such that less than 50% of the
Registrable Securities of the Requesting Stockholders sought to be
included in such registration are included.
(e) If a Demand Registration involves a Public Offering and the
managing underwriter advises the Company and the Requesting Stockholders that,
in its view, the number of Company Securities that the Registering Stockholders
and the Company propose to include in such registration exceeds the largest
number of shares that can be sold without having an adverse effect on such
offering, including the price at which such shares can be sold (the "Maximum
Offering Size"), the Company shall include in such registration, in the priority
listed below, up to the Maximum Offering Size:
(i) first, all Registrable Securities requested to be
registered by the Requesting Stockholders (allocated, if necessary for
the offering not to exceed the Maximum Offering Size, pro rata among
such entities on the basis of the relative number of Registrable
Securities so requested to be included in such registration by each),
(ii) second, all Registrable Securities proposed to be
registered by the Company, and
26
(iii) third, all Registrable Securities requested to be included
in such registration by any other Registering Stockholders (allocated,
if necessary for the offering not to exceed the Maximum Offering Size,
pro rata among such other Registering Stockholders on the basis of the
relative number of Registrable Securities so requested to be included
in such registration by each).
SECTION 5.02. Piggyback Registration. (a) If the Company proposes to
register any Company Securities under the Securities Act (whether for itself or
in connection with a sale of securities by a Third Party, but other than a
registration on Form S-8 or S-4, or any successor or similar forms, relating to
Common Shares issuable upon exercise of employee stock options or in connection
with any employee benefit or similar plan of the Company or in connection with a
direct or indirect acquisition by the Company of another Person) and in such
registration shares of Registrable Securities owned by the DLJMB Funds will be
offered for sale, the Company shall each such time give prompt written notice at
least ten (10) Business Days prior to the anticipated filing date of the
registration statement relating to such registration to each Stockholder with
rights to require registration of Company Securities hereunder, which notice
shall set forth such Stockholder's rights under this Section 5.02 and shall
offer such Stockholder the opportunity to include in such registration statement
up to a number of the same class or series of Registrable Securities as proposed
to be offered in such registration equal to its total amount of such Registrable
Securities multiplied by a fraction, the numerator of which is the number of
such Registrable Securities proposed to be sold by the DLJMB Funds (for its own
account) in such offering and the denominator of which is the aggregate number
of such Registrable Securities of such class or series held by the DLJMB Funds
at such time (a "Piggyback Registration"), subject to the restrictions set forth
herein. Upon the request of any such Stockholder made within five (5) Business
Days after the receipt of notice from the Company (which request shall specify
the number of Registrable Securities intended to be registered by such
Stockholder), the Company shall use its best efforts to effect the registration
under the Securities Act of all Registrable Securities that the Company has been
so requested to register by all such Stockholders with rights to require
registration of Company Securities hereunder, to the extent requisite to permit
the disposition of the Registrable Securities so to be registered, provided that
(i) if such registration involves a Public Offering, all such Stockholders
requesting to be included in the Company's registration must sell their
Registrable Securities to the underwriters selected as provided in Section
5.04(f)(i) on the same terms and conditions as apply to the Company or any other
selling stockholders, and (ii) if, at any time after giving notice of its
intention to register any Company Securities pursuant to this Section 5.02(a)
and prior to the effective date of the registration statement filed in
connection with such registration, the Company shall determine for any reason
not to register such securities, the Company shall give notice to all such
Stockholders and, thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration. No registration
effected under this Section 5.02 shall relieve the Company of its obligations to
effect a Demand Registration to the extent
27
required by Section 5.01. The Company shall be liable for and pay all
Registration Expenses in connection with each Piggyback Registration.
(b) If a Piggyback Registration involves a Public Offering (other
than any Demand Registration, in which case the provisions with respect to
priority of inclusion in such offering set forth in Section 5.01(e) shall apply)
and the managing underwriter advises the Company that, in its view, the number
of Company Securities that the Company a and such selling stockholders propose
to include in such registration exceeds the largest number of shares that can be
sold without having an adverse effect on such offering, including the price at
which such shares can be sold (the "Maximum Offering Size"), the Company shall
include in such registration, in the following priority, up to the Maximum
Offering Size:
(i) first, such number of Company Securities proposed to be
registered for the account of the Company, if any, as would not cause
the offering to exceed the Maximum Offering Size, and
(ii) second, all Registrable Securities requested to be
included in such registration by any Stockholders pursuant to Section
5.02 and similar registration rights provided to Stockholders by the
Company (allocated, if necessary for the offering not to exceed the
Maximum Offering Size, pro rata among such Stockholders based on their
relative ownership of Company Securities).
(c) No Management Stockholder shall be permitted to exercise its
rights to require registration of any Company Securities in the Initial Public
Offering. No Management Stockholder shall have any rights to require
registration of any Company Securities except to the extent such Stockholder
shall be permitted to Transfer such Company Securities pursuant to Section 3.03
or 3.04.
SECTION 5.03. Lock-Up Agreements. If any registration of Company
Securities shall be effected in connection with a Public Offering, neither the
Company nor any Stockholder shall effect any public sale or distribution,
including any sale pursuant to Rule 144, of any Company Securities or other
security of the Company (except as part of such Public Offering) during the
period (each such period, a "Lock-Up Period") beginning fourteen (14) days prior
to the distribution of a preliminary prospectus until the earlier of (i) such
time as the Company and the lead managing underwriter shall agree and (ii) 180
days after such effective date.
SECTION 5.04. Registration Procedures. Whenever any Stockholders
request that any Registrable Securities be registered pursuant to Section 5.01
or 5.02 hereof, subject to the provisions of such Sections, the Company shall
use its best efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof as
quickly as practicable, and, in connection with any such request:
28
(a) The Company shall as expeditiously as possible prepare and file
with the SEC a registration statement on any form for which the Company then
qualifies or that counsel for the Company shall deem appropriate and which form
shall be available for the sale of the Registrable Securities to be registered
thereunder in accordance with the intended method of distribution thereof, and
use its best efforts to cause such filed registration statement to become and
remain effective for a period of not less than 180 days, or in the case of a
shelf registration statement, one (1) year (or such shorter period in which all
of the Registrable Securities of the Registering Stockholders included in such
registration statement shall have actually been sold thereunder).
(b) Prior to filing a registration statement or prospectus or any
amendment or supplement thereto, the Company shall, if requested, furnish to
each participating Stockholder and each underwriter, if any, of the Registrable
Securities covered by such registration statement copies of such registration
statement as proposed to be filed, and thereafter the Company shall furnish to
such Stockholder and underwriter, if any, such number of copies of such
registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference therein),
the prospectus included in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 or Rule 430A under the Securities Act and such other
documents as such Stockholder or underwriter may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such
Stockholder.
(c) After the filing of the registration statement, the Company shall
(i) cause the related prospectus to be supplemented by any required prospectus
supplement, and, as so supplemented, to be filed pursuant to Rule 424 under the
Securities Act, (ii) comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by such
registration statement during the applicable period in accordance with the
intended methods of disposition by the Registering Stockholders thereof set
forth in such registration statement or supplement to such prospectus and (iii)
promptly notify each Registering Stockholder holding Registrable Securities
covered by such registration statement of any stop order issued or threatened by
the SEC or any state securities commission and take all reasonable actions
required to prevent the entry of such stop order or to remove it if entered.
(d) The Company shall use its best efforts to (i) register or qualify
the Registrable Securities covered by such registration statement under such
other securities or "blue sky" laws of such jurisdictions in the United States
as any Registering Stockholder holding such Registrable Securities reasonably
(in light of such Stockholder's intended plan of distribution) requests and (ii)
cause such Registrable Securities to be registered with or approved by such
other governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and things
that may be reasonably necessary or advisable to enable such Stockholder to
consummate the disposition of the Registrable Securities owned by such
Stockholder; provided that the Company shall not be required to (A) qualify
generally to do business in any jurisdiction where it would not otherwise be
29
required to qualify but for this Section 5.04(d), (B) subject itself to taxation
in any such jurisdiction or (C) consent to general service of process in any
such jurisdiction.
(e) The Company shall immediately notify each Registering Stockholder
holding such Registrable Securities covered by such registration statement, at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act, of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading and promptly prepare and make available to each such Stockholder and
file with the SEC any such supplement or amendment.
(f) (i) The DLJMB Funds shall have the right, in their sole
discretion, to select the underwriter or underwriters in connection with any
Public Offering resulting from a Demand Registration, which underwriter or
underwriters may include any Affiliate of any DLJMB Fund, and (ii) the Company
shall select an underwriter or underwriters in connection with any other Public
Offering. In connection with any Public Offering, the Company shall enter into
customary agreements (including an underwriting agreement in customary form) and
take such all other actions as are reasonably required in order to expedite or
facilitate the disposition of such Registrable Securities in any such Public
Offering, including the engagement of a "qualified independent underwriter" in
connection with the qualification of the underwriting arrangements with the
NASD.
(g) Upon execution of confidentiality agreements in form and
substance reasonably satisfactory to the Company, the Company shall make
available for inspection by any Registering Stockholder and any underwriter
participating in any disposition pursuant to a registration statement being
filed by the Company pursuant to this Section 5.04 and any attorney, accountant
or other professional retained by any such Stockholder or underwriter
(collectively, the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the "Records")
as shall be reasonably necessary or desirable to enable them to exercise their
due diligence responsibility, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any Inspectors in
connection with such registration statement. Records that the Company
determines, in good faith, to be confidential and that it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (i)
the disclosure of such Records is necessary to avoid or correct a misstatement
or omission in such registration statement or (ii) the release of such Records
is ordered pursuant to a subpoena or other order from a court of competent
jurisdiction. Each Registering Stockholder agrees that information obtained by
it as a result of such inspections shall be deemed confidential and shall not be
used by it or its Affiliates as the basis for any market transactions in the
Company Securities unless and until such information is made generally available
to the public. Each Registering Stockholder further agrees that, upon learning
that disclosure of such Records is sought in a court of competent jurisdiction,
it shall give notice to the Company and allow the Company, at its
30
expense, to undertake appropriate action to prevent disclosure of the Records
deemed confidential.
(h) The Company shall furnish to each Registering Stockholder and to
each such underwriter, if any, a signed counterpart, addressed to such
Stockholder or underwriter, of (i) an opinion or opinions of counsel to the
Company and (ii) a comfort letter or comfort letters from the Company's
independent public accountants, each in customary form and covering such matters
of the kind customarily covered by opinions or comfort letters, as the case may
be, as a majority of such Stockholders or the managing underwriter therefor
reasonably requests.
(i) The Company shall otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable, an earning statement or
such other document that shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder.
(j) The Company may require each such Registering Stockholder
promptly to furnish in writing to the Company such information regarding the
distribution of the Registrable Securities as the Company may from time to time
request and such other information as may be legally required in connection with
such registration.
(k) Each such Registering Stockholder agrees that, upon receipt of
any written notice from the Company of the occurrence of any event requiring the
preparation of a supplement or amendment of a prospectus relating to the
Registrable Securities covered by a registration statement that is required to
be delivered under the Securities Act so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or to make the statements therein not misleading, such
Stockholder shall forthwith discontinue disposition of Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until such Stockholder's receipt of the copies of a supplemented or amended
prospectus, and, if so directed by the Company, such Stockholder shall deliver
to the Company all copies, other than any permanent file copies then in such
Stockholder's possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice. If the Company
shall give such notice, the Company shall extend the period during which such
registration statement shall be maintained effective (including the period
referred to in Section 5.04(a) hereof) by the number of days during the period
from and including the date of the giving of notice pursuant to Section 5.04(e)
hereof to the date when the Company shall make available to such Stockholder a
prospectus supplemented or amended to conform with the requirements of Section
5.04(e) hereof.
(l) The Company shall use its reasonable efforts to list all
Registrable Securities covered by such registration statement on any securities
exchange or quotation system on which any of the Registrable Securities are then
listed or traded.
31
(m) The Company shall have appropriate officers of the Company (i)
prepare and make presentations at any "road shows" and before analysts and
rating agencies, as the case may be, (ii) take other actions to obtain ratings
for any Registrable Securities and (iii) otherwise use their reasonable efforts
to cooperate as requested by the underwriters in the offering, marketing or
selling of the Registrable Securities.
SECTION 5.05. Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Registering Stockholder holding Registrable
Securities covered by a registration statement, its officers, directors,
employees, managers, members, partners and agents, and each Person, if any, who
controls any such Persons within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable expenses of
investigation and reasonable attorneys' fees and expenses) ("Damages") caused by
or relating to any untrue statement or alleged untrue statement of a material
fact contained in any registration statement or prospectus relating to the
Registrable Securities (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or caused by or relating to any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such Damages are caused by or related
to any such untrue statement or omission or alleged untrue statement or omission
so made based upon information furnished in writing to the Company by such
Stockholder or on such Stockholder's behalf expressly for use therein, provided
that, with respect to any untrue statement or omission or alleged untrue
statement or omission made in any preliminary prospectus, or in any prospectus,
as the case may be, the indemnity agreement contained in this paragraph shall
not apply to the extent that any Damages result from the fact that a current
copy of the prospectus (or such amended or supplemented prospectus, as the case
may be) was not sent or given to the Person asserting any such Damages at or
prior to the written confirmation of the sale of the Registrable Securities
concerned to such Person if it is determined that the Company has provided such
prospectus to such Stockholder and it was the responsibility of such Stockholder
to provide such Person with a current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) and such current copy of the
prospectus (or such amended or supplemented prospectus, as the case may be)
would have cured the defect giving rise to such Damages. The Company also agrees
to indemnify any underwriters of the Registrable Securities, their officers and
directors and each Person who controls such underwriters within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act on
substantially the same basis as that of the indemnification of the Stockholders
provided in this Section 5.05.
SECTION 5.06. Indemnification by the Participating Stockholders. Each
Registering Stockholder holding Registrable Securities included in any
registration statement agrees, severally but not jointly, to indemnify and hold
harmless the Company, its officers, directors and agents and each Person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such
32
Stockholder, but only (i) with respect to information furnished in writing to
the Company by such Stockholder or on such Stockholder's behalf expressly for
use in any registration statement or prospectus relating to the Registrable
Securities, or any amendment or supplement thereto, or any preliminary
prospectus or (ii) to the extent that any Damages result from the fact that a
current copy of the prospectus (or such amended or supplemented prospectus, as
the case may be) was not sent or given to the Person asserting any such Damages
at or prior to the written confirmation of the sale of the Registrable
Securities concerned to such Person if it is determined that it was the
responsibility of such Stockholder to provide such Person with a current copy of
the prospectus (or such amended or supplemented prospectus, as the case may be)
and such current copy of the prospectus (or such amended or supplemented
prospectus, as the case may be) was available to such Stockholder and would have
cured the defect giving rise to such Damages. Each such Stockholder also agrees
to indemnify and hold harmless underwriters of the Registrable Securities, their
officers and directors and each Person who controls such underwriters within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act on substantially the same basis as that of the indemnification of the
Company provided in this Section 5.06. As a condition to including Registrable
Securities in any registration statement filed in accordance with Article 5
hereof, the Company may require that it shall have received an undertaking
reasonably satisfactory to it from any underwriter to indemnify and hold it
harmless to the extent customarily provided by underwriters with respect to
similar securities. No Registering Stockholder shall be liable under this
Section 5.06 for any Damages in excess of the net proceeds realized by such
Stockholder in the sale of Registrable Securities of such Stockholder to which
such Damages relate.
SECTION 5.07. Conduct of Indemnification Proceedings. If any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
this Article 5, such Person (an "Indemnified Party") shall promptly notify the
Person against whom such indemnity may be sought (the "Indemnifying Party") in
writing and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Party, and
shall assume the payment of all fees and expenses, provided that the failure of
any Indemnified Party so to notify the Indemnifying Party shall not relieve the
Indemnifying Party of its obligations hereunder except to the extent that the
Indemnifying Party is materially prejudiced by such failure to notify. In any
such proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) in the
reasonable judgment of such Indemnified Party representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that, in connection with any proceeding
or related proceedings in the same jurisdiction, the Indemnifying Party shall
not be liable for the reasonable fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) at any time for all such
Indemnified Parties, and that all such fees and expenses shall be reimbursed as
they
33
are incurred. In the case of any such separate firm for the Indemnified Parties,
such firm shall be designated in writing by the Indemnified Parties. The
Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent, or if
there be a final judgment for the plaintiff, the Indemnifying Party shall
indemnify and hold harmless such Indemnified Parties from and against any
Damages (to the extent stated above) by reason of such settlement or judgment.
Without the prior written consent of the Indemnified Party, no Indemnifying
Party shall effect any settlement of any pending or threatened proceeding in
respect of which any Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability arising out of such proceeding.
SECTION 5.08. Contribution. If the indemnification provided for in
this Article 5 is unavailable to the Indemnified Parties in respect of any
Damages, then each such Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Damages (i) as between the Company and the
Registering Stockholders holding Registrable Securities covered by a
registration statement on the one hand and the underwriters on the other, in
such proportion as is appropriate to reflect the relative benefits received by
the Company and such Stockholders on the one hand and the underwriters on the
other, from the offering of the Registrable Securities, or if such allocation is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits but also the relative fault of the Company and
such Stockholders on the one hand and of such underwriters on the other in
connection with the statements or omissions that resulted in such Damages, as
well as any other relevant equitable considerations and (ii) as between the
Company on the one hand and each such Stockholder on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and of
each such Stockholder in connection with such statements or omissions, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and such Stockholders on the one hand and such underwriters on
the other shall be deemed to be in the same proportion as the total proceeds
from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company and such Stockholders bear to the
total underwriting discounts and commissions received by such underwriters, in
each case as set forth in the table on the cover page of the prospectus. The
relative fault of the Company and such Stockholders on the one hand and of such
underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and such Stockholders or by such underwriters. The
relative fault of the Company on the one hand and of each such Stockholder on
the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such party,
and the parties' relative intent,
34
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Registering Stockholders agree that it would not
be just and equitable if contribution pursuant to this Section 5.08 were
determined by pro rata allocation (even if the underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of the
Damages referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 5.08, no underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Registrable
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any Damages that such underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission, and no Registering Stockholder shall be required
to contribute any amount in excess of the amount by which the net proceeds
realized by such Stockholder in the sale of Registrable Securities of such
Stockholder to which such Damages relate exceeds the amount of any Damages that
such Stockholder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. Each Registering Stockholder's
obligation to contribute pursuant to this Section 5.08 is several in the
proportion that the proceeds of the offering received by such Stockholder bears
to the total proceeds of the offering received by all such Registering
Stockholders and not joint.
SECTION 5.09. Participation in Public Offering. No Stockholder will be
permitted to require registration of any Registrable Securities in any Public
Offering hereunder unless such Stockholder (a) agrees to sell such Registrable
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements and the provisions of this Agreement in respect of
registration rights.
SECTION 5.10. Other Indemnification. Indemnification similar to that
specified herein (with appropriate modifications) shall be given by the Company
and each Stockholder participating therein with respect to any required
registration or other qualification of securities under any federal or state law
or regulation or governmental authority other than the Securities Act.
SECTION 5.11. Cooperation by the Company. If any Stockholder shall
transfer any Registrable Securities pursuant to Rule 144, the Company shall
35
cooperate, to the extent commercially reasonable, with such Stockholder and
shall provide to such Stockholder such information as such Stockholder shall
reasonably request.
SECTION 5.12. No Transfer of Registration Rights. None of the rights
of Stockholders under this Article 5 shall be assignable by any Stockholder to
any Person acquiring Securities in any Public Offering or pursuant to Rule 144
but are assignable to other Persons to whom Company Securities are Transferred
in compliance with this Agreement.
SECTION 5.13. S-8 Registration Following IPO. The Company shall file a
registration statement on Form S-8 in accordance with applicable securities laws
within 180 days after the Initial Public Offering, which registration statement
will cover the Common Shares issuable upon exercise of employee options then
outstanding.
ARTICLE 6
CERTAIN COVENANTS AND AGREEMENTS
SECTION 6.01. Confidentiality. (a) Each Management Stockholder agrees
that Confidential Information (as defined below) furnished and to be furnished
to him or her was and shall be made available in connection with such Management
Stockholder's investment in the Company. Such Management Stockholder
acknowledges that the Confidential Information which such Management Stockholder
has obtained or will obtain is the property of the Company and its Subsidiaries.
Each Management Stockholder agrees that he or she will not disclose any
Confidential Information to any other Person, except that Confidential
Information may be disclosed: (i) to the extent required by applicable law, rule
or regulation (including complying with any oral or written questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process to which a Management Stockholder is
subject); provided that such Management Stockholder gives the Company prompt
notice of such requests, to the extent practicable, so that the Company may seek
an appropriate protective order or similar relief (and the Management
Stockholder shall cooperate with such efforts by the Company, and shall in any
event make only the minimum disclosure required by such law, rule or regulation)
or (ii) if the prior written consent of the Board shall have been obtained.
(b) "Confidential Information" shall mean any information relating to
the business or affairs of the Company or any of its Affiliates, including, but
not limited to, information relating to financial statements, customer
identities, potential customers, employees, sales representatives, suppliers,
servicing methods, equipment programs, strategies and information, analyses,
profit margins or other proprietary information used by the Company or any of
its Affiliates; provided, however, that Confidential Information does not
include any information which is in the public domain or becomes known in the
industry through no wrongful act on your part; provided that Confidential
Information shall not include information that (i) is or becomes generally known
to the public other than as a result of a disclosure by you in violation of this
Agreement, (ii) is or was
36
available to you on a non-confidential basis prior to its disclosure to you, or
(iii) was or becomes available to you on a non-confidential basis from a source
other than the Company, which source is or was (at the time of receipt of the
relevant information) not, to your best knowledge, bound by a confidentiality
agreement with the Company or another person.
SECTION 6.02. Restrictive Covenants.
(a) During the term of employment or consultancy and for a period of
two (2) years after the termination thereof, each Management Stockholder shall
not, directly or indirectly, alone or as a partner, officer, director,
shareholder, sole proprietor, employee or consultant of any other firm or entity
(A) engage or intend to engage in any commercial activity in competition with
any part of the business of the Company or any of its Affiliates as conducted at
the time in question, or (B) (i) cause, solicit, induce or encourage any
employees, independent sales representatives, Company sales representatives,
consultants or contractors of the Company or its Subsidiaries or Affiliates to
leave such employment or service or hire, employ or otherwise engage any such
individual; or (ii) cause, induce or encourage any actual or prospective client,
customer, supplier, or licensor of the Company or its Subsidiaries or
Affiliates, or any other Person who has a material business relationship with
the Company or its Subsidiaries or Affiliates, to terminate or modify any such
actual or prospective relationship.
(b) The parties hereto agree that, if any court of competent
jurisdiction in a final nonappealable judgment determines that a specified time
period, a specified geographical area, a specified business limitation or any
other relevant feature of this Section 6.02 is unreasonable, arbitrary or
against public policy, then a lesser time period, geographical area, business
limitation or other relevant feature which is determined to be reasonable, not
arbitrary and not against public policy may be enforced against the applicable
party.
SECTION 6.03. Conflicting Agreements. Each Stockholder represents and
agrees that it shall not (a) grant any proxy or enter into or agree to be bound
by any voting trust or agreement with respect to the Company Securities, except
as expressly contemplated by this Agreement, (b) enter into any agreement or
arrangement of any kind with any Person with respect to its Company Securities
inconsistent with the provisions of this Agreement or for the purpose or with
the effect of denying or reducing the rights of any other Stockholder under this
Agreement, including agreements or arrangements with respect to the Transfer or
voting of its Company Securities or (c) act, for any reason, as a member of a
group or in concert with any other Person in connection with the Transfer or
voting of its Company Securities in any manner that is inconsistent with the
provisions of this Agreement.
37
ARTICLE 7
MISCELLANEOUS
SECTION 7.01. Stockholders Representative. For purposes of this
Agreement, the DLJMB Funds hereby consent to the appointment of DLJMB, as
representative (the "Stockholders Representative") of the DLJMB Funds, and as
attorney-in-fact for and on behalf of the DLJMB Funds, and, subject to the
express limitations set forth below, the taking by the Stockholders
Representative of any and all actions and the making of any decisions required
or permitted to be taken by the DLJMB Funds under this Agreement. The
Stockholders Representative will have unlimited authority and power to act on
behalf of the DLJMB Funds with respect to this Agreement and the disposition,
settlement or other handling of all claims, rights or obligations arising under
this Agreement so long as all DLJMB Funds are treated in the same manner. The
DLJMB Funds will be bound by all actions taken by the Stockholders
Representative in connection with this Agreement. In performing its functions
hereunder, the Stockholders Representative will not be liable to the DLJMB Funds
in the absence of gross negligence or willful misconduct.
SECTION 7.02. Binding Effect; Assignability; Benefit. (a) This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, successors, legal representatives and permitted
assigns. Any Stockholder that ceases to own beneficially any Company Securities
shall cease to be bound by the terms hereof (other than (i) the provisions of
Sections 5.05, 5.06, 5.07, 5.08 and 5.10 applicable to such Stockholder with
respect to any offering of Registrable Securities completed before the date such
Stockholder ceased to own any Company Securities, (ii) Sections 6.01 and 6.02
and (iii) Article 7).
(b) Neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof shall be assignable by any party
hereto pursuant to any Transfer of Company Securities or otherwise, except that
any Person acquiring Company Securities that is required or permitted by the
terms of this Agreement to become a party hereto shall (unless already bound
hereby) execute and deliver to the Company an agreement to be bound by this
Agreement in the form of Exhibit A hereto and shall thenceforth be a
"Stockholder".
(c) Nothing in this Agreement, expressed or implied, is intended to
confer on any Person other than the parties hereto, and their respective heirs,
successors, legal representatives and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
SECTION 7.03. Notices. All notices, requests and other communications
to any party shall be in writing and shall be delivered in person, mailed by
certified or registered mail, return receipt requested, or sent by facsimile
transmission,
38
If to the Company, to:
Jostens Holding Corp.
c/o Jostens, Inc.
5501 Norman Center Drive
Minneapolis, MN 55437
Attention: Paula Johnson
Facsimile: (952) 830-8492
If to the DLJMB Funds, to:
c/o DLJ Merchant Banking III, Inc.
Eleven Madison Avenue
New York, NY 10010
Attention: David Wittels
Facsimile: (212) 538-0415
In each case with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Douglas P. Warner, Esq.
Facsimile: (212) 310-8007
if to any Management Stockholder, to such Management Stockholder at
the Company's address listed above,
or, in each case, at such other address or fax number as such party may
hereafter specify for the purpose of notices hereunder by written notice to the
other parties hereto. All notices, requests and other communications shall be
deemed received on the date of receipt by the recipient thereof if received
prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the
place of receipt. Otherwise, any such notice, request or communication shall be
deemed not to have been received until the next succeeding Business Day in the
place of receipt. Any notice, request or other written communication sent by
facsimile transmission shall be confirmed by certified or registered mail,
return receipt requested, posted within one (1) Business Day, or by personal
delivery, whether courier or otherwise, made within two (2) Business Days after
the date of such facsimile transmissions.
Any Person that hereafter becomes a Stockholder shall provide its
address and fax number to the Company, which shall promptly provide such
information to each other Stockholder.
SECTION 7.04. Waiver; Amendment; Termination. (a) No provision of this
Agreement may be waived except by an instrument in writing executed
39
by the party against whom the waiver is to be effective. No provision of this
Agreement may be amended or otherwise modified except by an instrument in
writing executed by (1) the Company; (2) DLJMB and if any such amendment will
not disproportionately and adversely affect the Management Stockholders
differently than the DLJMB Funds, the consent of Management Stockholders holding
at least 51% of the outstanding Common Shares held by the Management
Stockholders at the time of such proposed amendment or modification will be
required.
(b) This Agreement shall terminate on the tenth anniversary of the
Closing Date unless earlier terminated; provided that such term may be extended
by the Company with the consent of the DLJMB Funds and the holders of at least
51% of the outstanding Common Shares held by the Management Stockholders at the
time of such extension.
(c) Notwithstanding the foregoing, any member of management of the
Company or any of its Subsidiaries acquiring Company Securities may become a
party to this Agreement as a "Management Stockholder" and "Stockholder" upon
execution and delivery to the Company of the form of Subscription and Joinder
Agreement attached hereto as Exhibit B by such Person and the Company, at which
time Schedule A shall be amended to reflect the addition of such Management
Stockholder.
SECTION 7.05. Fees and Expenses. Each party shall pay its own costs
and expenses incurred in connection with the preparation and execution of this
Agreement, or any amendment or waiver hereof, and the transactions contemplated
hereby and all matters related hereto. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof or
thereof is validly asserted as a defense, the successful party shall be entitled
to recover reasonable attorneys' fees in addition to any other available remedy.
SECTION 7.06. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without regard
to the conflicts of laws rules of such state.
SECTION 7.07. Jurisdiction. The parties hereby agree that any suit,
action or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought in the United States District Court for the
Southern District of New York or any New York State court sitting in New York
City, so long as one of such courts shall have subject matter jurisdiction over
such suit, action or proceeding, and that any case of action arising out of this
Agreement shall be deemed to have arisen from a transaction of business in the
State of New York, and each of the parties hereby irrevocably consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has
been brought in an inconvenient form.
40
Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 7.03 shall be deemed effective service of
process on such party.
SECTION 7.08. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 7.09. Specific Enforcement; Cumulative Remedies. The parties
hereto acknowledge that money damages may not be an adequate remedy for
violations of this Agreement and that any party, in addition to any other rights
and remedies which the parties may have hereunder or at law or in equity, may,
in his or its sole discretion, apply to a court of competent jurisdiction for
specific performance or injunction or such other relief as such court may deem
just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection to the imposition of such relief. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise or beginning
of the exercise of any thereof by any party shall not preclude the simultaneous
or later exercise of any other such rights, powers or remedies by such party.
SECTION 7.10. Entire Agreement. This Agreement and any exhibits and
other documents referred to herein constitute the entire agreement and
understanding among the parties hereto in respect of the subject matter hereof
and thereof and supersede all prior and contemporaneous agreements and
understandings, both oral and written, among the parties hereto, or between any
of them, with respect to the subject matter hereof and thereof.
SECTION 7.11. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
SECTION 7.12. Pronouns. Any masculine personal pronoun shall be
considered to mean the corresponding feminine or neuter personal pronoun, and
vice versa, as the context requires.
SECTION 7.13. Spouses. This Agreement must be executed by the spouse
of each Stockholder who is a resident of a community property state (which, at
the date hereof, are Arizona, California, Idaho, Louisiana, Nevada, New Mexico,
Puerto Rico, Texas, Washington or Wisconsin). By executing this Agreement, such
spouse acknowledges that she or he has read this Agreement and knows its
contents and agrees to be bound in all respects by the terms of this Agreement
to the same extent as the Stockholders. Each such spouse further agrees that
should she or he predecease the Stockholder to whom she or he is married or
should she or he become divorced from such
41
Stockholder, any of the Company Securities which such spouse may own or in which
she or he may have any interest shall remain subject to all of the restrictions
and to all of the rights of the Stockholders contained in this Agreement.
SECTION 7.14. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Upon such a determination, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner so that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.
SECTION 7.15. Counterparts; Effectiveness. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement shall become effective on the Closing Date,
upon the occurrence of the Effective Time under the Merger Agreement.
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
JOSTENS HOLDING CORP.
By: /s/ Jason Mozingo
------------------------------------
Name: Jason Mozingo
Title: Vice President
DLJMB FUNDS
DLJ Merchant Banking Partners III, L.P.
By: DLJ Merchant Banking III, Inc.
Managing General Partner
By: /s/ David Wittels
------------------------------------
Name: David Wittels
Title: Managing Director
DLJ Merchant Banking III, Inc., as
Advisory General Partner on behalf of
DLJ Offshore Partners III-1, C.V. and as
attorney-in-fact for DLJ Merchant
Banking III, L.P., as Associate General
Partner of DLJ Offshore Partners III-1,
C.V.
By: /s/ David Wittels
------------------------------------
Name: David Wittels
Title: Managing Director
DLJ Merchant Banking III, Inc., as
Advisory General Partner on behalf of
DLJ Offshore Partners III-2, C.V. and as
attorney-in-fact for DLJ Merchant
Banking III, L.P., as Associate General
Partner of DLJ Offshore Partners III-2,
C.V.
By: /s/ David Wittels
------------------------------------
Name: David Wittels
Title: Managing Director
DLJ Merchant Banking III, Inc., as
Advisory General Partner on behalf of
DLJ Offshore Partners III, C.V.
By: /s/ David Wittels
------------------------------------
Name: David Wittels
Title: Managing Director
DLJ MB Partners III GmbH & Co. KG
By: DLJ Merchant Banking III, L.P.
Managing Limited Partner
By: DLJ Merchant Banking III, Inc.
General Partner
By: /s/ David Wittels
------------------------------------
Name: David Wittels
Title: Managing Director
Millennium Partners II, L.P.
By: DLJ Merchant Banking III, Inc.
Managing General Partner
By: /s/ David Wittels
------------------------------------
Name: David Wittels
Title: Managing Director
MBP III Plan Investors, L.P.
By: DLJ LBO Plans Management Corporation
Managing General Partner
By: /s/ David Wittels
------------------------------------
Name: David Wittels
Title: Managing Director
MANAGEMENT STOCKHOLDERS
/s/ Robert Buhrmaster
----------------------------------------
Robert Buhrmaster
/s/ Michael Bailey
----------------------------------------
Michael Bailey
/s/ Carl Blowers
----------------------------------------
Carl Blowers
SCHEDULE A
COMMON SHARE OWNERSHIP OF THE MANAGEMENT SHAREHOLDERS
-----------------------------------------------------
Class A Voting Class B Non-Voting
Management Shareholder Common Stock Common Stock
- ----------------------- -------------- ------------------
Michael Bailey 678 4,219
Carl Blowers 781 3,665
Robert Buhrmaster 3,125 16,875
S-1
EXHIBIT A
JOINDER TO STOCKHOLDERS' AGREEMENT
This Joinder Agreement (this "Joinder Agreement") is made as of the
date written below by the undersigned (the "Joining Party") in accordance with
the Stockholders' Agreement dated as of July 29, 2003 (the "Stockholders'
Agreement") among JOSTENS HOLDING CORP. and certain other persons named therein,
as the same may be amended from time to time. Capitalized terms used, but not
defined, herein shall have the meaning ascribed to such terms in the
Stockholders' Agreement.
The Joining Party hereby acknowledges, agrees and confirms that, by
its execution of this Joinder Agreement, the Joining Party shall be deemed to be
a party to and ["Management Stockholder"] ["Stockholder"] under the
Stockholders' Agreement as of the date hereof and shall have all of the rights
and obligations of the Stockholder from whom it has acquired Company Securities
(to the extent permitted by the Stockholders' Agreement) as if it had executed
the Stockholders' Agreement. The Joining Party hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
contained in the Stockholders' Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Joinder
Agreement as of the date written below.
Date: ___________ ___, 200[_]
[NAME OF JOINING PARTY]
By:
-------------------------------------
Name:
Title:
Address for Notices:
-----------------
-------------------------------------
-------------------------------------
AGREED ON THIS [___] day of [____], 200[_]:
JOSTENS HOLDING CORP.
By:
-----------------------------------
Name:
Title:
A-1
EXHIBIT B
JOSTENS HOLDING CORP.
SUBSCRIPTION AND JOINDER AGREEMENT
Jostens Holding Corp.
5501 Norman Center Drive
Minneapolis, MN 55437
Attn: General Counsel
Ladies and Gentlemen:
The subscriber named on the signature page (hereafter, the "Subscriber") to
this Subscription and Joinder Agreement (the "Subscription Agreement") hereby
irrevocably subscribes, on the terms and conditions set forth herein, for the
number of shares (the "Shares") of Class A Voting Common Stock, par value $.01
per share (the "Class A Common Stock") and Class B Non-Voting Common Stock, par
value $.01 per share (the "Class B Common Stock" and, together with the Class A
Common Stock, the "Common Stock"), of Jostens Holding Corp., a Delaware
corporation (the "Company"), set forth on the signature page to this
Subscription Agreement and agrees to pay the consideration indicated thereon.
The Subscriber is delivering herewith (i) his or her check in the amount set
forth on the signature page hereto, payable to the order of "Jostens Holding
Corp." in full payment for the Shares and (ii) an executed copy of this
Subscription Agreement. Capitalized terms used, but not defined, herein shall
have the meaning ascribed to such terms in the Stockholders' Agreement, dated as
of July 29, 2003, among the Company and the other parties thereto, as the same
shall be amended from time to time, a copy of which is attached hereto as
Exhibit A (the "Stockholders' Agreement").
1. The Subscriber hereby represents and warrants to the Company that the
following statements are true and correct:
a. The Subscriber acknowledges that the offering and sale of the
Shares have not been and will not be registered under the Securities Act of
1933, as amended (the "Securities Act"), or any other applicable state
securities or "blue sky laws" (the "Blue Sky Laws") and are being made in
reliance upon federal and state exemptions for transactions not involving a
public offering. In furtherance thereof, the Subscriber represents and
warrants that he or she is an "accredited investor" (as defined in
Regulation D under the Securities Act and as outlined in Annex A attached
hereto).
b. The Subscriber understands that the Shares are being offered and
sold pursuant to an exemption from registration provided by the Securities
Act and pursuant to similar exemptions available under Blue Sky Laws and
represents and warrants that this investment is being made solely for his
or her own account, for investment purposes only, and not with a view to or
for the resale, distribution, subdivision or fractionalization thereof. The
Subscriber has no agreement or other arrangement, formal or informal, with
any person to sell, transfer or pledge
B-1
all or any part of this investment in the Company or any plans to enter
into any such agreement or arrangement and, consequently, must bear the
economic risk of the investment for an indefinite period of time because
the investment cannot be resold or otherwise transferred unless
subsequently registered under the Securities Act and applicable Blue Sky
Laws, or an exemption from such registration is available and, in any
event, unless transferred in compliance with the Stockholders' Agreement.
c. The Subscriber (either alone or together with any advisors
retained by such person in connection with evaluating the merits and risks
of prospective investments) has sufficient knowledge and experience in
financial and business matters so as to be capable of evaluating the merits
and risks of purchasing the Shares and is able to bear the economic risk of
such investment, including a complete loss. The amount and nature of his or
her investment in the Shares is suitable and consistent with the
Subscriber's investment program, and his or her financial situation enables
the Subscriber to bear the risks of this investment. The Subscriber
represents that he or she has adequate means of providing for his or her
current needs and possible contingencies. The Subscriber understands that
(i) substantial restrictions will exist on transferability of the Shares,
(ii) no market for resale of the Shares exists or is expected to develop,
(iii) the Subscriber may not be able to liquidate his or her investment in
the Company and (iv) any instrument representing a Share may bear a legend
restricting the transfer thereof.
d. The Subscriber has been given the opportunity to (i) ask questions
of, and receive answers from, officers of the Company concerning the terms
and conditions of the offering and other matters pertaining to an
investment in the Company and (ii) obtain any additional information which
the Company can acquire without unreasonable effort or expense that is
necessary to evaluate the merits and risks of an investment in the Company.
In considering a subscription for the Shares, the Subscriber has not relied
upon any representations made by, or other information (whether oral or
written) furnished by or on behalf of, the Company or any officer,
employee, agent or affiliate of either thereof, other than as set forth
herein. The Subscriber has carefully considered and has, to the extent such
person believes such discussion necessary, discussed with legal, tax,
accounting and financial advisers the suitability of an investment in the
Company in light of his or her particular tax and financial situation, and
has determined that the Shares are a suitable investment.
e. The execution, delivery and performance by Subscriber of this
Subscription Agreement and the Stockholders Agreement are within such
person's legal right, power and capacity, require no action by or in
respect of or filing with, any governmental body, agency, or official and
do not and will not contravene, or constitute a default under, any
provision of applicable law or of any agreement, judgment, injunction,
order, decree or other instrument to which such person is a party or by
which such person or any of such person's properties are bound. The
signature on the signature page of this Subscription Agreement is genuine,
and the Subscriber has legal competence and capacity to execute the
B-2
same, and this Subscription Agreement constitutes, and the Stockholders'
Agreement (as deemed executed upon delivery of this Subscription Agreement)
constitutes, a valid and binding agreement of the Subscriber, enforceable
against the Subscriber in accordance with its terms.
f. The Subscriber understands that no federal or state regulatory
agency has made any finding or determination as to the fairness for public
or private investment, nor any recommendation or endorsement, of an
investment in the Company
g. The Subscriber is aware that the Company is relying upon the
representations and warranties set forth in this Subscription Agreement in
determining whether the offering of the Shares meets the conditions
specified in the Securities Act and the Blue Sky Laws regarding the
exemptions from registration provided by such laws.
h. The Subscriber does not live in Arizona, California, Idaho,
Louisiana, Nevada, New Mexico, Puerto Rico, Texas, Washington or Wisconsin
(each, a "Community Property State"). If the Subscriber lives in a
Community Property State and is married, the Subscriber represents that the
Subscriber's spouse has countersigned the signature page to this
Subscription Agreement (which will make such spouse a party hereto, as well
as to the Stockholders' Agreement).
2. By his or her execution of this Subscription Agreement, the Subscriber
shall be deemed to be a party to and a "Management Stockholder" and
"Stockholder" under the Stockholders' Agreement and shall have all of the rights
and obligations of a Management Stockholder and Stockholder thereunder as if he
or she had executed such Stockholders' Agreement. The Subscriber hereby
ratifies, as of the date hereof, and agrees to be bound by, all of the terms,
provisions and conditions contained in the Stockholders' Agreement.
3. Neither this Subscription Agreement nor any provisions hereof will be
waived, modified, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, modification, discharge or
termination is sought.
4. This Subscription Agreement is not transferable or assignable by the
Subscriber. This Subscription Agreement will be binding upon and inure to the
benefit of the parties and their successors and permitted assigns.
5. This Subscription Agreement and the other agreements or documents
referred to herein contain the entire agreement of the parties, and there are no
representations, covenants or other agreements except as stated or referred to
herein and in such other agreements or documents.
6. This Subscription Agreement will be governed by and construed in
accordance with the laws of the State of Delaware, without regard to conflicts
of laws principles.
B-3
7. The Subscriber hereby agrees that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Subscription Agreement or the transactions contemplated
hereby shall be brought in the United States District Court for the Southern
District of New York or any New York State court sitting in New York City, so
long as one of such courts shall have subject matter jurisdiction over such
suit, action or proceeding, and that any case of action arising out of this
Subscription Agreement shall be deemed to have arisen from a transaction of
business in the State of New York, and the Subscriber hereby irrevocably
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that such Subscriber may
now or hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding which
is brought in any such court has been brought in an inconvenient form. Process
in any such suit, action or proceeding may be served on the Subscriber anywhere
in the world, whether within or without the jurisdiction of any such court.
Without limiting the foregoing, the Subscriber agrees that service of process on
such Subscriber as provided in Section 7.03 of the Stockholders' Agreement shall
be deemed effective service of process on such party.
8. THE SUBSCRIBER HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS SUBSCRIPTION
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
9. Any term or provision of this Subscription Agreement that is invalid
or unenforceable in any jurisdiction will, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Subscription Agreement or affecting the validity or unenforceability of any of
the terms or provisions of this Subscription Agreement in any other
jurisdiction.
10. This Subscription Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
B-4
SIGNATURE PAGE
This page constitutes the signature page for the Subscription Agreement relating
to the offering of Shares in the Company. Execution of this signature page
constitutes execution of the Subscription Agreement and the Stockholders'
Agreement.
IN WITNESS WHEREOF, the Subscriber has executed this Subscription
Agreement this ___ day of __________, 200[_].
----------------------------------------
Shares of Class A Common Stock
Purchased (at Purchase Price per
Share of $_____)
----------------------------------------
Shares of Class B Common Stock
Purchased (at Purchase Price per
Share of $_____)
$
----------------------------------------
Total Consideration Payable in respect
of the Shares
SUBSCRIBER
----------------------------------------
Signature
----------------------------------------
(Please Type or Print Name)
----------------------------------------
Signature of Spouse (if required by
section 1(h))
----------------------------------------
(Please Type or Print Name of Spouse,
if required by section 1(h))
ACCEPTED AND AGREED,
as of __________ __, 200[_]:
JOSTENS HOLDING CORP.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
B-5
EXHIBIT A
STOCKHOLDERS' AGREEMENT
See attached.
B-6
ANNEX A
An "Accredited Investor" includes any of the following:
1. Any director or executive officer/1/ of Jostens Holding Corp.
2. Any natural person whose individual net worth, or joint net worth with that
person's spouse, at the time of purchase exceeds $1,000,000./2/
3. Any natural person who has an individual income in excess of $200,000 in
each of the two most recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year./3/
- ----------
/1/ "Executive officer" means the president, any vice president in charge of a
principal business unit, division or function (such as sales, administration or
finance), any other officer who performs a policy making function, or any other
person who performs similar policy making functions for the Company. Executive
officers of subsidiaries of the Company may be deemed executive officers of the
Company if they perform such policy making functions for the Company.
/2/ "Net worth" means the excess of total assets (including principal residence)
at fair market value over total liabilities (including mortgage).
/3/ "Individual income" means adjusted gross income, as reported for U.S.
federal income tax purposes, less any income attributable to a spouse or to
property owned by a spouse, increased by the following amounts (but not
including any amounts attributable to a spouse or to property owned by a
spouse): (i) the amount of any interest income received which is tax-exempt
under Section 103 of the U.S. Internal Revenue Code of 1986, as amended (the
"Code"); (ii) the amount of losses claimed as a limited partner in a limited
partnership as reported on Schedule E of Form 1040; (iii) any deduction claimed
for depletion under Section 611 et seq. of the Code; (iv) amounts contributed to
an Individual Retirement Account (as defined in the Code) or Keogh retirement
plan; (v) alimony paid; (vi) any elective contributions to a cash or deferred
arrangement under Section 401(k) of the Code and (vii) for applicable tax years,
any amount by which income from long-term capital gains has been reduced in
arriving at adjusted gross income pursuant to the provisions of Section 1202 of
the Code (prior to its repeal by the Tax Reform Act of 1986). "Joint income" has
the same meaning as "individual income," except that any income attributable to
a spouse or to property owned by a spouse is added in, and the seven items by
which the adjusted gross income is increased includes any amounts attributable
to a spouse or to property owned by a spouse.
B-7