<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 18, 1997
REGISTRATION NO. 333-26741
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CMP MEDIA INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
<TABLE>
<S> <C> <C>
DELAWARE 2721 11-2240940
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
</TABLE>
600 COMMUNITY DRIVE
MANHASSET, NEW YORK 11030
(516) 562-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
ROBERT D. MARAFIOTI, ESQ.
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
CMP MEDIA INC.
600 Community Drive
Manhasset, New York 11030
(516) 562-5000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S AGENT FOR SERVICE)
------------------------
PLEASE ADDRESS A COPY OF ALL COMMUNICATIONS TO:
<TABLE>
<S> <C>
LEONARD J. BAXT, ESQ. ALAN H. PALEY, ESQ.
DOW, LOHNES & ALBERTSON, PLLC DEBEVOISE & PLIMPTON
1200 New Hampshire Avenue, N.W. 875 Third Avenue
Washington, D.C. 20036-6802 New York, N.Y. 10022
(202) 776-2000 (212) 909-6000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses in connection with the
sale of the shares of Class A Common Stock being registered, other than the
underwriting discounts and commissions. All amounts shown are estimates except
for the Securities and Exchange Commission registration fee and the NASD filing
fee. All of these fees are being paid by the Company.
<TABLE>
<S> <C>
Registration Fee............................................... $ 34,849
NASD Filing Fee................................................ 12,000
Nasdaq National Market Application Fee......................... 5,000
Printing and Engraving Fees.................................... 250,000
Legal Fees and Expenses........................................ 600,000
Accounting Fees and Expenses................................... 275,000
Transfer Agent and Registration Fees........................... 10,000
Miscellaneous.................................................. 185,151
-----------
Total................................................ $ 1,372,000
==========
</TABLE>
- ---------------
* To be supplied by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102(b)(7) of the General Corporation Law of the State of Delaware
(the "DGCL"), provides that a corporation (in its original certificate of
incorporation or an amendment thereto) may eliminate or limit the personal
liability of a director (or certain persons who, pursuant to the provisions of
the certificate of incorporation, exercise or perform duties conferred or
imposed upon directors by the DGCL) to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided that such
provisions shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL
(providing for liability of directors for unlawful payment of dividends or
unlawful stock purchases or redemptions) or (iv) for any transaction from which
the director derived an improper personal benefit. Section 7.5 of the
Certificate of Incorporation of CMP Media Inc., as amended (the "Certificate of
Incorporation"), limits the liability of directors thereof to the extent
permitted by Section 102(b)(7) of the DGCL.
Under Section 145 of the DGCL, in general, a corporation may indemnify its
directors, officers, employees or agents against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties to which they may be made parties by reason of their being or
having been directors, officers, employees or agents and shall so indemnify such
persons only if they acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interests of the corporation and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe their conduct was unlawful. Section 7.4 of the Certificate of
Incorporation gives CMP the power to indemnify its officers, directors,
employees and agents to the full extent permitted by Delaware law.
Under the Underwriting Agreement, the Underwriters are obligated, under
certain circumstances, to indemnify directors and officers of the Registrant
against certain liabilities, including liabilities under the Securities Act of
1933, as amended (the "Securities Act"). Reference is made to the form of
Underwriting Agreement filed as Exhibit 1 hereto.
II-1
<PAGE> 3
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
None.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
(a) Exhibit Exhibit List
- --------------- ------------------------------------------------------------------------------
<S> <C>
**1 -- Form of Underwriting Agreement (U.S. Version)
3.1 -- Certificate of Incorporation of CMP Media Inc., as amended.
**3.2 -- By-laws of CMP Media Inc.
3.3 -- Form of Restated Certificate of Incorporation of CMP Media Inc.
3.4 -- Form of Amended and Restated Bylaws of CMP Media Inc.
**4.1 -- Reference is made to Exhibits 3.1 and 3.2
4.2 -- Specimen Class A Common Stock certificate
4.3 -- Form of 1997 Stockholders' Agreement
5 -- Opinion of Dow, Lohnes & Albertson, PLLC (including consent)
**10.1 -- Employment Agreement with Michael S. Leeds
**10.2 -- Share Purchase Agreement, dated November 27, 1996, among Gerard G. Leeds, Lilo
J. Leeds, CMP Media Inc. and Michael S. Leeds
**10.3 -- Stockholders' Agreement, dated November 27, 1996, among CMP Media Inc., Gerard
G. Leeds, Lilo J. Leeds and Michael S. Leeds
**10.4 -- Option Agreement, dated November 27, 1996, between CMP Media Inc. and Michael
S. Leeds
**10.5 -- Employment Agreement with Daniel H. Leeds
**10.6 -- Share Purchase Agreement, dated November 27, 1996, among Gerard G. Leeds, Lilo
J. Leeds, CMP Media Inc. and Daniel H. Leeds
**10.7 -- Stockholders' Agreement, dated November 27, 1996, among CMP Media Inc., Gerard
G. Leeds, Lilo J. Leeds and Daniel H. Leeds
**10.8 -- Option Agreement, dated November 27, 1996, between CMP Media Inc. and Daniel
H. Leeds
**10.9 -- Employment Agreement with Kenneth D. Cron
**10.10 -- Share Purchase Agreement, dated November 27, 1996, among Gerard G. Leeds, Lilo
J. Leeds, CMP Media Inc. and Kenneth D. Cron
**10.11 -- Stockholders' Agreement, dated November 27, 1996, among CMP Media Inc., Gerard
G. Leeds, Lilo J. Leeds and Kenneth D. Cron
**10.12 -- Option Agreement, dated November 27, 1996, between CMP Media Inc. and Kenneth
D. Cron
**10.13 -- CMP Media Inc. 1996 Stock Option Plan
**10.14 -- CMP Media Inc. Pension Plan
**10.15 -- CMP Publications, Inc. Profit Sharing and Retirement Savings Plan and Trust
**10.16 -- CMP Publications, Inc. 1988 Equity Appreciation Plan
10.17 -- CMP Media Inc. Employee Stock Purchase Plan
**10.18 -- Credit Agreement by and among CMP Publications, Inc., Shawmut Bank Connecticut
and The Chase Manhattan Bank, dated July 15, 1993
**10.19 -- Fifth Amendment to the Credit Agreement by and among CMP Media Inc., Fleet
National Bank and The Chase Manhattan Bank, dated November 14, 1996
**10.20 -- Sixth Amendment to the Credit Agreement by and among CMP Media Inc., Fleet
National Bank and The Chase Manhattan Bank, dated April 15, 1997
10.21 -- CMP Media Inc. Directors' Stock Compensation Plan
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
(a) Exhibit Exhibit List
- --------------- ------------------------------------------------------------------------------
<S> <C>
10.22 -- CMP Media Inc. Stock Incentive Plan
10.23 -- Form of Seventh Amendment to the Credit Agreement by and among CMP Media Inc.,
Fleet National Bank and The Chase Manhattan Bank.
11 -- Statement re computation of per share earnings
**16 -- Letter from Miller, Ellin & Company
**21 -- Subsidiaries of CMP Media Inc.
*23.1 -- Consent of Coopers & Lybrand L.L.P.
23.2 -- Consent of Dow, Lohnes & Albertson, PLLC (contained in their opinion filed as
Exhibit 5)
**24 -- Power of Attorney
27 -- Financial Data Schedule
</TABLE>
- ---------------
* To be filed by amendment.
** Previously filed.
(b) Financial Statement Schedules
All other schedules are omitted because they are not required, they are not
applicable or the required information is already included in the Registrant's
consolidated financial statements or the notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 14 above or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
1. For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as a part of this
Registration Statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed part of this registration
statement as of the time it was declared effective.
2. For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at such time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 5
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, CMP
MEDIA INC. HAS DULY CAUSED THIS AMENDMENT NO. 3 TO THE REGISTRATION STATEMENT TO
BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN
MANHASSET, NEW YORK, ON JULY 18, 1997.
CMP MEDIA INC.
By: /s/ ROBERT D. MARAFIOTI
------------------------------------
(ROBERT D. MARAFIOTI,
VICE PRESIDENT, SECRETARY AND
GENERAL COUNSEL)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE
DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------------- --------------
<C> <S> <C>
* President, Chief Executive Officer
- ------------------------------------------ and a Director (Principal
(MICHAEL S. LEEDS) Executive Officer) July 18, 1997
* Executive Vice President,
- ------------------------------------------ President of International and a
(DANIEL H. LEEDS) Director July 18, 1997
* Executive Vice President,
- ------------------------------------------ President of Publishing July 18, 1997
(KENNETH D. CRON)
* Vice President and Chief Financial
- ------------------------------------------ Officer (Principal Financial
(JOSEPH E. SICHLER) Officer and Principal Accounting
Officer) July 18, 1997
* Director, Co-Chairperson of Board
- ------------------------------------------ of Directors July 18, 1997
(GERARD G. LEEDS)
* Director, Co-Chairperson of Board
- ------------------------------------------ of Directors July 18, 1997
(LILO J. LEEDS)
* Director July 18, 1997
- ------------------------------------------
(RICHARD A. LEEDS)
</TABLE>
*POWER OF ATTORNEY
MICHAEL S. LEEDS, BY SIGNING HIS NAME HERETO, DOES SIGN THIS DOCUMENT ON
BEHALF OF EACH OF THE PERSONS INDICATED ABOVE FOR WHOM HE IS ATTORNEY-IN-FACT
PURSUANT TO A POWER OF ATTORNEY DULY EXECUTED BY SUCH PERSON AND FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
By: /s/ ROBERT D. MARAFIOTI
------------------------------------
(ROBERT D. MARAFIOTI
ATTORNEY-IN-FACT)
II-4
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
- ------- --------------------------------------------------------------------- ------------
<C> <S> <C> <C>
**1 -- Form of Underwriting Agreement (U.S. Version)........................
3.1 -- Certificate of Incorporation of CMP Media Inc., as amended...........
**3.2 -- By-laws of CMP Media Inc. ...........................................
3.3 -- Form of Restated Certificate of Incorporation of CMP Media Inc. .....
3.4 -- Form of Amended and Restated Bylaws of CMP Media Inc. ...............
**4.1 -- Reference is made to Exhibits 3.1 and 3.2............................
4.2 -- Specimen Class A Common Stock certificate............................
4.3 -- Form of Stockholders' Agreement......................................
5 -- Opinion of Dow, Lohnes & Albertson, PLLC (including consent).........
**10.1 -- Employment Agreement with Michael S. Leeds...........................
**10.2 -- Share Purchase Agreement, dated November 27, 1996, among Gerard G.
Leeds, Lilo J. Leeds, CMP Media Inc. and Michael S. Leeds............
**10.3 -- Stockholders' Agreement, dated November 27, 1996, among CMP Media
Inc., Gerard G. Leeds, Lilo J. Leeds and Michael S. Leeds............
**10.4 -- Option Agreement, dated November 27, 1996, between CMP Media Inc. and
Michael S. Leeds.....................................................
**10.5 -- Employment Agreement with Daniel H. Leeds............................
**10.6 -- Share Purchase Agreement, dated November 27, 1996, among Gerard G.
Leeds, Lilo J. Leeds, CMP Media Inc. and Daniel H. Leeds.............
**10.7 -- Stockholders' Agreement, dated November 27, 1996, among CMP Media
Inc., Gerard G. Leeds, Lilo J. Leeds and Daniel H. Leeds.............
**10.8 -- Option Agreement, dated November 27, 1996, between CMP Media Inc. and
Daniel H. Leeds......................................................
**10.9 -- Employment Agreement with Kenneth D. Cron............................
**10.10 -- Share Purchase Agreement, dated November 27, 1996, among Gerard G.
Leeds, Lilo J. Leeds, CMP Media Inc. and Kenneth D. Cron.............
**10.11 -- Stockholders' Agreement, dated November 27, 1996, among CMP Media
Inc., Gerard G. Leeds, Lilo J. Leeds and Kenneth D. Cron.............
**10.12 -- Option Agreement, dated November 27, 1996, between CMP Media Inc. and
Kenneth D. Cron......................................................
**10.13 -- CMP Media Inc. 1996 Stock Option Plan................................
**10.14 -- CMP Media Inc. Pension Plan..........................................
**10.15 -- CMP Publications Inc. Profit Sharing and Retirement Savings Plan and
Trust................................................................
**10.16 -- CMP Publications, Inc. 1988 Equity Appreciation Plan.................
10.17 -- CMP Media Inc. Employee Stock Purchase Plan..........................
**10.18 -- Credit Agreement by and among CMP Publications, Inc., Shawmut Bank
Connecticut and The Chase Manhattan Bank, dated July 15, 1993........
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
- ------- --------------------------------------------------------------------- ------------
<C> <S> <C> <C>
**10.19 -- Fifth Amendment to the Credit Agreement by and among CMP Media Inc.,
Fleet National Bank and The Chase Manhattan Bank, dated November 14,
1996.................................................................
**10.20 -- Sixth Amendment to the Credit Agreement by and among CMP Media Inc.,
Fleet National Bank and The Chase Manhattan Bank, dated April 15,
1997.................................................................
10.21 -- CMP Media Inc. Directors' Stock Compensation Plan....................
10.22 -- CMP Media Inc. Stock Incentive Plan..................................
10.23 -- Form of Seventh Amendment to the Credit Agreement by and among CMP
Media Inc., Fleet National Bank and The Chase Manhattan Bank.........
11 -- Statement re computation of per share earnings.......................
**16 -- Letter from Miller, Ellin & Company..................................
**21 -- Subsidiaries of CMP Media Inc........................................
*23.1 -- Consent of Coopers & Lybrand L.L.P...................................
23.2 -- Consent of Dow, Lohnes & Albertson, PLLC (contained in their opinion
filed as Exhibit 5)..................................................
**24 -- Power of Attorney....................................................
27 -- Financial Data Schedule..............................................
</TABLE>
- ---------------
* To be filed by amendment.
** Previously Filed.
<PAGE> 1
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
CMP MEDIA INC.
ARTICLE ONE
NAME
The name of the corporation is CMP Media Inc. The corporation
is referred to herein as the "Corporation."
ARTICLE TWO
REGISTERED OFFICE
The address of the Corporation's registered office in the
State of Delaware is 1013 Center Road in the City of Wilmington, County of New
Castle, Delaware 19805. The name of its registered agent at such address is The
Prentice-Hall Corporation System, Inc.
ARTICLE THREE
PURPOSE
The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
ARTICLE FOUR
CAPITAL STRUCTURE
The aggregate number of shares of capital stock which the
Corporation shall have the authority to issue is 300,000 shares, which shall be
classified into three classes of capital stock, as follows:
100,000 shares of Class A Common Stock, par value $0.10 per
share (the "Class A Common Stock");
100,000 shares of Class B Common Stock, par value $0.10 per
shares (the "Class B Common Stock"); and
- 1 -
<PAGE> 2
100,000 shares of Class C Common Stock, par value $0.10 per
shares (the "Class C Common Stock").
The Class A Common Stock, the Class B Common Stock, and the
Class C Common Stock collectively are sometimes referred to as the "Common
Stock."
ARTICLE FIVE
COMMON STOCK
5.1 Identical Rights. Except as otherwise set forth in this
ARTICLE FIVE or as otherwise required by law, the rights and privileges of each
class of the Common Stock shall be identical in all respects, including without
limitation the right to participate ratably in dividends and liquidation
distributions and the right of the members of a class of Common Stock to
participate ratably in offers by the Corporation to repurchase shares of Common
Stock that are directed to all of the holders of any other class of the Common
Stock.
5.2 Voting Rights
(a) Class A. Common Stock. Except as otherwise required by
law, each outstanding share of Class A Common Stock shall be entitled to vote on
each matter on which the stockholders of the Corporation shall be entitled to
vote, and each holder of Class B Common Stock shall be entitled to one (1) vote
for each share of such stock held by such holder.
(b) Class B. Common Stock. Except as otherwise required by
law, each outstanding share of Class B Common Stock shall be entitled to vote on
each matter on which the stockholders of the Corporation shall be entitled to
vote, and each holder of Class B Common Stock shall be entitled to ten (10) vote
for each share of such stock held by such holder.
(c) Class C. Common Stock. Except as otherwise required by
law, each outstanding share of Class C Common Stock shall not be entitled to
vote on each matter on which the stockholders of the Corporation shall be
entitled to vote, and each holder of Class C Common Stock shall be included in
determining the number of shares voting or entitled to vote on any such matter.
(d) All Classes to Vote As A Single Class. Except as otherwise
required by law, the holders of the Common Stock entitled to vote on any matters
shall vote together as a single class on all such matters. The stockholders of
the Corporation shall not be entitled to cumulate their votes in any election
of the directors of the Corporation.
5.3 Dividends. The Board of Directors of the Corporation may
cause dividends to paid to holders of shares of Common Stock out of funds
legally available for the
- 2 -
<PAGE> 3
payment of dividend. Any dividend or distribution on the Common Stock shall be
payable on shares of Class A Common Stock, Class B Common Stock and Class C
Common Stock share and share alike; provided that in the case of dividends
payable in shares of Common Stock of the Corporation, or options, warrants or
rights to acquire shares of such Common Stock or securities convertible into or
exchangeable for shares of such Common Stock, the shares, options, warrants,
rights or securities so payable shall be payable in shares of, or options,
warrants or rights to acquire or securities convertible into or exchangeable
for, Common Stock of the same class upon which the dividend or distribution is
being paid.
5.4 Liquidation Rights. In the event of any dissolution,
liquidation or winding up of the affairs of the Corporation, whether voluntary
or involuntary, after payment or provision for payment of the debts and other
liabilities of the Corporation, the remaining assets and funds of the
Corporation, if any, shall be divided among and paid ratably to the holder of
Class A Common Stock, the holders of Class B Common Stock and the holders of
Class C Common Stock share and share alike. A merger or consolidation of the
Corporation with or into any other corporation or a sale or conveyance of all or
any part of the assets of the Corporation (which shall not in fact result in the
liquidation of the Corporation and the distribution of assets to stockholders)
shall not be deemed to be a voluntary or involuntary liquidation or dissolution
or winding up of the Corporation within the meaning of this Section 5.4.
5.5 Preemptive Rights. No stockholder of the Corporation
shall, by reason of holding any equity or voting shares of any class of Common
Stock, have any preemptive or preferential right to purchase or subscribe to any
shares of any class of Common Stock, now or hereafter to be authorized, or any
shares or other securities convertible into or carrying rights or options to
purchase any shares of any class of Common Stock, now or hereafter to be
authorized, whether or not the issuance of any such shares or other securities
would adversely affect the dividend or voting rights of such stockholder, other
than such rights, if any, as the Board of Directors of the Corporation in its
discretion may fix; and the Board of Directors may issue shares of any class of
Common Stock or other securities convertible into or carrying rights or options
to purchase any shares of any class of the Corporation, without offering any
such shares or securities, either in whole or in part, to the existing
stockholders of any class of Common Stock.
5.6 Conversion Rights.
(a) Voluntary Conversion. Each and every share of Class B
Common Stock is convertible into Class A Common Stock at any time at the option
of the holder thereof. Such conversion shall be a share-for-share basis, one
share of Class A Common Stock for each share of Class B Common Stock so
converted.
(b) Automatic Conversion. Each share of Class B Common Stock
shall convert automatically into one fully paid and non-assessable share of
Class A Common stock
- 3 -
<PAGE> 4
upon its sale, assignment, gift or other transfer to a party or entity other
than a Permitted Transferee. For purposes of this Section 5.6(b), a "Permitted
Transferee" of a holder a Class B Common Stock (a "Class B Stockholder") shall
be (i) any of Gerard G. Leeds, Liselotte J. Leeds and any lineal descendant
(including any adopted child) thereof (each a "Leeds Family Member" and
collectively the "Leeds Family Members"); (ii) any trust established and
maintained principally for the benefit of one or more Leeds Family Members and
where one or more Leeds Family Members has a general or special testamentary
power of appointment or general or special non-testamentary power of appointment
limited to any Permitted Transferee or Permitted Transferees thereof; or (iii)
any corporation, partnership or other business entity where (A) the majority of
the board of directors of other managing body are comprised of Leeds Family
Members and/or any Permitted Transferee or Permitted Transferees, or (B) all the
beneficial ownership, or ownership of equity securities of such business entity
representing voting control over such entity, is held by Leeds Family Members
and/or any Permitted Transferee or Permitted Transferees thereof; provided,
however, that if the Class B Stockholder who made such transfer, and all
Permitted Transferees thereof, cease, for whatever reason, to hold all of the
beneficial ownership, or ownership of equity securities representing voting
control, of such corporation, partnership or other business entity, then any and
all shares of Class B Common Stock owned by such corporation, partnership or
other business entity shall be converted automatically, without further action
by or on behalf of any person, into shares of Class A Common Stock as provided
by Section 5.6(b) above and such corporation, partnership or other business
entity shall no longer be a Class B Stockholder.
Notwithstanding anything to the contrary set forth herein, any
Class B Stockholder may pledge his shares of Class B Common Stock to a pledgee
pursuant to a bona fide pledge of such shares as collateral security for
indebtedness due to the pledgee, provided that such shares may not be
transferred to or registered in the name of the pledgee unless such pledgee is a
Permitted Transferee. In the event of foreclosure or other similar action by the
pledgee (other than a pledgee who is a Permitted Transferee), such pledged
shares of Class B Common Stock shall be converted automatically, without further
action by or on behalf of any person, into shares of Class A Common Stock, as
provided in this Section 5.6(b) upon such foreclosure; provided, however, that
if within ten business days after such foreclosure or similar event such
converted shares are returned to the pledgor or transferred to a Permitted
Transferee of the pledgor, such shares shall be converted automatically, without
any act or deed on the part of the Corporation or any other person, into the
same number of shares of Class B Common Stock.
Notwithstanding anything to the contrary set forth herein, the
foregoing automatic conversion provisions of this Section 5.6(b) shall not be
applicable to any transfer of shares of Class B Common Stock by operation of law
upon incompetence, death, dissolution or bankruptcy of any Class B Stockholder
to an executor, guardian or trustee, respectively, of such Class B Stockholder
as long as the beneficial ownership of such shares continues to be held by one
or more Leeds Family Members or Permitted Transferees thereof.
- 4 -
<PAGE> 5
(c) Conversion Procedure
(1) Each conversion of shares of Class B Common Stock
into shares of Class A Common Stock shall be effected by the surrender of the
certificate or certificates representing the shares to be converted (hereinafter
called the "Converting Shares") at the principal office of the Corporation (or
such other office or agency of the Corporation as the Corporation may designate
by written notice to the holders of Common Stock) at any time during its usual
business hours, together with written notice by the holder of such Converting
Shares, stating that such holder desires to convert the Converting Shares, or a
stated number of the shares of Class B Common Stock represented by such
certificate or certificates, into an equal number of shares of Class A Common
Stock (hereinafter called the "Converted Shares"). Such notice shall also state
the name or names (with addresses) and denominations in which the certificate or
certificates for Converted Shares are to be issued and shall include
instructions for the delivery thereof. Promptly after such surrender and the
receipt of such written notice, the Corporation will issue ad deliver in
accordance with the surrendering holder's instructions the certificate or
certificates evidencing the Converted Shares issuable upon such conversion, and
the Corporation will deliver to the converting holder a certificate (which may
contain such legends as appropriate) representing any shares of Class B Common
Stock which were represented by the certificate or certificates that were
delivered to the Corporation in connection with such conversion, but which were
not converted.
(2) In the event of the automatic conversion of
shares of Class B Common Stock into shares of Class A Common Stock, the holder
of such shares shall surrender the certificate or certificates representing the
Converting Shares in accordance with, and the parties to the transfer and the
Corporation shall otherwise comply with, the procedures set forth in Section
5.6(c)(1) hereof; provided, however, that, notwithstanding that any certificate
for Converting Shares shall not have been surrendered for cancellation, all such
Converting Shares shall no longer be deemed outstanding on and after the
effective date of conversion as set forth in Section 5.6(a) or 5.6(b), as the
case may be, and all rights with respect to such Converting Shares shall
forthwith on the effective date of such transfer cease and terminate, except
only the right of the holder or holders thereof to receive the same number of
shares of Converted Shares on the conversion thereof.
(3) Upon the issuance of shares in accordance with
this Section 5.6(c), such shares shall be deemed to be duly authorized, validly
issued, fully paid and nonassessable.
(d) Reservation. The Corporation hereby reserves and shall at
all times reserve and keep available, out of its authorized and unissued shares
of Class A Common Stock, for the purpose of effecting conversions, such number
of duly authorized shares of Class A Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of Class B Common
Stock. The Corporation covenants that all the shares of Class A Common Stock so
issuable shall, when so issued, be duly and validly issued, fully paid and
non-
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<PAGE> 6
assessable, and free from liens and charges with respect to the issue. The
Corporation will take all such action as may be necessary to assure that all
such shares of Class A Common Stock may be so issued without violation of any
applicable law or regulation. The Corporation will not take any action that
results in any adjustment of the conversion ratio if the total number of shares
of Class A Common Stock issued and issuable after such action upon conversion of
the shares of Class B Common Stock would exceed the total number of shares of
Class A Common Stock then authorized by the Corporation's Certificate of
Incorporation, as the same may have been amended or restated.
(e) No Dividends. If a share of Class B Common Stock shall be
converted subsequent to the record date for the payment of a dividend or other
distribution on Class B Common Stock but prior to such payment, the registered
holder of such share at the close of business on such record date shall be
entitled to receive the dividend or other distribution payable on such share on
the date set for payment of such dividend or other distribution notwithstanding
the conversion thereof hereunder or the Corporation's default in payment of the
dividend due on such date.
5.7 Change in Class. No shares of any class of Common Stock
may be subdivided, consolidated, reclassified or otherwise changed unless
concurrently the shares of the other classes of Common Stock are subdivided,
consolidated, reclassified or otherwise changed in the same proportion and the
same manner.
5.8 Mergers and Consolidations. In the event of a merger,
consolidation or other business combination of the Corporation with or into
another entity (whether or not the Corporation is the surviving entity), or in
the event of the dissolution of the Corporation, provision shall be made so that
the holders of each class of Common Stock will be entitled to receive the same
amount and form of consideration per shares as the per share consideration, if
any, received by holders of the other classes of Common Stock in such merger,
consolidation, combination or dissolution; provided, however, that in connection
with any such merger, consolidation or business combination in which shares of
capital stock are distributed, such shares may differ as to voting rights to the
extent and only tot he extent that the voting rights of the Class A Common
Stock, Class B Common Stock and Class C Common Stock differ as provided herein;
and provided further, however, that if such shares differ as to voting rights,
the shares having superior voting rights shall be subject to conversion
provisions that are no more or less favorable to the holders of such shares than
those provided in ARTICLE FIVE hereof with respect to the Class B Common Stock.
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<PAGE> 7
ARTICLE SIX
PERPETUAL EXISTENCE
The Corporation shall have perpetual existence.
ARTICLE SEVEN
BOARD OF DIRECTORS
7.1 In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors of the Corporation is expressly
authorized to adopt, amend or repeal-by-laws of the Corporation, but the
stockholders may adopt additional by-laws and may amend or repeal any by-law
whether adopted by them or otherwise.
7.2 Elections of directors need not be by written ballot
except and to the extent provided in the by-laws of the Corporation.
7.3 Any director or the entire Board of Directors may be
removed, with or without cause, by the vote of the holders of shares of capital
stock then entitled to cast a majority of the votes with respect to the election
of directors.
7.4 The Corporation shall have the power to indemnity its
officers, directors, employees and agents, and such other persons as may be
designated by the Board of Directors of the Corporation or as may be provided in
its by-laws, to the full extent permitted by the laws of the State of Delaware.
The directors and officers of the Corporation shall be entitled to such rights
of indemnification and advancement of expenses, including attorneys' fees, in
the defense of any action or proceeding or threatened action or proceeding in
which a director or officer is or may be made a party as the Board of Directors
may by resolution prescribe.
7.5 A director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director; provided, however, that the foregoing shall not
eliminate or limit the liability of a director (a) for any breach of the
director's duty of loyalty the Corporation or its stockholders, (b) for any act
or omission not in good faith or which involves intentional misconduct or a
knowing violation of law, (c) under Section 174 of the General Corporation Law
of the State of Delaware, or (d) for any transaction from which the director
derived an improper personal benefit. Any repeal or modification of this Article
SEVEN by the stockholders of the Corporation shall not adversely affect any
right or protection of a director of the Corporation existing at the time of
such repeal or modification with respect to acts or omissions occurring prior
to such repeal or modification.
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<PAGE> 8
ARTICLE EIGHT
AMENDMENTS
The Corporation reserves the right at any time and from time
to time to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation (including provisions as may hereafter be added or
inserted in this Certificate of Incorporation as authorized by the laws of the
State of Delaware) in the manner now or hereafter prescribed by law; and all
rights, preferences and privileges of whatsoever nature conferred upon
stockholders, directors or any other persons whomsoever by and pursuant to this
Certificate of Incorporation in its present form or as hereafter amended are
granted subject to the right reserved in this Article EIGHT.
ARTICLE NINE
CONSTRUCTION OF TERMS
The objects, purposes and powers specified in any clause or
paragraph of this Certificate of Incorporation shall be in no way limited or
restricted by reference to or inference from the terms of any other clause or
paragraph of this Certificate of Incorporation. The objects, purposes and powers
in each of the clauses and paragraphs of this Certificate of Incorporation shall
be regarded as independent objects, purposes and powers. The objects, purposes
and powers specified in this Certificate of Incorporation are in furtherance and
not in limitation of the objects, purposes and powers conferred by statute.
IN WITNESS WHEREOF, this Certificate of Incorporation, having
been duly adopted in accordance with Section 102 of the Delaware General
Corporation Law, has been signed under the seal of this Corporation as for this
24th day of May, 1996.
INCORPORATOR;
By: /s/ ROBERT D. MARAFIOTI
------------------------
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<PAGE> 9
CERTIFICATE OF MERGER
MERGING
CMP PUBLICATIONS, INC.
INTO
CMP MEDIA INC.
Pursuant to Section 251(f) and 252 of the Delaware General Corporation
Law, the undersigned do hereby certify as follows:
FIRST: The name and state of incorporation of each of the constituent
corporations is:
Name Type of Entity State of Domicile
CMP Media Inc. Corporation Delaware
CMP Publications, Inc. Corporation New York
SECOND: the Agreement and plan of Merger attached hereto as Exhibit A
has been approved, adopted, certified, executed and acknowledged by each of the
constituent corporations in accordance with Sections 251(f) and 52 of the
Delaware General Corporation Law and Section 907 of the New York Business
Corporation Law.
a. The Agreement and Plan of Merger was duly adopted and
approved by the Board of Directors of CMP Media Inc. on May 29, 1996.
b. There are no shares of capital stock of CMP Media Inc.
issued and outstanding.
c. The Agreement and Plan of Merger was duly adopted and
approved by the Board of Directors of CMP Publications, Inc. on May 10, 1996.
Unanimous written consent of the stockholders of CMP Publications, Inc. was also
given on May 10, 1996.
d. The authorized capital stock of CMP Publications, Inc.
consists of 200,000 shares of common stock at a par value of $.10 each, 100,000
shares of which are shares of Class A Stock and 100,000 of which are shares of
Class B Stock. The issued and outstanding capital stock of CMP Publications Inc.
entitled to vote consists of 52,118 shares of Class A Stock. The holders of all
52,118 shares of capital stock of CMP Publications, Inc. that were entitled to
vote approved the Agreement and Plan of Merger.
- 1 -
<PAGE> 10
THIRD: The surviving corporation is CMP Media Inc. (the "Surviving
Corporation").
FOURTH: The Certificate of Incorporation and the Bylaws of the
Surviving Corporation shall be in the form of the existing Certificate of
Incorporation and Bylaws of CMP Media Inc. No amendments or changes are being
made to the Certificate of Incorporation of the Surviving Corporation.
FIFTH: The executed original of the Agreement and Plan of Merger is on
file at the principal place of business of the Surviving Corporation at 600
Community Drive, Manhasset, NY 11030
SIXTH: A copy of the Agreement and Plan of Merger will be furnished by
the Surviving Corporation, on request and without cost, to any stockholder of
any constituent corporation.
SEVENTH: The merger shall be effective as of May 31, 1996.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Ownership and Merger as of the 29th day of May, 1996.
CMP MEDIA INC. CMP PUBLICATIONS, INC.
By: /s/ DANIEL H. LEEDS By: /s/ DANIEL H. LEEDS
------------------- -------------------
Daniel H. Leeds Daniel H. Leeds
Vice President Vice President
By: /s/ ROBERT D. MARAFIOTI By: /s/ ROBERT D. MARAFIOTI
----------------------- -----------------------
Robert D. Marafioti Robert D. Marafioti
Assistant Secretary Assistant Secretary
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<PAGE> 11
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
MERGING
CMP PUBLICATIONS, INC.
WITH AND INTO
CMP MEDIA INC.
AGREEMENT AND PLAN OF MERGER, dated as of May 29, 1996, by and among
CMP Publications, Inc., a New York corporation, and CMP Media, Inc., a Delaware
corporation. Pursuant to Section 907 of the New York Business Corporation Law
and Sections 251(f) and 252 of the Delaware General Corporation Law, the parties
agree that CMP Publications, Inc. shall merge with and into CMP Media Inc. (the
"Merger") according to the terms set forth below:
FIRST: The name of the disappearing corporation is CMP Publications, Inc. (the
"Disappearing Corporation"). It shall be merged with and into CMP Media
Inc., with CMP Media Inc. being the surviving corporation ("Surviving
Corporation").
SECOND: There are no shares of capital stock of CMP Media INC. issued and
outstanding. There are 52,118 shares of common stock of CMP
Publications, Inc. issued and outstanding of record.
THIRD: The Merger shall be effective as of the close of business of May 31,
1996 (the "Effective Time"). Upon the Merger, the corporate existence
of CMP Media Inc., with all its purposes, powers and objects, shall
continue unaffected and unimpaired by the Merger, and the corporate
identity and existence of CMP Publications, Inc., with all its
purposes, powers and objects shall be merged with and into CMP Media,
and CMP Media Inc., as the corporation surviving the Merger, shall be
fully vested therewith. The separate existence and corporate
organization of CMP Publications, Inc. shall cease as of the Effective
Time.
FOURTH: As of the Effective Time, the issued and outstanding shares of the
capital stock of CMP Media Inc. and CMP Publications, Inc. shall become
and be converted into shares of stock of the Surviving Corporation or
be canceled as follows: the 52,118 shares of CMP Publications, Inc.
Class A Common Stock which are outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without any action by
the holder thereof, be and become 52,118 shares of Class B Common
Stock of the Surviving Corporation. At and after the Effective Time,
the Surviving Corporation shall possess all the rights, privileges,
immunities, powers, and purposes, of each of CMP Media Inc. and CMP
Publications, Inc.; all the property, real and personal, shall vest in
the Surviving Corporation without further act or deed; and the
Surviving Corporation shall
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<PAGE> 12
assume and be liable for all the liabilities, obligations and penalties
of CMP Media Inc. and CMP Publications, Inc.
FIFTH: As of the Effective Time, the Certificate of Incorporation and the
Bylaws of the Surviving Corporation shall be the Certificate of
Incorporation and the Bylaws of CMP Media Inc.
IN WITNESS WHEREOF, each of the parties has caused this Agreement and
Plan of Merger to be executed on its behalf by its duly authorized officers, as
of the day and year first written above.
CMP MEDIA INC.
By: /s/ MICHAEL S. LEEDS
-----------------------
Michael S. Leeds
President
By: /s/ ROBERT D. MARAFIOTI
-----------------------
Robert D. Marafioti
Assistant Secretary
CMP PUBLICATIONS, INC.
By: /s/ MICHAEL S. LEEDS
-----------------------
Michael S. Leeds
President
By: /s/ ROBERT D. MARAFIOTI
-----------------------
Robert D. Marafioti
Assistant Secretary
- 2 -
<PAGE> 13
CERTIFICATION OF ASSISTANT SECRETARY
OF
CMP MEDIA INC.
Pursuant to Section 228, 251(f) and 252 of the Delaware General
Corporation Law, the undersigned, Robert D. Marafioti, Assistant Secretary of
CMP MEDIA INC., a corporation organized and existing under the laws of the State
of Delaware, does hereby certify as follows:
FIRST: The Agreement and Plan of Merger to which this certificate is attached
was duly adopted and approved by the Board of Directors of said CMP
MEDIA INC. by written consent dated May 29, 1996.
SECOND: There were no shares of capital stock of CMP MEDIA INC. issued and
outstanding prior to the adoption of the resolutions approving the
Agreement and Plan of Merger by the Board of Directors of said CMP
MEDIA INC.
IN WITNESS WHEREOF, the undersigned has executed this Certification of
Assistant Secretary as of the 29th day of May, 1996.
CMP MEDIA INC.
By: /s/ ROBERT D. MARAFIOTI
-----------------------
Robert D. Marafioti
Assistant Secretary
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<PAGE> 14
CERTIFICATE OF MERGER
RELATING TO THE MERGER OF
CMP COMMUNICATIONS CORP.
INTO
CMP MEDIA INC.
Pursuant to Section 251(c) of the General Corporation Law of State of
Delaware, the undersigned do hereby certify as follows:
FIRST: The name and state of incorporation of each of the constituent
corporations is:
NAME TYPE OF ENTITY STATE OF DOMICILE
CMP Media Inc. Corporation Delaware
CMP Communications Corp. Corporation New York
SECOND: the Agreement and plan of Merger merging CMP Communications
Corp with and into CMP Media Inc. has been approved, adopted, certified,
executed and acknowledged by each of the constituent corporations in accordance
with Sections 251(c) of the General Corporation Law of the State of Delaware.
THIRD: The surviving corporation is CMP Media Inc. (the "Surviving
Corporation").
FOURTH: The Certificate of Incorporation and the Bylaws of the
Surviving Corporation shall be in the form of the existing Certificate of
Incorporation and Bylaws of CMP Media Inc. No amendments or changes are being
made to the Certificate of Incorporation of the Surviving Corporation.
FIFTH: The executed original of the Agreement and Plan of Merger is on
file at the principal place of business of the Surviving Corporation at 600
Community Drive, Manhasset, NY 11030
SIXTH: A copy of the Agreement and Plan of Merger will be furnished by
the Surviving Corporation, on request and without cost, to any stockholder of
any constituent corporation.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Ownership and Merger as of the 21st day of October, 1996.
- 1 -
<PAGE> 15
CMP MEDIA INC.
By: /s/ MICHEAL S. LEEDS
------------------------
Micheal S. Leeds
President
By: /s/ ROBERT D. MARAFIOTI
------------------------
Robert D. Marafioti
Assistant Secretary
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<PAGE> 16
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CMP MEDIA INC.
Pursuant to Section 242 of the Delaware General Corporation Law, CMP Media
Inc., a corporation organized and existing under and by virtue of the laws of
the State of Delaware (the "Company"), does hereby certify as follows:
1. The Board of Directors of the Company, by unanimous written consent
pursuant to Section 14(f) of the Delaware Corporation Law, duly adopted
resolutions proposing and declaring advisable an amendment to the Certificate of
Incorporation of the Company to increase the authorized number of shares of
Common Stock of the Company and directing that said amendment by submitted to
the stockholders of the Company for consideration and approval thereof. The
resolutions setting forth the proposed amendment are as follows:
RESOLVED, that in order to effectuate an increase in the authorized
number of shares of Common Stock of the Company, the Certificate of
Incorporation of the Company be amended by striking out Article Four
thereof and substituting in lieu of such Article Four the following new
Article:
ARTICLE FOUR
CAPITAL STRUCTURE
The aggregate number of shares of capital stock which the
Corporation shall have the authority to issue is 3,000,000 shares,
which shall be classified into three classes of common stock as
follows:
1,000,000 shares of Class A Common Stock, par value $0.10 per
share (the "Class A Common Stock");
1,000,000 shares of Class B Common Stock, par value $0.10 per
share (the "Class B Common Stock"); and
1,000,000 shares of Class C Common Stock, par value $0.10 per
share (the "Class C Common Stock").
The Class A Common Stock, the Class B Common Stock, and the
Class C Common Stock collectively are sometimes referred to as the
"Common Stock."
- 1 -
<PAGE> 17
2. Thereafter, all the stockholders of the Company waived all notice of
the time, place and purposes of a meeting of the stockholders o the Company and
gave their unanimous written consent to said amendment in accordance with the
provisions of Section 228 of the Delaware General Corporation Law, and such
unanimous written consent was filed with the Secretary of the Company.
3. The amendment of the Certificate of Incorporation herein certified
has been duly adopted in accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware.
4. The aforesaid amendment to the Company's Certificate of
Incorporation shall be effective as of the effective date of the filing of this
Certificate of Amendment of the Certificate of Incorporation with the Secretary
of State of the State of Delaware.
5. The capital of the Company will not be reduced under or by reason of
said amendment.
IN WITNESS WHEREOF, CMP Media Inc. has caused this Certificate to be
executed by Michael S. Leeds, its President, as of the 31st day of January,
1997.
By: /s/ MICHAEL S. LEEDS
--------------------
Michael S. Leeds
President
- 2 -
<PAGE> 18
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CMP MEDIA INC.
Pursuant to Section 242 of the Delaware General Corporation Law, CMP
Media Inc., a corporation organized and existing by virtue of the laws of the
State of Delaware (the "Corporation"), does hereby certify as follows:
1. The Board of Directors and the stockholders of the Corporation, duly
adopted resolutions proposing and declaring advisable an amendment to the
Corporation's Certificate of Incorporation (set forth in paragraph 2 below) to
provide for the conversion of shares of the Corporation's Class C Common Stock
into shares of other classes of the Corporation's Common Stock under certain
circumstances.
2. The Corporation's Certificate of Incorporation is hereby amended by
striking out Article Five thereof in its entirety and by substituting in lieu of
such Article Five the following new Article:
ARTICLE FIVE
COMMON STOCK
5.1 Identical Rights. Except as otherwise set forth in this
ARTICLE FIVE or as otherwise required by law, the rights and privileges
of each class of the Common Stock shall be identical in all respects,
including without limitation the right to participate ratably in
dividends and liquidation distributions and the right of the members of
a class of Common Stock to participate ratably in offers by the
Corporation to repurchase shares of Common Stock that are directed to
all of the holders of any other class of the Common Stock.
5.2 Voting Rights
(a) Class A. Common Stock. Except as otherwise required by
law, each outstanding share of Class A Common Stock shall be entitled
to vote on each matter on which the stockholders of the Corporation
shall be entitled to vote, and each holder of Class A Common Stock
shall be entitled to one (1) vote for each share of such stock held by
such holder.
(b) Class B. Common Stock. Except as otherwise required by
law, each outstanding share of Class B Common Stock shall be entitled
to vote on each matter on which the stockholders of the Corporation
shall be entitled to vote, and each holder of Class B Common Stock
shall be entitled to ten (10) votes for each share of such stock
held by such holder.
(c) Class C Common Stock. Except as otherwise required by
---------------------
law, each outstanding share of Class C Common Stock shall not be
entitled to vote on any matter on which the stockholders of the
Corporation shall be entitled to vote and shares of Class C
Common Stock shall not be included in determining the number of
shares voting or entitled to vote on any matter.
(d) All Classes To Vote As A Single Class. Except as
--------------------------------------
otherwise required by law, the holders of the Common Stock entitled to
vote on any matter shall vote together as a single class on all such
matters. The stockholders of the Corporation shall not be entitled to
cumulate their votes in any election of the directors of the
Corporation or with respect to any other matter.
5.3 Dividends. The Board of Directors of the Corporation may
----------
cause dividends to be paid to holders of shares of Common Stock out of
funds legally available for the payment of dividends. Any dividend or
distribution on the Common Stock shall be payable on shares of Class A
Common Stock, Class B Common Stock and Class C Common Stock share and
share alike; provided that in the case of dividends payable in shares
of Common Stock of the Corporation, or options, warrants or rights to
acquire shares of such Common Stock or securities convertible into or
exchangeable for shares of such Common Stock, the shares, options,
warrants, rights or securities so payable shall be payable in shares
of, or options, warrants or rights to acquire or securities
convertible into or exchangeable for, either Class C Common Stock (if
so determined by the Board of Directors) or Common Stock of the same
class upon which the dividend or distribution is being paid.
5.4 Liquidation Rights. In the event of any dissolution,
-------------------
liquidation or winding up of the affairs of the Corporation, whether
voluntary or involuntary, after payment or provision for payment of
the debts and other liabilities of the Corporation, the remaining
assets and funds of the Corporation, if any, shall be divided among
and paid ratably to the holders of Class A Common Stock, the holders
of Class B Common Stock and the holders of Class C Common Stock share
and share alike. A merger or consolidation of the Corporation with or
into any other corporation or a sale or conveyance of all or any part
of the assets of the Corporation (which shall not in fact result in
the liquidation of the Corporation and the distribution of assets to
stockholders) shall not be deemed to be a voluntary or involuntary
liquidation or dissolution or winding up of the Corporation within the
meaning of this Section 5.4
5.5 Preemptive Rights. No stockholder of the Corporation
shall, by reason of holding any equity or voting shares of any class of
Common Stock, have any preemptive or preferential right to purchase or
subscribe to any shares of any
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<PAGE> 19
class of Common Stock, now or hereafter to be authorized, or any shares
or other securities convertible into or carrying rights or options to
purchase any shares of any class of Common Stock, now or hereafter to
be authorized, whether or not the issuance of any such shares or other
securities would adversely affect the dividend or voting rights of such
stockholder, other than such rights, if any, as the Board of Directors
of the Corporation in its discretion from time to time may grant and at
such price as the Board of Directors may fix; and the Board of
Directors may issue shares of any class of Common Stock or other
securities convertible into or carrying rights or options to purchase
any shares of any class of the Corporation, without offering any such
shares or securities, either in whole or in part, to the existing
stockholders of any class of Common Stock.
5.6 Conversion Rights.
(a) Class B Voluntary Conversion. Each and every shares of
Class B Common Stock is convertible into Class A Common Stock at any
time at the option of the holder thereof. Such conversion shall be a
share-for-share basis, one share of Class A Common Stock for each share
of Class B Common Stock so converted.
(b) Class B Automatic Conversion. Each share of Class B Common
Stock shall convert automatically into one fully paid and
non-assessable share of Class A Common stock upon its sale, assignment,
gift or other transfer to a party or entity other than a Permitted
Transferee. For purposes of this Section 5.6(b), a "Permitted
Transferee" of a holder a Class B Common Stock (a "Class B
Stockholder") shall be (i) each of Gerard G. Leeds, Liselotte J. Leeds,
Michael S. Leeds, Richard A. Leeds, Daniel H. Leeds, Greg Joblin-Leeds,
Jennifer Leeds-Lukehart and any lineal descendant (including any
adopted child) thereof (each a "Leeds Family Member" and collectively
the "Leeds Family Members"); (ii) any trust established and maintained
principally for the benefit of one or more Leeds Family Members and
where one or more Leeds Family Members has a general or special
testamentary power of appointment or general or special
non-testamentary power of appointment limited to any Permitted
Transferee or Permitted Transferees thereof; or (iii) any corporation,
partnership, limited liability company, limited liability partnership
or other business entity where (A) the majority of the board of
directors of other managing body are comprised of Leeds Family Members,
or (B) all the beneficial ownership, or ownership of equity securities
of such business entity representing voting control over such entity,
is held by Leeds Family Members and/or any Permitted Transferee or
Permitted Transferees thereof; provided, however, that if the Class B
Stockholder who made such transfer, and Permitted Transferees thereof,
cease, for whatever reason, to hold all of the beneficial ownership, or
ownership of equity securities representing voting control, of such
corporation, partnership, limited liability company, limited liability
partnership or other business entity, then any
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<PAGE> 20
and all shares of Class B Common Stock owned by such corporation,
partnership, limited liability company, limited liability partnership
or other business entity shall be converted automatically, without
further action by or on behalf of any person, into shares of Class A
Common Stock as provided by Section 5.6(b) above and such corporation,
partnership, limited liability company, limited liability partnership
or other business entity shall no longer be a Class B Stockholder.
Notwithstanding anything to the contrary set forth herein, any
Class B Stockholder may pledge his shares of Class B Common Stock to a
pledgee pursuant to a bona fide pledge of such shares as collateral
security for indebtedness due to the pledgee, provided that such shares
may not be transferred to or registered in the name of the pledgee
unless such pledgee is a Permitted Transferee. In the event of
foreclosure or other similar action by the pledgee (other than a
pledgee who is a Permitted Transferee), such pledged shares of Class B
Common Stock shall be converted automatically, without further action
by or on behalf of any person, into shares of Class A Common Stock, as
provided in this Section 5.6(b) upon such foreclosure; provided,
however, that if within ten business days after such foreclosure or
similar event such converted shares are returned to the pledgor or
transferred to a Permitted Transferee of the pledgor, such shares shall
be converted automatically, without any act or deed on the part of the
Corporation or any other person, into the same number of shares of
Class B Common Stock.
Notwithstanding anything to the contrary set forth herein, the
foregoing automatic conversion provisions of this Section 5.6(b) shall
not be applicable to any transfer of shares of Class B Common Stock by
operation of law upon incompetence, death, dissolution or bankruptcy of
any Class B Stockholder to an executor, guardian or trustee,
respectively, of such Class B Stockholder as long as the beneficial
ownership of such shares continues to be held by one or more Leeds
Family Members or Permitted Transferee thereof.
(c) Class C Conversion. Shares of Class C Common Stock
generally shall not be convertible into any other shares of capital
stock of the Corporation; provided, however, that the Corporation's
Board of Directors shall have the authority to designate any shares of
Class C Common Stock previously or hereafter issued as a dividend
payable with respect to any other shares of the Company's Common Stock
as being shares that may be automatically converted without further
action on the part of any stockholder, upon consummation of a firm
commitment underwritten initial public offering of the Corporation's
Class A Common Stock (an "IPO"), into an equal number of shares of the
class of Common Stock upon which such Class C Common Stock shares were
declared as dividends (the "Underlying Common Stock"); provided,
however, that if, subsequent to the declaration of a stock dividend of
shares of convertible Class C
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<PAGE> 21
Common Stock, any shares of the Underlying Common Stock are converted
into a different class of Common Stock, upon the consummation of an IPO
the shares of Class C Common Stock issued as a dividend payable with
respect to such converted shares of Underlying Common Stock shall be
converted into an equal number of shares of the same class of such
shares of the Underlying Common Stock as so converted.
(d) Class B and C Conversion Procedure.
(1) Each conversion of shares pursuant to this
Section 5.6 shall be effected by the surrender of the certificate of
certificates representing the shares to be converted (hereinafter
called the "Converting Shares") at the principal office of the
Corporation (or such other office or agency of the Corporation as the
Corporation may designate by written notice to the holders of Common
Stock) at any time during its usual business hours, together with
written notice by the holder of such Converting Shares, stating that
such holder desires to convert the Converting Shares, or a stated
number of the shares of Class B Common Stock or Class C Common Stock
represented by such certificate or certificates, into an equal number
of shares of Class A Common Stock or Class B Common Stock (hereinafter
called the ""Converted Shares"), as appropriate in accordance with this
Section 5.6. Such notice shall also state the name or names (with
addresses) and denominations in which the certificate or certificates
for Converted Shares are to be issued and shall include instructions
for the delivery thereof. Promptly after such surrender and the receipt
of such written notice, the Corporation will issue and deliver in
accordance with the surrendering holder's instructions the certificate
or certificates evidencing the Converted Shares issuable upon such
conversion, and the Corporation will deliver to the converting holder a
certificate (which may contain such legends as appropriate)
representing any shares of Class B Common Stock or Class C Common Stock
which were represented by the certificate or certificates that were
delivered to the Corporation in connection with such conversion, but
which were not converted.
(2) In the event of the automatic conversion of
shares of Class B Common Stock or Class C Stock into shares of Class A
Common Stock or Class B Common Stock, as the case may be, the holder of
such shares shall surrender the certificate or certificates
representing the Converting Shares in accordance with, and the parties
to the transfer and the Corporation shall otherwise comply with, the
procedures set forth in Section 5.6(d)(1) hereof; provided, however,
that, notwithstanding that any certificate for Converting Shares shall
not have been surrendered for cancellation, all such Converting Shares
shall no longer be deemed outstanding on and after the effective date
of conversion as set forth in Section 5.6(a), 5.6(b) or 5.6(c), as the
case may be, and all rights with respect to such Converting Shares
shall forthwith on the effective date of such transfer cease and
terminate, except only the right of the holder or holders thereof to
receive the same number of shares of Converted Shares on the conversion
thereof.
(3) Upon the issuance of shares in accordance with
this Section 5.6(d), such shares shall be deemed to be duly authorized,
validly issued, fully paid and nonassessable.
(e) Reservation. The Corporation hereby reserves and shall at
all times reserve and keep available, out of its authorized and
unissued shares of Class A Common Stock and B Common Stock, for the
purpose of effecting conversions, such number of duly authorized shares
of Class A Common Stock and B Common Stock as shall from time to time
be sufficient to effect the conversion of all outstanding shares of
Class B Common Stock and convertible Class C Common Stock. The
Corporation covenants that all the shares of Class A Common Stock or
Class C Common Stock so issuable shall, when so issued, be duly and
validly issued, fully paid and non-assessable, and free from liens and
charges with respect to the issue. The Corporation will take all such
action as may be necessary to assure that all such shares of Class A
Common Stock or Class C Common Stock may be so issued without violation
of any applicable law or regulation. The Corporation will not take any
action that results in any adjustment of the conversion ratio if the
total number of shares of Class A Common Stock or Class C Common Stock
issued and issuable after such action upon conversion of the shares of
Class B Common Stock or Class C Common Stock would exceed the total
number of shares of Class A Common Stock or Class C Common Stock then
authorized by the Corporation's Certificate of Incorporation, as the
same may have been amended or restated.
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<PAGE> 22
(f) No Dividends. If a share of Class B Common Stock or Class
B Common Stock shall be converted subsequent to the record date for the
payment of a dividend or other distribution on Class A Common Stock or
Class B Common Stock but prior to such payment, the registered holder
of such share at the close of business on such record date shall be
entitled to receive the dividend or other distribution payable on such
share on the date set for payment of such dividend or other
distribution notwithstanding the conversion thereof hereunder or the
Corporation's default in payment of the dividend due on such date.
5.7 Change in Class. No shares of any class of Common Stock
may be subdivided, consolidated, reclassified or otherwise changed
unless concurrently the shares of the other classes of Common Stock are
subdivided, consolidated, reclassified or otherwise changed in the same
proportion and the same manner.
5.8 Mergers and Consolidations. In the event of a merger,
consolidation or other business combination of the Corporation with or
into another entity (whether or not the Corporation is the surviving
entity), or in the event of the dissolution of the Corporation,
provision shall be made so that the holders of each class of Common
Stock will be entitled to receive the same amount and form of
consideration per shares as the per share consideration, if any,
received by holders of the other classes of Common Stock in such
merger, consolidation, combination or dissolution; provided, however,
that in connection with any such merger, consolidation or business
combination in which shares of capital stock are distributed, such
shares may differ as to voting rights to the extent and only to the
extent that the voting rights of the Class A Common Stock, Class B
Common Stock and Class C Common Stock differ as provided herein; and
provided further, however, that if such shares differ as to voting
rights, the shares having superior voting rights shall be subject to
conversion provisions that are no more or less favorable to the holders
of such shares than those provided in ARTICLE FIVE hereof with respect
to the Class B Common Stock.
3. The aforesaid amendment to the Company's Certificate of
Incorporation shall be effective as of the effective date of the filing of this
Certificate of Amendment of the Certificate of Incorporation with the Secretary
of State of the State of Delaware.
4. The capital of the Company will not be reduced under or by reason of
said amendment.
IN WITNESS WHEREOF, CMP Media Inc. has caused this Certificate of
Amendment to its Certificate of Incorporation to be executed by Michael S.
Leeds, its President and CEO, as of February 26, 1997.
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<PAGE> 23
By: /s/ MICHAEL S. LEEDS
--------------------
Michael S. Leeds
President and CEO
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<PAGE> 1
Exhibit 3.3
- 1 -
EXHIBIT B
RESTATED
CERTIFICATE OF INCORPORATION
OF
CMP MEDIA INC.
CMP Media Inc., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), hereby certifies as follows:
1. The name of the Corporation is CMP Media Inc.
2. The Corporation was originally incorporated under the same
name, and the original Certificate of Incorporation of the Corporation was filed
with the Secretary of the State of Delaware on May 24, 1996.
3. This Restated Certificate of Incorporation was duly adopted
in accordance with the provisions of Sections 141(f), 242, 245 and 228 of the
General Corporation Law of the State of Delaware by the unanimous written
consent of the Corporation's Board of Directors and stockholders, with written
notice being provided to all stockholders in accordance with Section 228(d) of
such law. This Restated Certificate of Incorporation restates, integrates,
amends and supersedes the provisions of the Certificate of Incorporation of this
Corporation as heretofore amended.
4. The text of the Certificate of Incorporation as heretofore
amended is hereby restated and further amended to read in its entirety as
follows:
ARTICLE ONE
NAME
<PAGE> 2
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The name of the corporation is CMP Media Inc. The corporation
is referred to herein as the "Corporation".
ARTICLE TWO
REGISTERED OFFICE
The address of the Corporation's registered office in the
State of Delaware is 1013 Centre Road in the City of Wilmington, County of New
Castle, Delaware 19805. The name of its registered agent at such address is The
Prentice-Hall Corporation System, Inc.
ARTICLE THREE
PURPOSE
The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
ARTICLE FOUR
CAPITAL STRUCTURE
The aggregate number of shares of capital stock which the
Corporation shall have the authority to issue is seventy-five million
(75,000,000) shares, classified into three classes of capital stock, as follows:
fifty million (50,000,000) shares of Class A Common Stock, par
value $0.01 per share (the "Class A Common Stock");
twenty million (20,000,000) shares of Class B Common Stock,
par value $0.01 per share (the "Class B Common Stock"); and
five million (5,000,000) shares of Preferred Stock, par value
$0.01 per share (the "Preferred Stock").
<PAGE> 3
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The Class A Common Stock and the Class B Common Stock
collectively are sometimes referred to as the "Common Stock".
ARTICLE FIVE
COMMON STOCK
5.1 Identical Rights. Except as otherwise set forth in this
ARTICLE FIVE or as otherwise required by law, the rights and privileges of each
class of the Common Stock shall be identical in all respects, including without
limitation the right to participate ratably in dividends and liquidation
distributions and the right of the members of a class of Common Stock to
participate ratably in offers by the Corporation to repurchase shares of Common
Stock that are directed to all of the holders of any other class of the Common
Stock.
5.2 Voting Rights.
(a) Class A Common Stock. Except as otherwise required by law,
each outstanding share of Class A Common Stock shall be entitled to vote on each
matter on which the stockholders of the Corporation shall be entitled to vote,
and each holder of Class A Common Stock shall be entitled to one (1) vote for
each share of such stock held by such holder.
(b) Class B Common Stock. Except as otherwise required by law,
each outstanding share of Class B Common Stock shall be entitled to vote on each
matter on which the stockholders of the Corporation shall be entitled to vote,
and each holder of Class B Common Stock shall be entitled to ten (10) votes for
each share of such stock held by such holder.
(c) All Classes To Vote As A Single Class. Except as otherwise
required by law, the holders of the Common Stock entitled to vote on any matter
shall vote together as a single class on all such matters. The stockholders of
the Corporation shall not be entitled to cumulate their votes in any election of
the directors of the Corporation or with respect to any other matter.
<PAGE> 4
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5.3 Dividends. The Board of Directors of the Corporation may
cause dividends to be paid to holders of Common Stock out of funds legally
available for the payment of dividends. Any dividend or distribution on the
Common Stock shall be payable on shares of Class A Common Stock and Class B
Common Stock share and share alike; provided that in the case of dividends
payable in shares of Common Stock of the Corporation, or options, warrants or
rights to acquire shares of such Common Stock or securities convertible into or
exchangeable for shares of such Common Stock, the shares, options, warrants,
rights or securities so payable shall be payable in shares of, or options,
warrants or rights to acquire or securities convertible into or exchangeable for
shares of Common Stock of the same class as the class upon which the dividend or
distribution is being paid.
5.4 Liquidation Rights. In the event of any dissolution,
liquidation or winding up of the affairs of the Corporation, whether voluntary
or involuntary, after payment or provision for payment of the debts and other
liabilities of the Corporation, the remaining assets and funds of the
Corporation, if any, shall be divided among and paid ratably to the holders of
Class A Common Stock and the holders of Class B Common Stock share and share
alike. A merger or consolidation of the Corporation with or into any other
corporation or a sale or conveyance of all or any part of the assets of the
Corporation (which shall not in fact result in the liquidation of the
Corporation and the distribution of assets to stockholders) shall not be deemed
to be a voluntary or involuntary liquidation or dissolution or winding up of the
Corporation within the meaning of this Section 5.4.
5.5 Preemptive Rights. No stockholder of the Corporation
shall, by reason of holding any equity or voting shares of any class of Common
Stock, have any preemptive or preferential right to purchase or subscribe to any
shares of any class of Common Stock, now or hereafter to be authorized, or any
shares or other securities convertible into or carrying rights or options to
purchase any shares of any class of Common Stock, now or hereafter to be
authorized, whether or not the issuance of any such shares or other securities
would adversely affect the dividend or voting rights of such stockholder, other
than such rights, if any, as the Board of Directors of the Corporation in its
discretion from time
<PAGE> 5
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to time may grant and at such price as the Board of Directors in its discretion
may fix; and the Board of Directors may issue shares of any class of Common
Stock or other securities convertible into or carrying rights or options to
purchase any shares of any class of the Corporation, without offering any such
shares or securities, either in whole or in part, to the existing stockholders
of any class of Common Stock.
5.6 Conversion Rights.
(a) Class B Voluntary Conversion. Each and every share of
Class B Common Stock is convertible into a share of Class A Common Stock at any
time at the option of the holder thereof. Such conversion shall be on a
share-for-share basis, one share of Class A Common Stock for each share of Class
B Common Stock so converted.
(b) Class B Automatic Conversion. Each share of Class B Common
Stock shall convert automatically into one fully paid and non-assessable share
of Class A Common Stock upon its issuance, sale, assignment, gift, pledge,
hypothecation or any other transfer to a person or entity other than (i) a
member of the Founding Family, (ii) a Permitted Transferee of a holder of Class
B Common Stock, or (iii) a Qualified Foundation of a holder of Class B Common
Stock (as such terms are defined herein). For purposes of this Section 5.6(b), a
holder of Class B Common Stock is sometimes referred to as a "Class B
Stockholder", and a "member of the Founding Family" shall mean any of Gerard G.
Leeds, Lilo J. Leeds, Michael S. Leeds, Richard A. Leeds, Daniel H. Leeds, Greg
Jobin-Leeds, Jennifer Leeds and any lineal descendant (including any adopted
child) thereof. For purposes of this Section 5.6(b), a "Permitted Transferee" of
a Class B Stockholder shall mean the spouse of any holder of Class B Common
Stock, any issue, parent or sibling of such Class B Stockholder, any issue of
such sibling, any former spouse of such Class B Stockholder who is the parent of
such Class B Stockholder's issue or any entity (including a trust, corporation
or partnership) in which such Class B Stockholder and/or any Permitted
Transferees of such Class B Stockholder either individually or collectively have
the majority voting interest and of which, in the case of a trust or similar
entity, the beneficiaries are any of the aforesaid persons; in the case of a
corporation or similar entity, the stockholders are any of the
<PAGE> 6
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aforesaid persons; and in the case of a partnership or similar entity, the
partners are any of the aforesaid persons. For purposes of this Section 5.6(b),
a "Qualified Private Foundation" of any Class B Stockholder shall be a duly
organized charitable entity organized pursuant to Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended, provided that (i) such Class B
Stockholder has caused such entity to be established, (ii) a majority of the
initial and successor trustees, directors or managers, as the case may be, of
such entity are either Class B Stockholders and/or their Permitted Transferees,
and (iii) any shares of Class B Common Stock owned by such entity are voted by
or at the direction of such trustees, directors or managers, as the case may be.
Notwithstanding anything to the contrary set forth herein, the foregoing
automatic conversion provisions of this Section 5.6(b) shall not be applicable
to any transfer of shares of Class B Common Stock by operation of law upon
incompetence, death, dissolution or bankruptcy of any Class B Stockholder to an
executor, guardian or trustee, respectively, of such Class B Stockholder
provided that the beneficial ownership of such shares continues to be held by
one or more Permitted Transferees or Qualified Private Foundations of such Class
B Stockholder.
In addition, if at any time the aggregate number of shares of Class B
Common Stock that are owned by the members of the Founding Family and by
Permitted Transferees and Qualified Private Foundations of Class B Stockholders
is less than 20% of the aggregate number of shares of Class A Common Stock and
Class B Common Stock then outstanding, each share of Class B Common Stock then
outstanding shall automatically be converted into one fully paid and
non-assessable share of Class A Common Stock and, thereafter, the Corporation
shall not have the authority to issue any further shares of Class B Common
Stock.
(c) Class B Conversion Procedure.
(1) Each conversion of shares of Class B Common Stock
pursuant to this Section 5.6 shall be effected by the surrender of the
certificate or certificates representing the shares to be converted (hereinafter
called the "Converting Shares") at the principal office of the Corporation (or
such other office or agency of the Corporation as the Corporation may designate
by written notice to the holders of the Class B Common Stock) at any time
<PAGE> 7
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during its usual business hours, accompanied by written notice from the holder
of such Converting Shares (the "Converting Holder"), stating that such
Converting Holder desires to convert the Converting Shares, or a stated number
of the shares of Class B Common Stock represented by such certificate or
certificates, into an equal number of shares of Class A Common Stock
(hereinafter called the "Converted Shares"), as appropriate in accordance with
this Section 5.6. Such notice shall also state the name or names (with
addresses) and denominations in which the certificate or certificates for
Converted Shares are to be issued and shall include instructions for the
delivery thereof. Promptly after such surrender and the receipt of such written
notice, the Corporation shall issue and deliver in accordance with the
Converting Holder's instructions the certificate or certificates evidencing the
Converted Shares issuable upon such conversion, and the Corporation shall
deliver to the Converting Holder a certificate (which may contain such legends
as appropriate) representing any shares of Class B Common Stock which were
represented by the certificate or certificates that were delivered to the
Corporation in connection with such conversion, but which were not converted.
(2) In the event of the automatic conversion of
shares of Class B Common Stock into shares of Class A Common Stock, the holder
of such Converting Shares shall surrender the certificate or certificates
representing the Converting Shares in accordance with, and the parties to the
transfer and the Corporation shall otherwise comply with, the procedures set
forth in Section 5.6(c)(1) hereof; provided, however, that, notwithstanding that
any certificates for Converting Shares shall not have been surrendered for
cancellation, all such Converting Shares shall no longer be deemed outstanding
on and after the effective date of conversion as set forth in Section 5.6(a) or
5.6(b), as the case may be, and all rights with respect to such Converting
Shares shall forthwith on the effective date of such transfer cease and
terminate, except only the right of the holder or holders thereof to receive the
same number of shares of Converted Shares on the conversion thereof.
(3) Upon the issuance of shares in accordance with
this Section 5.6(c), such shares shall be deemed to be duly authorized, validly
issued, fully paid and non-assessable.
<PAGE> 8
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(d) Reservation. The Corporation hereby reserves and shall at
all times reserve and keep available, out of its authorized and unissued shares
of Class A Common Stock for the purpose of effecting conversions, such number of
duly authorized shares of Class A Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of Class B Common
Stock. All the shares of Class A Common Stock so issuable shall, when so issued,
be duly and validly issued, fully paid and non-assessable, and free from liens
and charges with respect to the issue. The Corporation shall take all such
action as may be necessary to assure that all such shares of Class A Common
Stock or Class B Common Stock may be so issued without violation of any
applicable law or regulation. The Corporation shall not take any action that
results in any adjustment of the conversion ratio if the total number of shares
of Class A Common Stock issued and issuable after such action upon conversion of
the shares of Class B Common Stock would exceed the total number of shares of
Class A Common Stock then authorized by the Corporation's Certificate of
Incorporation, as the same may have been amended or restated.
(e) Dividends. If a share of Class B Common Stock shall be
converted subsequent to the record date for the payment of a dividend or other
distribution on Class B Common Stock but prior to such payment, the registered
holder of such share at the close of business on such record date shall be
entitled to receive the dividend or other distribution payable on such share on
the date set for payment of such dividend or other distribution notwithstanding
the conversion thereof hereunder or the Corporation's default in payment of the
dividend on such due date.
5.7 Change in Class. No shares of one class of Common Stock
may be subdivided, consolidated, reclassified or otherwise changed unless
concurrently the shares of the other class of Common Stock are subdivided,
consolidated, reclassified or otherwise changed in the same proportion and the
same manner.
5.8 Mergers and Consolidations. In the event of a merger,
consolidation or other business combination of the Corporation with or into
another entity (whether or not the Corporation is the surviving entity), or in
the event of the
<PAGE> 9
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dissolution of the Corporation, provision shall be made so that the holders of
each class of Common Stock will be entitled to receive the same amount and form
of consideration per share as the per share consideration, if any, received by
holders of the other classes of Common Stock in such merger, consolidation,
combination or dissolution; provided, however, that in connection with any such
merger, consolidation or business combination in which shares of capital stock
are distributed, such shares may differ as to voting rights to the extent and
only to the extent that the voting rights of the Class A Common Stock and Class
B Common Stock differ as provided herein; and provided further, however, that if
such shares differ as to voting rights, the shares having superior voting rights
shall be subject to conversion provisions that are no more or less favorable to
the holders of such shares than those provided in ARTICLE FIVE hereof with
respect to the Class B Common Stock.
ARTICLE SIX
PREFERRED STOCK
Shares of Preferred Stock may be issued from time to time in
one or more series as may from time to time be determined by the Board of
Directors of the Corporation, each of said series to be distinctly designated.
All shares of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which dividends, if
any, thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights of
each such series, and the qualifications, limitations or restrictions thereof,
if any, may differ from those of any and all other series at any time
outstanding. The Board of Directors of the Corporation is hereby expressly
granted authority to fix by resolution or resolutions adopted prior to the
issuance of any shares of a particular series of Preferred Stock, the voting
powers and the designations, preferences and relative, optional and other
special rights, and the qualifications, limitations and restrictions of such
series, including, but without limiting the generality of the foregoing, the
following:
(a) The distinctive designation of, and the number of
shares of, Preferred Stock which shall constitute such
<PAGE> 10
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series, which number may be increased (except where otherwise
provided by the Board of Directors) or decreased (but not
below the number of shares thereof then outstanding) from time
to time by action of the Board of Directors;
(b) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock of
such series shall be paid, the extent of the preference or
relation, if any, of such dividends to the dividends payable
on any other class or classes, or series of the same or other
classes, of stock of the Corporation and whether such
dividends shall be cumulative or non-cumulative;
(c) The right, if any, of the holders of Preferred
Stock of such series to convert the same into, or exchange the
same for, shares of any other class or classes, or of any
series of the same or any other class or classes, of stock of
the Corporation and the terms and conditions of such
conversion or exchange;
(d) Whether or not Preferred Stock of such series
shall be subject to redemption, and the redemption price or
prices and the time or times at which, and the terms and
conditions on which, Preferred Stock of such series may be
redeemed;
(e) The rights, if any, of the holders of Preferred
Stock of such series upon the voluntary or involuntary
liquidation, merger, consolidation, distribution or sale of
assets, dissolution or winding-up of the Corporation;
(f) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for the Preferred
Stock of such series; and
(g) The voting powers, if any, of the holders of such
series of Preferred Stock, which may, without limiting the
generality of the foregoing, include the right, voting as a
series by itself or together with
<PAGE> 11
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other series of Preferred Stock or all series of Preferred
Stock as a class, to elect one or more directors of the
Corporation.
ARTICLE SEVEN
PERPETUAL EXISTENCE
The Corporation shall have perpetual existence.
ARTICLE EIGHT
BOARD OF DIRECTORS
8.1 In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors of the Corporation is expressly
authorized to adopt, amend or repeal by-laws of the Corporation, but the
stockholders may adopt additional by-laws and may amend or repeal any by-law
whether adopted by them or otherwise.
8.2 Elections of directors need not be by written ballot
except and to the extent provided in the by-laws of the Corporation.
8.3 Any director or the entire Board of Directors may be
removed, with or without cause, by the vote of the holders of shares of capital
stock then entitled to cast a majority of the votes with respect to the election
of directors.
8.4 The Corporation shall have the power to indemnify its
officers, directors, employees and agents, and such other persons as may be
designated by the Board of Directors of the Corporation or as may be provided in
its by-laws, to the full extent permitted by the laws of the State of Delaware.
The directors and officers of the Corporation shall be entitled to such rights
of indemnification and advancement of expenses, including attorneys' fees, in
the defense of any action or proceeding or threatened action or proceeding in
which a director or officer is or may be made a party as the Board of Directors
may by resolution prescribe.
<PAGE> 12
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8.5 A director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director; provided, however, that the foregoing shall not
eliminate or limit the liability of a director (a) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (b) for any
act or omission not in good faith or which involves intentional misconduct or a
knowing violation of law, (c) under Section 174 of the General Corporation Law
of the State of Delaware, or (d) for any transaction from which the director
derived an improper personal benefit. Any repeal or modification of this Article
EIGHT by the stockholders of the Corporation shall not adversely affect any
right or protection of a director of the Corporation existing at the time of
such repeal or modification with respect to acts or omissions occurring prior to
such repeal or modification.
ARTICLE NINE
SPECIAL MEETINGS OF STOCKHOLDERS
Except as otherwise required by law, special meetings of
stockholders may be called only by the Board of Directors of the Corporation
pursuant to a resolution adopted by the affirmative vote of a majority of the
entire Board of Directors or by the President of the Corporation. Except as
otherwise required by law, stockholders of the Corporation, in their capacity as
such, shall not be entitled to request or call a special meeting of the
stockholders.
ARTICLE TEN
AMENDMENTS
The Corporation reserves the right at any time and from time
to time to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation (including provisions as may hereafter be added or
inserted in this Certificate of Incorporation as authorized by the laws of the
State of Delaware) in the manner now or hereafter prescribed by law; and all
rights, preferences and privileges of whatsoever nature conferred upon
stockholders, directors or any other persons
<PAGE> 13
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whomsoever by and pursuant to this Certificate of Incorporation in its present
form or as hereafter amended are granted subject to the right reserved in this
Article TEN.
ARTICLE ELEVEN
CONSTRUCTION OF TERMS
The objects, purposes and powers specified in any clause or
paragraph of this Certificate of Incorporation shall be in no way limited or
restricted by reference to or inference from the terms of any other clause or
paragraph of this Certificate of Incorporation. The objects, purposes and powers
in each of the clauses and paragraphs of this Certificate of Incorporation shall
be regarded as independent objects, purposes and powers. The objects, purposes
and powers specified in this Certificate of Incorporation are in furtherance and
not in limitation of the objects, purposes and powers conferred by statute.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation
of CMP Media Inc. has been signed by Michael S. Leeds, its President and Chief
Executive Officer, as of the _______ day of July, 1997.
CMP MEDIA INC.
By: ____________________________
Michael S. Leeds
President and Chief Executive
Officer
<PAGE> 1
Exhibit 3.4
AMENDED AND RESTATED
BYLAWS
OF
CMP MEDIA INC.
(A DELAWARE CORPORATION)
ARTICLE I
STOCKHOLDERS
Section 1.1. CERTIFICATES REPRESENTING STOCK. Certificates representing
stock in CMP Media Inc. (the "Corporation") shall be signed by, or in the name
of, the Corporation by the President or a Vice-President and by the Secretary or
an Assistant Secretary of the Corporation. Any or all the signatures on any such
certificate may be a facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent, or registrar at the date
of issue.
Whenever the Corporation shall be authorized to issue more than one
class of stock or more than one series of any class of stock, and whenever the
Corporation shall issue any shares of its stock as partly paid stock, the
certificates representing shares of any such class or series or of any such
partly paid stock shall set forth thereon the statements prescribed by the
Delaware General Corporation Law (the "DGCL"). Any restrictions on the transfer
or registration of transfer of any shares of stock of any class or series shall
be noted conspicuously on the certificate representing such shares.
The Corporation may issue a new certificate of stock or uncertificated
shares in place of any certificate theretofore issued by it, alleged to have
been lost, stolen, or destroyed, and the Board of Directors may require the
owner of the lost, stolen, or destroyed certificate, or his legal
representative, to give the Corporation a bond sufficient to indemnify the
Corporation against any claim that may be made against it on account of the
alleged loss, theft, or destruction of any such certificate or the issuance of
any such new certificate or uncertificated shares.
Section 1.2. UNCERTIFICATED SHARES. Subject to any conditions imposed
by the DGCL, the Board of Directors of the Corporation (the "Board of Directors"
or the "Board") may provide by resolution or resolutions that some or all of any
or all classes or series of the stock of the Corporation shall be uncertificated
shares. Within a reasonable time after the issuance or transfer of any
uncertificated shares, the Corporation shall send to the registered owner
thereof any written notice prescribed by the DGCL.
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Section 1.3. FRACTIONAL SHARE INTERESTS. The Corporation may, but shall
not be required to, issue fractions of a share. If the Corporation does not
issue fractions of a share, it shall (1) arrange for the disposition of
fractional interests by those entitled thereto, (2) pay in cash the fair value
of fractions of a share as of the time when those entitled to receive such
fractions are determined, or (3) issue scrip or warrants in registered form
(either represented by a certificate or uncertificated) or bearer form
(represented by a certificate) which shall entitle the holder to receive a full
share upon the surrender of such scrip or warrants aggregating a full share. A
certificate for a fractional share or an uncertificated fractional share shall,
but scrip or warrants shall not unless otherwise provided therein, entitle the
holder to exercise voting rights, to receive dividends thereon, and to
participate in any of the assets of the Corporation in the event of liquidation.
The Board of Directors may cause scrip or warrants to be issued subject to the
conditions that they shall become void if not exchanged for certificates
representing the full shares or uncertificated full shares before a specified
date, or subject to the conditions that the shares for which scrip or warrants
are exchangeable may be sold by the Corporation and the proceeds thereof
distributed to the holders of scrip or warrants, or subject to any other
conditions which the Board of Directors may impose.
Section 1.4. STOCK TRANSFERS. Upon compliance with provisions
restricting the transfer or registration of transfer of shares of stock, if any,
transfers or registration of transfers of shares of stock of the Corporation
shall be made only on the stock ledger of the Corporation by the registered
holder thereof, or by his attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary of the Corporation, or in his
absence, an Assistant Secretary, or with a transfer agent or a registrar, if
any, and, in the case of shares represented by certificates, on surrender of the
certificate or certificates for such shares of stock properly endorsed and the
payment of all taxes due thereon.
Section 1.5. RECORD DATE FOR STOCKHOLDERS. In order that the
Corporation may determine the stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, the Board of Directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board of Directors, and
which record date shall not be more than sixty nor less than ten days before the
date of such meeting. If no record date is fixed by the Board of Directors, the
record date for determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting. In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting pursuant to
Section 1.7(J)(v) of this Article, the Board of Directors may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board of Directors. If no record date has been
fixed by the Board of Directors, the record date for determining the
stockholders entitled to consent to corporate action
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in writing without a meeting pursuant to Section 1.7(J)(v) of this Article, when
no prior action by the Board of Directors is required by the DGCL, shall be the
first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Corporation by delivery to its
registered office in the State of Delaware, its principal place of business, or
an officer or agent of the Corporation having custody of the book(s) in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed by the Board of
Directors and prior action by the Board of Directors is required by the DGCL,
the record date for determining stockholders entitled to consent to corporate
action in writing without a meeting shall be at the close of business on the day
on which the Board of Directors adopts the resolution taking such prior action.
In order that the Corporation may determine the stockholders entitled to receive
payment of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion, or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than 60 days prior to such action. If no
record date is fixed, the record date for determining stockholders for any such
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
Section 1.6. MEANING OF CERTAIN TERMS. As used herein in respect of the
right to notice of a meeting of stockholders or a waiver thereof or to
participate or vote thereat or to consent or dissent in writing in lieu of a
meeting, as the case may be, the term "share" or "shares" or "share of stock" or
"shares of stock" or "stockholder" or "stockholders" refers to an outstanding
share or shares of stock and to a holder or holders of record of outstanding
shares of stock when the Corporation is authorized to issue only one class of
shares of stock, and said reference is also intended to include any outstanding
share or shares of stock and any holder or holders of record of outstanding
shares of stock of any class upon which or upon whom the certificate of
incorporation confers such rights where there are two or more classes or series
of shares of stock or upon which or upon whom the DGCL confers such rights
notwithstanding that the certificate of incorporation may provide for more than
one class or series of shares of stock, one or more of which are limited or
denied such rights thereunder; provided, however, that no such right shall vest
in the event of an increase or a decrease in the authorized number of shares of
stock of any class or series which is otherwise denied voting rights under the
provisions of the certificate of incorporation, except as any provision of law
may otherwise require.
Section 1.7. STOCKHOLDER MEETINGS.
(A) Place of Meetings. All meetings of the stockholders of the
Corporation shall be held at the executive offices of the Corporation or at such
other places, within or without the State of Delaware, as may from time to time
be fixed by the Board of Directors.
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(B) Annual Meetings. The annual meeting of the stockholders
for the election of directors and for the transaction of such other business as
may properly come before the meeting shall be held each year at such date and
time as the Board of Directors may from time to time determine.
(C) Special Meetings. Except as otherwise required by law or
the Certificate of Incorporation of the Corporation (the "Certificate"), special
meetings of the stockholders for any purpose or purposes may be called only by
(i) the Board of Directors pursuant to a resolution adopted by the affirmative
vote of a majority of the entire Board of Directors or (ii) the President of the
Corporation. Only such business as is specified in the notice of any special
meeting of the stockholders shall come before such meeting.
(D) Notice of Meetings. Except as otherwise provided by law,
written notice of each meeting of the stockholders, whether annual or special,
shall be given, either by personal delivery or by mail, not less than 10 nor
more than 60 days before the date of the meeting to each stockholder of record
entitled to notice of the meeting. If mailed, such notice shall be deemed given
when deposited in the United States mail, postage prepaid, directed to the
stockholder at such stockholder's address as it appears on the records of the
Corporation. Each such notice shall state the place, date and hour of the
meeting, and the purpose or purposes for which the meeting is called. Notice of
any meeting of stockholders shall not be required to be given to any stockholder
who shall attend such meeting in person or by proxy without protesting, prior to
or at the commencement of the meeting, the lack of proper notice to such
stockholder, or who shall sign a written waiver of notice thereof, whether
before or after such meeting. Notice of adjournment of a meeting of stockholders
need not be given if the time and place to which it is adjourned are announced
at such meeting, unless the adjournment is for more than 30 days or, after
adjournment, a new record date is fixed for the adjourned meeting.
(E) Quorum. Except as otherwise provided by law or by the
Certificate, the holders of a majority of the votes entitled to be cast by the
stockholders entitled to vote at the meeting of stockholders, present in person
or by proxy, shall constitute a quorum for the transaction of business at any
such meeting of the stockholders; provided, however, that in the case of any
vote required by law or the Certificate to be taken by classes, the holders of a
majority of the votes entitled to be cast by the stockholders of a particular
class shall constitute a quorum for the transaction of business by such class.
When a quorum is once present it is not broken by the subsequent withdrawal of
any stockholder.
(F) Adjournments. The chairperson of the meeting or the
holders of a majority of the votes entitled to be cast by the stockholders who
are present in person or by proxy may adjourn the meeting from time to time
whether or not a quorum is present. In the event that a quorum does not exist
with respect to any vote to be taken by a particular class, the chairperson of
the meeting or the holders of a majority of the votes entitled to be cast by the
stockholders of such class who are present in person or by proxy may adjourn the
meeting with respect to the vote(s) to be taken by such class. At such adjourned
meeting at which a quorum may be present,
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any business may be transacted which might have been transacted at the meeting
as originally called.
(G) Order of Business. At each meeting of the stockholders,
the President of the Corporation or, in the absence of the President, such
person as shall be selected by the Board shall act as chairperson of the
meeting. The order of business at each such meeting shall be as determined by
the chairperson of the meeting. The chairperson of the meeting shall have the
right and authority to prescribe such rules, regulations and procedures and to
do all such acts and things as are necessary or desirable for the proper conduct
of the meeting, including, without limitation, the establishment of procedures
for the maintenance of order and safety, limitations on the time allotted to
questions or comments on the affairs of the Corporation, restrictions on entry
to such meeting after the time prescribed for the commencement thereof, and the
opening and closing of the voting polls.
(H) Notice of Stockholder Business and Nominations.
(i) Annual Meetings of Stockholders.
(A) Nominations of persons for election to the Board
of Directors of the Corporation and the proposal of business to be considered by
the stockholders may be made at an annual meeting of stockholders (1) pursuant
to the Corporation's notice of meeting, (2) by or at the direction of the Board
of Directors or (3) by any stockholder of the Corporation who was a stockholder
of record at the time of giving of notice provided for in subparagraphs (i)(B)
and (i)(C) of this Section 1.7(H).
(B) For nominations or other business to be properly
brought before an annual meeting by a stockholder pursuant to clause (3) of
subparagraph (i)(A) of this Section 1.7(H), the stockholder must have given
timely notice thereof in writing to the Secretary of the Corporation and, in the
case of business other than nominations, such other business must otherwise be a
proper matter for stockholder action. To be timely, a stockholder's notice shall
be delivered to the Secretary of the Corporation at the principal executive
offices of the Corporation not later than the close of business on the 70th day
nor earlier than the close of business on the 90th day prior to the first
anniversary of the preceding year's annual meeting; provided, however, that in
the event that the date of the annual meeting is more than twenty (20) days
before or more than seventy (70) days after such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the close of
business on the 90th day prior to such annual meeting and not later than the
close of business on the later of the 70th day prior to such annual meeting or
the 10th day following the day on which public announcement of the date of such
meeting is first made by the Corporation. In no event shall the public
announcement of an adjournment of an annual meeting commence a new time period
for the giving of a stockholder's notice as described above. Such stockholder's
notice shall set forth (1) as to each person whom the stockholder proposes to
nominate for election or re-election as a director all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors,
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or is otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule
14a-11 thereunder (including such person's written consent to being named in the
proxy statement as a nominee and to serving as a director if elected); (2) as to
any other business that the stockholder proposes to bring before the meeting, a
brief description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such stockholder and the beneficial owner, if any, on whose
behalf the proposal is made; and (3) as to the stockholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or proposal is made
(a) the name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner, (b) the class and number of
shares of the Corporation which are owned beneficially and of record by such
stockholder and such beneficial owner, and (c) whether the proponent intends or
is part of a group which intends to solicit proxies from other stockholders in
support of such proposal or nomination.
(C) Notwithstanding anything in the second sentence
of subparagraph (i)(B) of this Section 1.7(H) to the contrary, in the event that
the number of directors to be elected to the Board of Directors of the
Corporation is increased and there is no public announcement by the Corporation
naming all of the nominees for director or specifying the size of the increased
Board of Directors at least eighty (80) days prior to the first anniversary of
the preceding year's annual meeting, a stockholder's notice required by this
Section 1.7(H) shall also be considered timely, but only with respect to
nominees for any new positions created by such increase, if it shall be
delivered to the Secretary of the Corporation at the principal executive offices
of the Corporation not later than the close of business on the 10th day
following the day on which such public announcement is first made by the
Corporation.
(ii) Special Meetings of Stockholders. Only such business
shall be conducted at a special meeting of stockholders as shall have been
brought before the meeting pursuant to the Corporation's notice of meeting.
Nominations of persons for election to the Board of Directors may be made at a
special meeting of stockholders at which directors are to be elected pursuant to
the Corporation's notice of meeting (a) by or at the direction of the Board of
Directors or (b) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any stockholder of the
Corporation who is a stockholder of record at the time of giving notice, who
shall be entitled to vote at the meeting and who complies with the notice
procedures set forth in this Section 1.7(H). In the event the Corporation calls
a special meeting of stockholders for the purpose of electing one or more
directors to the Board of Directors, any such stockholder may nominate a person
or persons (as the case may be) for election to such position(s) as specified in
the Corporation's notice of meeting, if the stockholder's notice (of the
substance required by paragraph (i)(B) of this Section 1.7(H)) shall be
delivered to the Secretary of the Corporation at the principal executive offices
of the Corporation not earlier than the close of business on the 90th day prior
to such special meeting and not later than the close of business on the later of
the 70th day prior to such special meeting, or the 10th day following the day on
which public announcement is first made of the date of the special meeting and
of the nominees proposed by the Board of Directors to be elected at such
meeting. In no event shall the public
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announcement of an adjournment of a special meeting commence a new time period
for the giving of a stockholder's notice as described above.
(iii) General.
(A) Only such persons who are nominated in accordance
with the procedures set forth in this Section 1.7(H) shall be eligible to serve
as directors and only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance with
the procedures set forth in this Section 1.7(H). Except as otherwise provided by
law, the chairperson of the meeting shall have the power and duty to determine
whether a nomination or any business proposed to be brought before the meeting
was made or proposed, as the case may be, in accordance with the procedures set
forth in this Section 1.7(H) and, if any proposed nomination or business is not
in compliance with this Section 1.7(H), to declare that such defective
nomination shall be disregarded or that such proposed business shall not be
transacted.
(B) For purposes of this Section 1.7(H), "public
announcement" shall mean disclosure in a press release reported by the Dow Jones
News Service, Associated Press or comparable national news service or in a
document publicly filed by the Corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(C) Notwithstanding the foregoing provisions of this
Section 1.7(H), a stockholder shall also comply with all applicable requirements
of the Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this Section 1.7(H). Nothing in this Section 1.7(H) shall
be deemed to affect any rights (a) of stockholders to request inclusion of
proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the
Exchange Act or (b) of the holders of any series of preferred stock to elect
directors under specified circumstances.
(I) List of Stockholders. It shall be the duty of the
Secretary or other officer who has charge of the stock ledger to prepare and
make, at least 10 days before each meeting of the stockholders, a complete list
of the stockholders entitled to vote thereat, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in such stockholder's name. Such list shall be produced and kept available at
the times and places required by law.
(J) Voting. (i) Except as otherwise provided by law or by the
Certificate, each stockholder of record of any class or series of capital stock
of the Corporation shall be entitled at each meeting of stockholders to such
number of votes for each share of such stock as may be fixed in the Certificate
or (in the case of preferred stock) in the resolution or resolutions adopted by
the Board providing for the issuance of such stock, registered in such
stockholder's name on the books of the Corporation:
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(1) on the date fixed pursuant to Section 1.5 of
Article I of these Bylaws as the record date for the
determination of stockholders entitled to notice of and to
vote at such meeting; or
(2) if no such record date shall have been so fixed,
then at the close of business on the day next preceding the
day on which notice of such meeting is given, or, if the
notice is waived, at the close of business on the day next
preceding the day on which the meeting is held.
(ii) Each stockholder entitled to vote at any meeting
of stockholders may authorize another person or persons to act for such
stockholder by proxy. Any such proxy shall be delivered to the Secretary at or
prior to the time designated for holding such meeting. No such proxy shall be
voted or acted upon after three years from its date, unless the proxy provides
for a longer period.
(iii) At each meeting of the stockholders, all
corporate actions to be taken by vote of the stockholders (except as otherwise
required by law and except as otherwise provided in the Certificate or these
Bylaws) shall be authorized by a majority of the votes cast affirmatively or
negatively by the stockholders, and where a separate vote by class is required
by law or by the Certificate, a majority of the votes cast affirmatively or
negatively by the stockholders of such class shall be the act of such class.
(iv) Unless required by law or determined by the
chairperson of the meeting to be advisable, the vote on any matter, including
the election of directors, need not be by written ballot. In the case of a vote
by written ballot, each ballot shall be signed by the stockholder voting, or by
such stockholder's proxy.
(v) Any action required or permitted to be taken at
any meeting of stockholders may, except as otherwise required by law or the
Certificate, be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of record of the issued and outstanding capital stock of
the Corporation having a majority of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted, and the writing or writings are filed with the permanent
records of the Corporation. Prompt notice of the taking of corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
(K) Inspectors. The directors, in advance of any meeting, may,
but need not, appoint one or more inspectors of election to act at the meeting
or any adjournment thereof. If an inspector or inspectors are not appointed, the
person presiding at the meeting may, but need not, appoint one or more
inspectors. In case any person who may be appointed as an inspector fails to
appear or act, the vacancy may be filled by appointment made by the directors in
advance of the meeting or at the meeting by the person presiding thereat. Each
inspector, if any, before
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entering upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspectors at such meeting with strict
impartiality and according to the best of his ability. The inspectors, if any,
shall determine the number of shares of stock outstanding and the voting power
of each, the shares of stock represented at the meeting, the existence of a
quorum, and the validity and effect of proxies, and shall receive votes,
ballots, or consents, hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes, ballots, or
consents, determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the person
presiding at the meeting, the inspector or inspectors, if any, shall make a
report in writing of any challenge, question or matter determined by him or them
and execute a certificate of any fact found by him or them.
ARTICLE II
DIRECTORS
Section 2.1. FUNCTIONS AND DEFINITION. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of Directors
of the Corporation. The Board of Directors shall have the authority to fix the
compensation of the members thereof; provided, however, that no compensation
shall be paid to salaried directors for their services, but the Board may by
resolution authorize the payment to non-salaried directors of an annual fee for
serving as directors and/or a fixed fee for each meeting attended, or such other
compensation as may be determined by the Board. Nothing herein contained shall
be construed to preclude any director from serving the Corporation as an
officer, an employee or in any other capacity and receiving compensation
therefor. The use of the phrase "whole board" herein refers to the total number
of directors which the Corporation would have if there were no vacancies.
Section 2.2. QUALIFICATIONS AND NUMBER. A director need not be a
stockholder, a citizen of the United States, or a resident of the State of
Delaware. The initial Board of Directors shall consist of five persons.
Thereafter the number of directors constituting the whole board shall be at
least one. Subject to the foregoing limitation and except for the first Board of
Directors, such number may be increased or decreased from time to time by action
of the stockholders or of the directors.
Section 2.3. ELECTION AND TERM. Any director may resign at any time
upon written notice to the Corporation. Thereafter, directors who are elected at
an annual meeting of stockholders, and directors who are elected in the interim
to fill vacancies and newly created directorships, shall hold office until the
next annual meeting of stockholders and until their successors are elected and
qualified or until their earlier resignation or removal. Except as the DGCL may
otherwise require, in the interim between annual meetings of stockholders or
special meetings of stockholders called for the election of directors and/or for
the removal of one or more directors and for the filling of any vacancy in that
connection, newly created directorships and any vacancies resulting from the
removal of directors for cause or without cause, may be
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filled by the vote of a majority of the remaining directors then in office,
although less than a quorum, by the sole remaining director or by vote of the
holders of the Corporation's capital stock representing at least a majority of
the combined voting power of the Corporation's voting capital stock.
Section 2.4. MEETINGS.
(A) Time. Meetings of the Board shall be held at such time as
the Board shall fix, except that the first meeting of a newly elected Board
shall be held as soon after its election as the directors may conveniently
assemble.
(B) Place. Meetings shall be held at such place within or
without the State of Delaware as shall be fixed by the Board.
(C) Call. No call shall be required for regular meetings of
the Board for which the time and place have been fixed. Special meetings of the
Board may be called by or at the direction of the President or of a majority of
the directors in office.
(D) Notice or Actual or Constructive Waiver. No notice shall
be required for regular meetings of the Board for which the time and place have
been fixed. Written, oral, or any other mode of notice of the time and place
shall be given for special meetings of the Board in sufficient time for the
convenient assembly of the directors thereat. Notice need not be given to any
director or to any member of a committee of directors who submits a written
waiver of notice signed by him before or after the time stated therein.
Attendance of any such person at a meeting shall constitute a waiver of notice
of such meeting, except when he attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
directors need be specified in any written waiver of notice.
(E) Quorum and Action. A majority of the whole Board shall
constitute a quorum except when a vacancy or vacancies prevents such majority,
whereupon a majority of the directors in office shall constitute a quorum,
provided, that such majority shall constitute at least one-third of the whole
Board. A majority of the directors present, whether or not a quorum is present,
may adjourn a meeting to another time and place. Except as herein otherwise
provided, and except as otherwise provided by the DGCL, the vote of the majority
of the directors present at a meeting at which a quorum is present shall be the
act of the Board. The quorum and voting provisions herein stated shall not be
construed as conflicting with any provisions of the DGCL and these Bylaws which
govern a meeting of directors held to fill vacancies and newly created
directorships in the Board or action of disinterested directors.
Any member or members of the Board of Directors, or of any committee
designated by the Board, may participate in a meeting of the Board, or any such
committee, as the case may be,
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by means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other.
(F) Chairperson of the Meeting. The Co-Chairpersons of the
Board, if any, and if present and acting, shall preside at all meetings;
provided, however, that the power to preside at any such meeting may be
delegated to any other director by the Co-Chairpersons. Otherwise any other
director chosen by the Board shall preside.
Section 2.5. REMOVAL OF DIRECTORS. Except as may otherwise be provided
by the DGCL, any director or the entire Board of Directors may be removed, with
or without cause, by the holders of a majority of the combined voting power of
the Corporation's voting capital stock then entitled to vote at an election of
directors.
Section 2.6. COMMITTEES. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one or more committees, each
committee to consist of one or more of the directors of the Corporation. The
Board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. In the absence or disqualification of any member of any such
committee or committees, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board, shall have and
may exercise the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation with the exception of
any authority the delegation of which is prohibited by Section 141 of the DGCL,
and may authorize the seal of the Corporation to be affixed to all papers which
may require it.
Section 2.8. WRITTEN ACTION. Any action required or permitted to be
taken at any meeting of the Board of Directors or any committee thereof may be
taken without a meeting if all members of the Board or committee, as the case
may be, consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the Board or committee.
ARTICLE III
OFFICERS
Section 3.1. NUMBER. The officers of the Corporation shall consist of a
President and a Secretary and, if deemed necessary, expedient, or desirable by
the Board of Directors, one or more Chairpersons or Co-Chairpersons of the
Board, a Vice-Chairperson of the Board, one or more other Executive Vice
Presidents, Senior Vice Presidents or Vice-Presidents, one or more other
Presidents or Vice Presidents of units or divisions of the Corporation's
business, a Chief Financial Officer, a Treasurer, one or more Assistant
Secretaries, one or more Assistant Treasurers, and such other officers with such
titles as the resolution of the Board of Directors
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choosing them shall designate. Except as may otherwise be provided in the
resolution of the Board of Directors choosing him, no officer other than the
Chairperson(s), Co-Chairpersons or Vice-Chairperson of the Board, if any, need
be a director. Any number of offices may be held by the same person, as the
directors may determine.
Section 3.2. TERM. Unless otherwise provided in the resolution choosing
him, each officer shall be chosen for a term which shall continue until the
meeting of the Board of Directors following the next annual meeting of
stockholders and until his successor shall have been chosen and qualified.
Section 3.3. POWERS AND DUTIES. All officers of the Corporation shall
have such authority and perform such duties in the management and operation of
the Corporation as shall be prescribed in the resolutions of the Board of
Directors designating and choosing such officers and prescribing their authority
and duties, and shall have such additional authority and duties as are incident
to their office except to the extent that such resolutions may be inconsistent
therewith. The Secretary or an Assistant Secretary of the Corporation shall
record all of the proceedings of all meetings and actions in writing of
stockholders, directors, and committees of directors, and shall exercise such
additional authority and perform such additional duties as the Board shall
assign to him.
Section 3.4. REMOVAL. Any officer may be removed, with or without
cause, by the Board of Directors.
Section 3.5. RESIGNATION. Any officer may resign at any time by giving
notice to the Board or the President. Any such resignation shall take effect at
the date of receipt of such notice or at any date specified therein; and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 3.6. VACANCIES. Any vacancy in any office may be filled by the
Board of Directors.
Section 3.7. REMUNERATION. The Board, or an authorized committee
thereof, shall have the right to fix the compensation of all executive officers
of the Corporation and such other officers as it may determine. No officer shall
be disqualified from receiving a salary by reason of also being a director of
the Corporation.
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ARTICLE IV
INDEMNIFICATION
Section 4.1. DAMAGES AND EXPENSES.
(A) Actions, Suits or Proceedings Other Than by or in the
Right of the Corporation. The Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was or has agreed to become a director or
officer of the Corporation, or is or was serving or has agreed to serve at the
request of the Corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, or by reason of any
action alleged to have been taken or omitted in such capacity. In addition,
pursuant to a determination by the Board of Directors, the Corporation may, but
shall not be required to, indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that he is or was or has agreed to become an employee or agent of the
Corporation, or is or was serving or has agreed to serve at the request of the
Corporation as an employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or by reason of any action alleged to have
been taken or omitted in such capacity. The indemnification shall be against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person or on his behalf in
connection with such action, suit or proceeding and any appeal therefrom, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation and, in the case of an employee
or agent, if he acted in a manner that he reasonably believed to be within the
scope of his employment or agency, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not meet the standards of
conduct set forth in this Section 4.1(A). Notwithstanding any other provision of
this Section 4.1(A), except as otherwise provided in Section 4.1(C), the
Corporation shall be required to indemnify a person in connection with a
proceeding (or part thereof) commenced by such person only if the commencement
of such proceeding (or part thereof) by such person was authorized by the Board
of Directors of the Corporation.
(B) Actions or Suits by or in the Right of the Corporation.
The Corporation shall indemnify any person who was or is party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the Corporation to procure a judgment in its favor by reason of
the fact that he is or was or has agreed to become a director or officer of the
Corporation, or is or was serving or has agreed to serve at the request of the
Corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, or by reason of any action alleged to have
been taken or omitted in such
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<PAGE> 14
capacity. In addition, pursuant to a determination by the Board of Directors,
the Corporation may, but shall not be required to, indemnify any person who was
or is party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was or has agreed to
become an employee or agent of the Corporation, or is or was serving or has
agreed to serve at the request of the Corporation as an employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, or
by reason of any action alleged to have been taken or omitted in such capacity.
The indemnification shall be against expenses (including attorneys' fees)
actually and reasonably incurred by such person or on his behalf in connection
with the defense or settlement of such action or suit and any appeal therefrom,
if he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation and, in the case of an employee
or agent, if he acted in a manner that he reasonably believed to be within the
scope of his employment or agency, except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable for gross negligence or misconduct in the performance of
his duty to the Corporation unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of such liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such costs, charges and expenses which the
Court of Chancery or such other court shall deem proper.
(C) Indemnification for Expenses of Successful Party.
Notwithstanding the other provisions of this Bylaw Article IV, to the extent
that a director or officer of the Corporation has been successful on the merits
or otherwise, including, without limitation, the dismissal of an action without
prejudice, in defense of any action, suit or proceeding referred to in Sections
4.1(A) and (B) of this Bylaw Article IV, or in the defense of any claim, issue
or matter therein, he shall be indemnified against all expenses (including
attorneys' fees) actually and reasonably incurred by him or on his behalf in
connection therewith.
(D) Determination of Right to Indemnification. Any
indemnification under Sections 4.1(A) and (B) of this Bylaw Article IV (unless
ordered by a court) shall be paid by the Corporation unless a determination is
made (1) by the Board of Directors by a majority vote of the directors who are
not parties to such action, suit or proceeding, even though less than a quorum,
or (2) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (3) by the stockholders, that
indemnification of the director, officer, employee or agent is not proper in the
circumstances because he has not met the applicable standards of conduct set
forth in Sections 4.1(A) and (B) of this Bylaw Article IV.
(E) Advance of Expenses. Expenses (including attorneys' fees)
incurred by a director or officer (and, if authorized by the Board of Directors,
by an employee or agent) referred to in Sections 4.1(A) and (B) of this Bylaw
Article IV in defending a civil or criminal action, suit or proceeding
(including investigations by any government agency and all costs, charges and
expenses incurred in preparing for any threatened action, suit or proceeding)
shall be
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<PAGE> 15
paid by the Corporation in advance of the final disposition of such action, suit
or proceeding; provided, however, that the payment of such expenses incurred by
a director or officer in his capacity as a director or officer in advance of the
final disposition of such action, suit or proceeding shall be made only upon
receipt by the Corporation of an undertaking by or on behalf of the director or
officer to repay all amounts so advanced in the event that it shall ultimately
be determined that such director or officer is not entitled to be indemnified by
the Corporation as authorized in this Bylaw Article IV. No security shall be
required for such undertaking and such undertaking shall be accepted without
reference to the recipient's financial ability to make repayment. The repayment
of such expenses incurred by other employees and agents of the Corporation which
are paid by the Corporation in advance of the final disposition of such action,
suit or proceeding as permitted by this Section 4.1(E) may be required upon such
terms and conditions, if any, as the Board of Directors deems appropriate, which
may include, without limitation, receipt by the Corporation of an undertaking by
or on behalf of an employee or agent to repay all amounts so advanced in the
event that it shall ultimately be determined that such employee or agent is not
entitled to be indemnified by the Corporation as authorized in this Bylaw
Article IV. The Board of Directors may, in the manner set forth above, and
subject to the approval of such director, officer, employee or agent of the
Corporation, authorize the Corporation's counsel to represent such person, in
any action, suit or proceeding, whether or not the Corporation is a party to
such action, suit or proceeding.
(F) Procedure for Indemnification. Any indemnification under
Sections 4.1(A), (B) or (C) or advance of expenses under Section 4.1(E) of this
Bylaw Article IV shall be made promptly, and in any event within 60 days, upon
the written request of the director or officer (or, if applicable, the employee
or agent) directed to the Secretary of the Corporation. The right to
indemnification or advances as granted by this Bylaw Article IV shall be
enforceable by the director or officer in any court of competent jurisdiction if
the Corporation denies such request, in whole or in part, or if no disposition
thereof is made within 60 days. Such person's expenses incurred in connection
with successfully establishing his right to indemnification or advances, in
whole or in part, in any such action shall also be indemnified by the
Corporation. It shall be a defense to any such action (other than an action
brought to enforce a claim for the advance of expenses under Section 4.1(E) of
this Bylaw Article IV where the required undertaking, if any, has been received
by the Corporation) that the claimant has not met the standard of conduct set
forth in Sections (A) or (B) of this Bylaw Article IV, but the burden of proving
that such standard of conduct has not been met shall be on the Corporation.
Neither the failure of the Corporation (including its Board of Directors, its
independent legal counsel, and its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
proper in the circumstances because he has met the applicable standard of
conduct set forth in Sections 4.1(A) and (B) of this Bylaw Article IV, nor the
fact that there has been an actual determination by the Corporation (including
its Board of Directors, its independent legal counsel, or its stockholders) that
the claimant has not met such applicable standard of conduct, shall be a defense
to the action or create a presumption that the claimant has not met the
applicable standard of conduct.
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<PAGE> 16
(G) Other Rights; Continuation of Right to Indemnification.
The indemnification provided by this Bylaw Article IV shall not be deemed
exclusive of any other rights to which a person seeking indemnification may be
entitled under any law (common or statutory), agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding office or while employed by
or acting as agent for the Corporation, and shall continue as to a person who
has ceased to be a director or officer, employee or agent and shall inure to the
benefit of the estate, heirs, executors and administrators of such person. All
rights to indemnification under this Bylaw Article IV shall be deemed to be a
contract between the Corporation and each director or officer of the Corporation
who serves or served in such capacity at any time while this Bylaw Article IV is
in effect. Unless otherwise provided by law, no amendment or repeal of this
Bylaw Article IV or of any relevant provisions of the Delaware DGCL or any other
applicable laws shall adversely affect or deny to any director or officer any
rights to indemnification which such person may have, or change or release any
obligations of the Corporation, under this Bylaw Article IV with respect to any
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement which arise out of an action, suit or proceeding based in whole or
substantial part on any act or failure to act, actual or alleged, which takes
place before or while this Bylaw Article IV is in effect. The provisions of this
Section 4.1(G) shall apply to any such action, suit or proceeding whenever
commenced, including any such action, suit or proceeding commenced after any
amendment or repeal of this Bylaw Article IV (but only to the extent that it
relates to a cause of action that arose prior to such amendment or repeal).
Section 4.2. DEFINITIONS. For purposes of this Bylaw Article IV:
(A) the "Corporation" shall include any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers and employees
or agents, so that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this Bylaw Article IV
with respect to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence had continued;
(B) "other enterprises" shall include employee benefit plans,
including but not limited to any employee benefit plan of the Corporation;
(C) "serving at the request of the Corporation" shall include
any service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, a director, officer, employee, or
agent of the Corporation with respect to an employee benefit plan, its
participants, or beneficiaries, including acting as a fiduciary thereof;
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<PAGE> 17
(D) "fines" shall include any excise taxes assessed on a
person with respect to an employee benefit plan;
(E) A person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in Sections
4.1(A) and (B) of this Bylaw Article IV;
(F) Service as a partner, trustee or member of management or
similar committee of a partnership or joint venture, or as a director, officer,
employee or agent of a corporation which is a partner, trustee or joint
venturer, shall be considered service as a director, officer, employee or agent
of the partnership, joint venture, trust or other enterprise.
Section 4.3. SAVINGS CLAUSE. If this Bylaw Article IV or any portion
hereof shall be invalidated on any ground by a court of competent jurisdiction,
then the Corporation shall nevertheless indemnify each director, officer,
employee and agent of the Corporation as to expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement with respect to any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, including an action by or in the right of the Corporation, to the
full extent permitted by any applicable portion of this Bylaw Article IV that
shall not have been invalidated and to the full extent permitted by applicable
law.
Section 4.4. INSURANCE. The Corporation may purchase and maintain
insurance on behalf of any person who is or has agreed to become a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against him and incurred by him or on his behalf in any such
capacity, or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under the
provisions of Bylaw Article IV, provided that such insurance is available on
acceptable terms as determined by a vote of a majority of the entire Board of
Directors.
ARTICLE V
CORPORATE SEAL
The corporate seal shall be in such form as the Board of Directors
shall prescribe.
ARTICLE VI
FISCAL YEAR
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The fiscal year of the Corporation shall be fixed, and shall be subject
to change, by the Board of Directors.
ARTICLE VII
CONTROL OVER BYLAWS
Subject to the provisions of the Certificate and the provisions of the
DGCL, the power to amend, alter, or repeal these Bylaws and to adopt new Bylaws
may be exercised by the Board of Directors or by the stockholders.
18
<PAGE> 1
EXHIBIT 4.2
[CMP LOGO]
INCORPORATED UNDER THE LAWS CLASS A COMMON STOCK
OF THE STATE OF DELAWARE CUSIP 125891 10 1
SEE REVERSE FOR CERTAIN DEFINITIONS
CMP MEDIA INC.
This certifies that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF CLASS A COMMON STOCK, PAR
VALUE $0.01 PER SHARE, OF
CMP MEDIA INC.
(herein referred to as the "Corporation"), transferable on the books of the
Corporation by the holder hereof, in person or by duly authorized attorney,
upon surrender of this Certificate properly endorsed. This Certificate and
the shares of Class A Common Stock represented hereby are issued and shall
be subject to all of the terms, conditions and limitations of the Certificate
of Incorporation and Bylaws of the Corporation, including all amendments
heretofore or hereafter made to such Certificate of Incorporation or Bylaws,
to all of which reference is made hereby.
This Certificate is not valid unless countersigned by the transfer agent
and registered by the registrar of the Corporation.
IN WITNESS WHEREOF, the Corporation has caused facsimile signatures of its
duly authorized officers and its facsimile seal to be hereunto affixed.
Dated:
Attest:
/s/Robert D. Marafioti /s/ Michael S. Leeds
- ------------------------ --------------------
Secretary [Corporate seal of President and Chief
CMP Media Inc.] Executive Officer
Countersigned and Registered:
AMERICAN STOCK TRANSFER & TRUST COMPANY
TRANSFER AGENT AND REGISTRAR
by /s/
---------------------
AUTHORIZED OFFICER
<PAGE> 2
CMP MEDIA INC.
THE CORPORATION WILL FURNISH TO ANY STOCKHOLDER UPON REQUEST AND WITHOUT
CHARGE, A FULL STATEMENT OF THE DESIGNATION, RELATIVE RIGHTS, PREFERENCES AND
LIMITATIONS OF THE SHARES OF EACH CLASS OF STOCK AUTHORIZED TO BE ISSUED AND
OF EACH SERIES OF PREFERRED STOCK SO FAR AS THE SAME HAVE BEEN FIXED, AND THE
AUTHORITY OF THE BOARD TO DESIGNATE AND FIX THE RELATIVE RIGHTS, PREFERENCES
AND LIMITATIONS OF OTHER SERIES OF PREFERRED STOCK. SUCH REQUESTS MAY BE MADE
TO THE CORPORATION OR TO THE TRANSFER AGENT.
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
UNIF GIFT MIN ACT--
TEN COM -- as tenants in common Custodian
TEN ENT -- as tenants by the entireties ------------- --------
JT WROS -- as joint tenants with right (Cust) (Minor)
of survivorship and not as under Uniform Gifts to Minors Act
tenants in common
---------------------------------
(State)
Additional abbreviations may also be used though not in the above list.
For value received, hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OR ASSIGNEE
- ------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code,
of assignee)
______________________________________________________________________________
_________________________________________________________________________Shares
of the Class A Common Stock represented by the within Certificate, and do
hereby irrevocably constitute and appoint ____________________________________
Attorney, to transfer the said Class A Common Stock on the books of the within-
named Corporation with full power of substitution in the premises.
Dated,
------------------------------ --------------------------------------
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
Certificate, in every particular,
without alteration or enlargement, or
any change whatever.
SIGNATURE GUARANTEED:
BY:
---------------------------------
NOTICE: THE SIGNATURE(S) MUST BE
GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND
CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM), PURSUANT TO SEC
RULE 17AD-15.
<PAGE> 1
EXHIBIT 4.3
FORM OF
1997 LEEDS FAMILY STOCKHOLDERS' AGREEMENT
THIS AGREEMENT ("Agreement"), made and entered into as of the 30th day
of June, 1997, by and among CMP MEDIA INC., a Delaware corporation (hereinafter
referred to as the "Company"), with principal offices at 600 Community Drive,
Manhasset, New York 11030; and GERARD G. LEEDS ("Gerry"), LILO J. LEEDS
("Lilo"), MICHAEL S. LEEDS ("Michael"), RICHARD A. LEEDS ("Richard"), DANIEL
H. LEEDS ("Dan"), GREG JOBIN- LEEDS ("Greg") and JENNIFER LEEDS ("Jennifer")
(sometimes hereinafter referred to individually as a "Stockholder" and
collectively as the "Stockholders", and Michael, Richard, Dan, Greg and
Jennifer sometimes hereinafter referred to individually as a "Sibling
Stockholder" and collectively as the "Sibling Stockholders").
PREAMBLE
One of the guiding objectives of Gerry and Lilo, co-founders of the
Company, is to establish an arrangement which will foster harmony among the
Stockholders, permit them to realize their business and charitable objectives,
and ensure continuity of control and management of the Company in a manner
which permits the Company to grow and prosper, recognizing the obligations and
responsibilities of the Stockholders and the Company to the customers and
employees of the Company, the communities in which the Company operates, and
all its stockholders. It is the parties' hope and expectation that the voting
arrangements, the provisions affecting the nomination and selection of the
Company's Board of Directors (the "Board") and the provisions relating to the
transfer of the Company's Common Stock as set forth in this Agreement will
provide a framework which permits the realization of these objectives in a fair
and equitable manner and consistent with the historic values and principles of
the Company. There may well be situations which arise in the future, the
solution of which is not specifically detailed or provided for in this
Agreement. In these situations, it is the parties' hope and expectation that
these matters will be resolved with affection, goodwill, respect and
sensitivity, so as to achieve and secure to each of the parties hereto the
benefits contemplated by this Agreement.
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<PAGE> 2
W I T N E S S E T H:
WHEREAS, the Company currently has three (3) classes of authorized
Common Stock (the "Common Stock") consisting of two (2) classes of voting
Common Stock, namely Class A Common Stock ("Class A Common Stock") and Class B
Common Stock ("Class B Common Stock"), and one (1) class of non-voting Common
Stock, namely Class C Common Stock ("Class C Common Stock"); and
WHEREAS, the rights of the holders of shares of Class A Common Stock
and the holders of shares of Class B Common Stock are identical, except that
the holders of the Class A Common Stock are entitled to one (1) vote per share
on all matters submitted to a vote of stockholders, the holders of the Class B
Common Stock are entitled to ten (10) votes per share on all matters submitted
to a vote of stockholders, and the Class B Common Stock, may in circumstances
set forth in the Company's Certificate of Incorporation, as amended, and/or
restated, or in this Agreement be converted into or exchanged for Class A
Common Stock on a share-for-share basis; and
WHEREAS, the holders of the Class C Common Stock are not entitled to
vote; and
WHEREAS, the Stockholders entered into a Shareholders' Agreement as of
the 30th day of June 1991 with respect to their shares of common stock of CMP
Publications, Inc. and affiliated entities, the predecessor-in-interest to the
Company (the "1991 Leeds Family Shareholders' Agreement"); and
WHEREAS, on February 28, 1997 each of the Stockholders received shares
of Class C Common Stock as a stock dividend on their shares of Class A Common
Stock and Class B Common Stock, which shares of Class C Common Stock (the
"Class C Shares") may, under certain circumstances, be exchanged for shares of
the class of Common Stock upon which they were declared as a dividend; and
WHEREAS, the Stockholders entered into a Stockholders' Agreement as of
the 28th day of February 1997 with respect to the Class C Shares and the shares
of Common Stock to be received upon the exchange of the Class C Shares (the
"1997 Stockholders' Agreement"); and
WHEREAS, the Company has determined to initiate a public offering of
certain shares of the Class A Common Stock (an "IPO") and, to that end, has
filed with the Securities and Exchange Commission (the "SEC") a Registration
Statement under the Securities Act of 1933 (the "1933 Act"); and
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<PAGE> 3
WHEREAS, prior to the date on which the SEC declares the Company's
Registration Statement effective (the "Effective Date"), each Class C Share
which was received by a Stockholder as a stock dividend with respect to a share
of Class A Common Stock will be exchanged for a single share of Class A Common
Stock, and each Class C Share which was received by a Stockholder as a stock
dividend with respect to a share of Class B Common Stock will be exchanged for
a single share of Class B Common Stock; and
WHEREAS, the Stockholders and certain trusts for the benefit of
certain of their issue currently own all of the issued and outstanding shares
of the Class B Common Stock (the "Class B Shares") and substantially all of the
issued and outstanding shares of the Class A Common Stock and the Class C
Common Stock, as set forth in Exhibit A annexed hereto; and
WHEREAS, the parties deem it in the best interest of the Company and
each of them to agree to certain provisions governing the future transfer,
exchange and voting of shares of the Common Stock by the Stockholders and by
any and all other persons and entities which may hereafter hold any of the
Class B Shares from time to time (the Stockholders and such other persons and
entities, collectively, the "Class B Stockholders"); and
WHEREAS, the parties desire that, as of the Effective Date of the IPO,
the terms, provisions, conditions and restrictions set forth in the 1991 Leeds
Family Shareholders' Agreement and the 1997 Stockholders' Agreement be
superseded and replaced in their entirety by, and that all of the Class B
Shares be subject to, the terms, conditions, provisions and restrictions of
this Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by each of the
parties, the parties hereto do hereby covenant, agree, represent and warrant as
follows:
ARTICLE I
TRANSFER AND SALE OF CLASS B SHARES
TO PERMITTED TRANSFEREES AND QUALIFIED PRIVATE FOUNDATIONS
Section 1.1. General Restriction on Transfer. No Stockholder
shall, voluntarily or involuntarily, by operation of law or otherwise,
transfer, sell, mortgage, pledge, hypothecate, assign as security, grant or
permit to exist or continue a security interest in, or in any way transfer by
gift, will, trust or intestate succession, any of his or her Class B Shares or
any
3
<PAGE> 4
interest therein, or attempt or purport to do any of the aforementioned acts,
except to a Permitted Transferee or Qualified Private Foundation as defined in
Section 1.2, or except as otherwise specifically provided for in this
Agreement. Any attempt by a Stockholder to do any of the aforementioned acts
or otherwise to alienate or dispose of any Class B Shares, except as provided
for and in accordance with this Agreement, shall be null and void.
Section 1.2. Permitted Transferees and Qualified Private
Foundations.
(a) "Permitted Transferee" shall mean the spouse of any
Stockholder, any issue, parent or sibling of such Stockholder, any issue of
such sibling, any Stockholder's former spouse who is the parent of such
Stockholder's issue or any entity (e.g., a trust (including a charitable
trust), corporation or partnership) in which such Stockholder and/or any
Permitted Transferees either individually or collectively have the majority
voting interest and of which, in the case of a trust or similar entity,
substantially all the beneficiaries are any of the aforesaid persons, including
a charity; in the case of a corporation or similar entity, substantially all
the stockholders are any of the aforesaid persons, including a charity; and in
the case of a partnership or similar entity, substantially all the partners are
any of the aforesaid persons, including a charity.
(b) "Qualified Private Foundation" of any person shall mean and
include a duly organized charitable entity organized pursuant to Section
501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code"), provided that (i) such person has caused such entity to be
established, (ii) a majority of the initial and successor trustees, directors
or managers, as the case may be, of such entity are either Stockholders and/or
their Permitted Transferees, and (iii) any Class B Shares owned by such entity
are voted by or at the direction of such trustees, directors, or managers, as
the case may be.
(c) Before a Stockholder transfers any Class B Shares to a
Permitted Transferee or Qualified Private Foundation, and before any Permitted
Transferee or Qualified Private Foundation transfers any Class B Shares to a
Permitted Transferee or Qualified Private Foundation, such transferring
Stockholder, Permitted Transferee or Qualified Private Foundation, as the case
may be, shall give the Company written notice of such intended transfer. Any
receiving Permitted Transferee or Qualified Private Foundation, shall, to the
extent of the Class B Shares transferred, succeed to all the rights and
obligations of the transferor under this Agreement and shall receive and hold
the transferred Class B Shares subject to, and shall become bound by, all the
terms and conditions hereof; provided that, as a condition precedent to a
Permitted Transferee or Qualified Private Foundation exercising any rights
under this Agreement and to the Company's obligation to change its records to
reflect the record ownership of such Class B Shares in the name of such
Permitted Transferee
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or Qualified Private Foundation, such Permitted Transferee or Qualified Private
Foundation, if not already a party to this Agreement, shall agree in writing to
be bound by all the terms and conditions hereof and shall execute such
documents and instruments, including confidentiality and non-competition
agreements, as may reasonably be required by legal counsel to the Company.
Thereafter, there shall be no further transfer of such Class B Shares except by
such Permitted Transferee or Qualified Private Foundation to another Permitted
Transferee or Qualified Private Foundation, in accordance with the terms and
conditions of this Agreement.
(d) No Class B Stockholder may sell in a private transaction any of
his, her or its Class B Shares to any Class B Stockholder who is not a member
of the seller's Family (as hereinafter defined) without first offering to sell
such Class B Shares to all of the Class B Stockholders upon the same terms and
conditions. For the purpose of such offer, a Sibling Stockholder, each member
of his or her Family who is a Class B Stockholder and each Qualified Private
Foundation of such Sibling Stockholder and/or of any member of his or her
Family who is a Class B Stockholder (collectively, a "Sibling Stockholder's
Group") shall be aggregated, and each Sibling Stockholder's Group shall be
entitled, as a group, to purchase the same number of such Class B Shares as
each other Sibling Stockholder's Group, or as the purchasing parties may
otherwise unanimously agree; provided, however, that if a Sibling Stockholder's
Group has not purchased all of the Class B Shares to which it was entitled
under any prior offer or offers made by a Class B Stockholder pursuant to this
paragraph, or if a Sibling Stockholder's Group has previously sold or
transferred any of its Class B Shares to persons or entities that are not
members of such Sibling Stockholder's Group, then any such Sibling Stockholder
Groups shall be entitled in any subsequent offering by Class B Stockholders
hereunder to purchase all or such greater percentage of the offered Class B
Shares so as to permit such Sibling Stockholder's Group to achieve parity with
the other Sibling Stockholder's Group, based on the total number of Class B
Shares then held by each Sibling Stockholder's Group. For all purposes of this
Agreement, "Family" shall mean a Sibling Stockholder, the spouse and any issue
of such Sibling Stockholder and any entity in which such Sibling Stockholder
and/or his or her spouse and/or any of his or her issue, either individually or
collectively, have the majority voting interest and of which, in the case of a
trust or similar entity, substantially all the beneficiaries are any of the
aforesaid persons, including a charity; in the case of a corporation or similar
entity, substantially all the stockholders are any of the aforesaid persons,
including a charity; and in the case of a partnership or similar entity,
substantially all the partners are any of the aforesaid persons, including a
charity.
(e) The parties agree and understand that the provisions of
subparagraph (d) above do not require a Sibling Stockholder, his or her Family,
or Qualified Private Foundation to
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first offer for sale any of the Class B Shares which they then own to any other
Stockholder, his or her Family, or Qualified Private Foundation, if such
persons or entities determine to (i) convert their Class B Shares into shares
of Class A Common Stock and sell such shares to persons or entities through a
registration statement or customary brokerage transactions, or (ii) gift,
devise or bequeath their Class B Shares to a Permitted Transferee, Qualified
Private Foundation or (after conversion to shares of Class A Common Stock) a
public charity.
(f) Subject to the other provisions of this Agreement, Gerry and Lilo
shall be entitled to transfer their shares of the Common Stock to their
respective Qualified Private Foundations to the maximum extent permitted under
the Internal Revenue Code. To the extent that, after such transfers, other
Class B Stockholders may be permitted under the Internal Revenue Code to
transfer additional shares of the Common Stock to their Qualified Private
Foundations, each Sibling Stockholder's Family shall be entitled, as a group,
to transfer the same number of shares of the Common Stock to Qualified Private
Foundations as each other Sibling Stockholder's Family, unless the transferring
parties otherwise unanimously agree.
ARTICLE II
OTHER TRANSFERS AND SALES OF SHARES
IN PRIVATE TRANSACTIONS
Section 2.1. Right of First Offer.
(a) In the event that any Class B Stockholder wishes to sell,
transfer or dispose of shares of his, her or its Class B Shares in a private
transaction other than to a Permitted Transferee or Qualified Private
Foundation as provided in Article I, such Class B Stockholder (the "Selling
Stockholder") shall first give all the other Class B Stockholders other than
Gerry and Lilo (the "Remaining Stockholders") a notice setting forth an offer
to sell such Class B Shares to the Remaining Stockholders and specifying the
purchase price therefor and any other terms or conditions of such sale. As
among the Remaining Stockholders, each Sibling Stockholder's Group shall be
entitled, as a group, to purchase the same number of such Class B Shares as
each other Sibling Shareholder's Group or as the Remaining Stockholders may
otherwise unanimously agree. The Remaining Stockholders shall promptly
determine among themselves, in accordance with the preceding sentence, which of
them shall exercise their rights to purchase such shares and in what proportion
and, within forty-five (45) days after such notice from the Selling Stockholder
offering to sell them such shares is given, shall give the Selling Stockholder
notice of which of the
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Remaining Stockholders will purchase the offered shares, the number of shares
to be purchased by each and the place, date and time for the closing of the
purchase and sale of such shares, which date shall be not more than ninety (90)
days after the date the notice from the Selling Stockholder was duly given.
(b) If, within forty-five (45) days after such notice from the
Selling Stockholder is given, the Remaining Stockholders have not given the
Selling Stockholder notice that some or all of them will purchase all of the
Class B Shares offered by the Selling Stockholder, the Selling Stockholder
shall give the Company notice setting forth an offer to sell, at the same
purchase price and upon the same terms and conditions, such portion of the
Class B Shares as the Remaining Stockholders have not agreed to purchase. The
Board shall promptly consider such offer and, within fifteen (15) days after
such notice from the Selling Stockholder is given, shall give the Selling
Stockholder notice of the extent, if any, to which the Company shall accept
such offer and the place, date and time for the closing of the purchase and
sale of such Class B Shares, which date shall be not more than thirty (30) days
after the date the notice from the Selling Stockholder was duly given. If the
Selling Stockholder is then a member of the Board, the Selling Stockholder
shall not be entitled to vote on such matter.
(c) If the Remaining Stockholders and Company do not agree to
purchase any or all of the shares offered by the Selling Stockholder, then and
in that event the Selling Stockholder shall have ninety (90) days to effect a
bona fide sale of such shares to a third party purchaser (a "Third Party
Purchaser"), subject to the provisions of Section 2.3, Section 2.4, and Section
2.7 at a price and upon terms no more favorable to such Third Party Purchaser
than those offered to the Remaining Stockholders and Company. In the event
the Selling Stockholder fails to sell shares hereunder to a Third Party
Purchaser within such 90-day period, such shares shall again become subject to
the terms and conditions of this Section 2.1.
Section 2.2. Right of First Refusal. In the event that a Class B
Stockholder at any time receives a bona fide offer from a Third Party Purchaser
to purchase shares of the Common Stock, and desires to accept such offer, then
and in that event such Class B Stockholder shall promptly give the Remaining
Stockholders and Company a notice containing a true and complete copy of such
offer and detailing all the material terms thereof, written and unwritten,
including the identity of such Third Party Purchaser and the identity of all
persons who, to the best knowledge of such Class B Stockholder, directly or
indirectly control such Third Party Purchaser, together with any related
letters of intent, contracts for sale and exhibits thereto. If, within
forty-five (45) days after all such required documentation has been given to
the Remaining Stockholders and the Company, the Remaining
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Stockholders and Company have not given such Class B Stockholder notice that it
and/or they will purchase such shares upon substantially the same terms, then
and in that event such Class B Stockholder shall have ninety (90) days to
effect a bona fide sale of his, her or its shares to such Third Party Purchaser
in accordance with such offer. In connection with such third-party offer, the
Class B Stockholders shall have the first right to acquire the offered shares
in accordance with the procedures set forth in Section 2.1, with the Company
having the right to acquire any of such shares of Common Stock not purchased by
the Class B Stockholders. In the event such Class B Stockholder fails to sell
such shares to such Third Party Purchaser within such 90-day period, such
shares shall again become subject to the terms and conditions of this Section
2.2.
Section 2.3. Sales to Competitors. Notwithstanding anything to the
contrary herein contained, no Class B Stockholder shall sell, transfer or
convey any shares of the Common Stock to a competitor of the Company in a
private transaction without first obtaining the prior consent of Class B
Stockholders who then hold eighty percent (80%) or more of the voting power of
the Class B Shares (including for the purposes of such computation the Class B
Shares which the selling Class B Stockholder, his or her Family and their
Qualified Private Foundations are entitled to vote) and who include at least
one (1) Sibling Stockholder who is a full-time senior executive employee of the
Company (an "Employee Stockholder"), if there are at least two Employee
Stockholders serving in such capacity at such time.
Section 2.4. Sales to Non-Competitors. Notwithstanding anything to
the contrary herein contained, no Class B Stockholder shall sell, transfer or
convey shares of Common Stock to a non-competitor of the Company in a private
transaction without first obtaining the prior consent of Class B Stockholders
who then hold sixty-five percent (65%) or more of the voting power of the Class
B Shares (excluding for the purposes of such computation the Class B Shares
which the selling Class B Stockholder, his or her Family and their Qualified
Private Foundations are entitled to vote); provided, however, that even without
such consent (but subject to the provisions of Section 2.1, Section 2.2 and
Section 2.7) any Class B Stockholder, his or her Family and their Qualified
Private Foundations collectively may, during any twelve (12) month period, sell
to non-competitors of the Company in private transactions shares of Common
Stock having a fair market value, determined as of their date of sale, of up to
one million dollars ($1,000,000).
Section 2.5. Mergers and Other Reorganizations. In the event that
certain of the Class B Stockholders determine to dispose of all or a portion of
their shares of Common Stock in connection with a sale, tender, merger,
consolidation or similar type of transaction, with the result that all of the
Class B Stockholders as a group will no longer own securities representing more
than 50% of the voting power of either the Company or its successor in
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interest, then and in that event, each Class B Stockholder shall have the
right, but not the obligation, to dispose of a proportionate number of his, her
or its shares of Common Stock in any such transaction on the same terms and
conditions as the selling Class B Stockholders have determined to dispose of
their Common Stock.
Section 2.6. Conversion of Class B Shares to Class A Shares. If any
shares to be sold or transferred by a Class B Stockholder under this Article II
(other than to a Permitted Transferee or Qualified Private Foundation) are
Class B Shares, then prior to such sale or transfer such Class B Stockholder
shall take all such steps as may be necessary, appropriate or reasonably
required by legal counsel to the Company to convert such Class B Shares into,
and exchange them for, shares of Class A Common Stock ("Class A Shares"). In
addition, at such time as the total number of shares of Class A Common Stock
and Class B Common Stock owned by the Stockholders, their Permitted Transferees
and Qualified Private Foundations is less than twenty percent (20%) of the
aggregate number of shares of Class A Common Stock and Class B Common Stock
then outstanding, all of the outstanding shares of Class B Common Stock
automatically will be converted into shares of Class A Common Stock.
Section 2.7. Limitations on Number of Shares Sold Per Year.
Notwithstanding anything to the contrary herein contained, the right of any
Class B Stockholder to sell shares of Common Stock under this Article II shall
be subject to the following provisions:
(a) Gerry and Lilo shall have the right to sell or transfer at any
time as many of their shares of Common Stock as they may deem appropriate.
(b) Each Sibling Stockholder's Group shall collectively have the
right to sell or transfer in any calendar year such aggregate number of Class B
Shares (and/or Class A Shares converted from Class B Shares) as shall equal ten
percent (10%) of the number of Class B Shares owned by such Sibling
Stockholder's Group on the effective date of this Agreement. Such right shall
be cumulative, so that any of such Class B Shares and/or Class A Shares not
sold by a Sibling Stockholder's Group in one year may be sold in subsequent
years together with such number of Class B Shares and/or Class A Shares as such
Sibling Stockholder's Group would in any case be entitled to sell in such
subsequent years. Notwithstanding the foregoing, the total number of such
Class B Shares and/or Class A Shares that a Sibling Stockholder's Group may
sell in any single calendar year shall in no event exceed twenty percent (20%)
of the number of Class B Shares owned by such Sibling Stockholder's Group on
the effective date of this Agreement. The percentage limitations set forth in
this paragraph (b) shall not be waived or modified except with the prior
consent of Class B Stockholders then holding sixty-five percent (65%) or more
of the voting power of
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the Class B Shares (excluding for the purposes of such computation the Class B
Shares which such Sibling Stockholder's Group is entitled to vote).
ARTICLE III
TRANSFER AND SALE OF CLASS A SHARES
ON THE PUBLIC MARKET
Any Class B Stockholder who converts any of his, her or its Class B
Shares into Class A Shares as permitted by the Company's Certificate of
Incorporation, as amended or restated from time to time, may sell, transfer or
convey such Class A Shares on the NASDAQ National Market or any other national
exchange on which the Class A Common Stock is listed for trading, subject to
the terms, conditions, provisions and restrictions set forth in this Article
III.
Section 3.1. Limitations on Number of Shares Sold Per Year. All
sales on a public market of Class A Shares that have been converted from Class
B Shares shall be aggregated with sales of Class B Shares for each year, and
the limitations set forth in Section 2.7 shall apply to all such sales
collectively.
Section 3.2. Registration Rights. Commencing with the calendar year
1998, the Class B Stockholders shall have the right to require the Company to
register their Class A Shares (after conversion from Class B Shares) for sale
in a public offering under the 1933 Act (an "Offering"), subject to and in
accordance with the following provisions:
(a) Class B Stockholders, as provided in paragraph (c) below, may give
the Company a notice requesting that it register a specified number of their
converted Class A Shares, provided that (i) none of the Class B Stockholders
requesting such registration (the "Requesting Stockholders") or any member of
his or her Family is then engaged in competition with the Company as provided
in Section 6.1 and (ii) if a Requesting Stockholder is anyone other than Gerry
or Lilo, the Sibling Stockholder's Group of which such Requesting Stockholder
is a member owns directly or indirectly fifty percent (50%) or more of the
number of Class B Shares which such Sibling Stockholder's Group owned on the
effective date of this Agreement. The Company, upon receipt of such notice (a
"Requesting Notice"), shall promptly give all the other Class B Stockholders
notice thereof, which notice shall disclose the identity of the Requesting
Stockholders and the number of Class A Shares that they have requested the
Company to register. Such other Class B Stockholders shall have fifteen (15)
days after such notice is given by the Company in which to give the Company
notice that they wish to participate in such registration and to sell Class A
Shares in the Offering. Upon the expiration of such 15-day period, the Company
shall determine
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if (x) the total number of Class A Shares which the Class B Stockholders
collectively wish to sell in the Offering is equal to at least twenty-five
percent (25%) of the number of Class B Shares which a Sibling Stockholder's
Group owned on the date of this Agreement or (y) the fair market value of all
such Class A Shares was not less than twenty million dollars ($20,000,000.00)
on the date the Requesting Notice was given. If either of the preceding
conditions is satisfied, the Company shall promptly take such steps as may be
reasonable and necessary to proceed to a registration of such Class A Shares.
If neither of the preceding conditions is satisfied, the Company shall so
notify all Class B Stockholders and shall have no further obligation to proceed
with a registration of Class A Shares pursuant to such Requesting Notice.
(b) In connection with a registration of Class A Shares pursuant to
paragraph (a) above, the Company shall use commercially reasonable efforts (i)
to prepare and file with the SEC as soon as reasonably practicable a
registration statement with respect to such Class A Shares (a "Registration
Statement") and to cause such Registration Statement to promptly become and
remain effective for a period of at least one-hundred twenty (120) days (or
such shorter period during which the Class B Stockholders shall have sold all
the Class A Shares which were registered); (ii) to register and qualify such
Class A Shares under such applicable state securities laws as the selling Class
B Stockholders may reasonably request for the distribution of such Class A
Shares; and (iii) to take all such other actions as are reasonable and
necessary to comply with the requirements of the 1933 Act and the regulations
thereunder. The date on which such Registration Statement is to be filed and
the number of Class A Shares of each Class B Stockholder which are to be
included in such Registration Statement shall be determined by the Company
after consulting with such managing underwriter or underwriters of the Offering
as the Company selects. If the Company is advised in writing by the principal
managing underwriter(s) of the Offering that the number of Class A Shares to be
offered by the Class B Stockholders is greater than the number of Class A
Shares which can be offered without adversely affecting the Offering, then the
number of Class A Shares of each selling Class B Stockholder to be registered
and included in the Offering shall be reduced proportionately or in such other
manner as may be unanimously agreed upon by the selling Class B Stockholders.
If the Company is advised in writing by the principal managing underwriter(s)
of the Offering that the number of Class A Shares to be offered by the Class B
Stockholders is less than the number of Class A Shares which can be offered
without adversely affecting the Offering, then the Class B Stockholders shall
have the right to increase the number of Class A Shares to be included in such
Registration Statement proportionately or in such other manner as may be
unanimously agreed to by the selling Class B Stockholders, and if in the
opinion of such underwriter(s) additional Class A Shares may be offered, the
Company shall have the right to register and include in the Offering on its own
behalf such number of Class A Shares as such
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underwriters advise can be offered without adversely affecting the Offering of
the Class B Stockholders.
(c) The Company shall bear all the costs and expenses incurred in
connection with three (3) registrations and Offerings made under paragraph (a)
above within every consecutive ten (10) year period commencing with the
calendar year 1998 (including all registration, filing, qualification,
printer's, legal and accounting fees), except for underwriting commissions and
discounts relating to the Class A Shares sold by Class B Stockholders in such
Offerings, which commissions and discounts shall be the responsibility of such
Class B Stockholders. Gerry, Lilo and their respective Qualified Private
Foundations and Representatives shall be entitled collectively to initiate one
(1) of such three registrations; Michael, Dan and their respective Families,
Qualified Private Foundations and Representatives shall be entitled
collectively to initiate one (1) of such three registrations; and Richard,
Greg, Jennifer and their respective Families, Qualified Private Foundations and
Representatives shall be entitled collectively to initiate one (1) of such
three registrations. If Gerry, Lilo and their respective Qualified Private
Foundations and Representatives determine not to initiate one (1) of such three
(3) registrations, then and in that event such registration right shall first
be deemed assigned to Richard, Greg, Jennifer and their respective Families,
Qualified Private Foundations and Representatives, and if such persons and
entities determine not to exercise such registration right, such registration
right shall be deemed assigned to Michael, Dan and their respective Families,
Qualified Private Foundations and Representatives. Further, the Company shall,
subject to the conditions set forth in paragraphs (a) and (b) above, undertake
more than three (3) such registrations and offerings within any such ten (10)
year period, if Class B Stockholders then owning sixty-five percent (65%) or
more of the voting power of the Class B Shares request such registrations and
offerings, provided, however, that the Class B Stockholders making such request
and/or participating in any such registrations and offerings shall bear all the
costs and expenses incurred in connection with such additional registrations
and offerings of such shares, and such costs and expenses shall be borne by the
Class B Stockholders in proportion to the number of shares of Common Stock
being offered by each of them, or as they otherwise unanimously determine.
(d) Notwithstanding anything to the contrary contained herein, the
Company shall not be required to file a Registration Statement under paragraph
(a) above within twelve (12) months after the consummation of an Offering
initiated by the Company, nor more than one (1) Registration Statement within
any two-year period, unless the request for registration is made by a Deceased
Stockholder's Representative, in which case the Company shall use commercially
reasonable efforts to register a sufficient number of Class A Shares of such
Deceased Stockholder to (i) enable his or her estate to pay any and all federal
estate and state
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succession taxes, together with interest thereon, as well as any and all
administrative costs and expenses, resulting from the inclusion (directly or
indirectly) of shares of the Common Stock in such Deceased Stockholder's
estate, as reasonably estimated and certified to the Company in writing by such
Deceased Stockholder's Representative, and (ii) provide such Deceased
Stockholder's estate reasonable liquidity; provided, however, that the Company
shall not be required to register, or to use its commercially reasonable
efforts to register, such Class A Shares of such Deceased Stockholder if Class
B Stockholders then holding sixty-five percent (65%) or more of the voting
power of the Class B Shares (excluding for the purposes of such computation any
Class B Shares which such Deceased Stockholder's estate, Family and their
Qualified Private Foundations are entitled to vote) determine in good faith
that the Deceased Stockholder's estate has sufficient other marketable assets
to pay such estate and succession taxes, interest and administrative costs and
expenses, and provide reasonable liquidity for such Deceased Stockholder's
estate after payment of such aforementioned taxes and expenses, or that the
failure to effect such registration would not create an undue hardship on the
Deceased Stockholder's estate by reason of the estate's ability to avail itself
of the resale provisions of Rule 144 under the 1933 Act ("Rule 144") or
otherwise.
(e) In the event that the Company determines at any time while this
Agreement is in effect to register any Class A Shares for its own or others'
accounts in connection with an Offering (and not in connection with employee
benefit plans or a transaction under Rule 145 of the 1933 Act), the Company
shall promptly give the Class B Stockholders notice of such determination.
Upon written request of one or more of the Class B Stockholders made within
fifteen (15) days after such notice is given, the Company will use commercially
reasonable efforts to register and include in the Offering all of the Class A
Shares which such Class B Stockholders (the "Piggy-Back Stockholders") have
requested to be included. If the Company is advised in writing by the
principal managing underwriter(s) of the Offering that the number of Class A
Shares that the Piggy-Back Stockholders have requested to be included in the
Offering is greater than the number of Class A Shares that can be included
without adversely affecting the Offering, then the number of Class A Shares of
each Piggy-Back Stockholder to be registered and included in such Offering
shall be reduced proportionately or in such other manner as may be unanimously
agreed upon by all the Piggy-Back Stockholders. The Company shall bear all the
costs and expenses incurred in connection with any registrations and Offerings
made under this paragraph (e) (including all registration, filing,
qualification, printer's, legal and accounting fees), except for underwriting
commissions and discounts relating to the Class A Shares sold by the Piggy-Back
Stockholders in such Offerings, which commissions and discounts shall be the
responsibility of the Piggy-Back Stockholders.
(f) In connection with each Offering made pursuant to this Section,
the Company and
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the Class B Stockholders selling Class A Shares in such Offering shall enter
into written agreements with the managing underwriter(s) of such Offering in
such form and containing such provisions as are customary in the securities
business for such an arrangement between underwriters and companies of the size
and investment stature of the Company, including indemnification and
contribution provisions.
(g) The Company shall not be obligated to register Class A Shares
(after conversion from Class B Shares) held by Class B Stockholders at any time
when the resale provisions of Rule 144 are available to such Class B
Stockholders without limitation as to volume.
Section 3.3. Rule 144 Sales. Each of the Class B Stockholders shall
consult with each other and keep each other and the Company informed with
respect to any and all proposed sales and dispositions of his, her or its
Common Stock in order that each Class B Stockholder will be able to comply with
the provisions of Rule 144 and dispose of shares of Common Stock under the Rule
144 exemption in a fair and equitable manner to the effect that each such Class
B Stockholder will be able to sell from time to time in the public market a
portion of his, her or its Common Stock.
ARTICLE IV
ELECTION OF DIRECTORS; MATERIAL ACTIONS
Section 4.1. Election of Directors
(a) Each of the parties to this Agreement shall vote all of the
Class B Shares which such party is, or hereafter becomes, entitled to vote at
any meeting of the stockholders of the Company, or shall consent in writing to
action taken without a meeting of stockholders, so as to implement the
following provisions with respect to the election of the Company's Directors.
(i) Each of Gerry and Lilo, if he or she so desires,
shall be elected as a Director of the Company until the annual meeting of the
Company's stockholders held in the year 2002.
(ii) Each Employee Stockholder, if he or she so desires,
shall be elected as a Director of the Company for as long as he or she remains
an Employee Stockholder, subject to the provisions of paragraph (b) below.
(iii) Each Sibling Stockholder who is not a full-time
senior executive employee of the Company or any of its affiliates (a
"Non-Employee Stockholder") may, if he or she so desires, be elected a Director
of the Company commencing at the annual meeting of the Company's stockholders
held in the year 2002, subject to the provisions of paragraph (b) below. Until
such annual meeting of the Company's stockholders, the Non-
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Employee Stockholders shall be elected as Directors on a rotating basis in
accordance with the following schedule, except as provided below or as
otherwise determined by a vote of Class B Stockholders then holding sixty
percent (60%) or more of the voting power of the Class B Shares:
(A) Jennifer, if she so desires, shall be elected a
Director at the annual meeting of the Company's stockholders held in the year
1998;
(B) Greg, if he so desires, shall be elected to
succeed Jennifer as a Director at the annual meeting of the Company's
stockholders held in the year 1999;
(C) Richard, if he so desires, shall be elected to
succeed Greg as a Director at the annual meeting of the Company's stockholders
held in the year 2000; and
(D) Jennifer, if she so desires, shall be elected to
succeed Richard as a Director at the annual meeting of the Company's
stockholders held in the year 2001.
(iv) At the annual meeting of stockholders of the Company
held in the year 2002, Gerry and Lilo shall not be re-elected as Directors of
the Company, and each of the Non-Employee Stockholders shall be elected as a
Director, unless such Non-Employee Stockholder has given the other Stockholders
and the Company notice of his or her desire not to be elected as a Director at
such annual meeting of the Company's stockholders not less than ninety (90)
calendar days in advance of the date of the Company's proxy statement released
to stockholders in connection with the previous year's annual meeting of
stockholders.
(v) If any Stockholder does not desire to serve as a Director
for any year which, under this paragraph (a), he or she would otherwise be
elected a Director, such Stockholder shall give the Company and the other
Stockholders notice thereof not less than ninety (90) calendar days in advance
of the date of the Company's proxy statement released to stockholders in
connection with the previous year's annual meeting of stockholders.
(vi) Since the parties intend that commencing in the year
2002 all five (5) of the Sibling Stockholders will be eligible to serve as
Directors, if prior to the year 2002 a Sibling Stockholder ceases to be an
Employee Stockholder or Gerry or Lilo declines to serve as a Director, then and
in such circumstances more than one Non-Employee Stockholder shall be eligible
to serve as a Director in each such year prior to 2002. If a Sibling
Stockholder declines or is otherwise not eligible to serve as a Director for
any year of the rotation schedule set forth in subparagraph (iii) of this
paragraph (a), the Sibling Stockholder scheduled to succeed such declining or
ineligible Sibling Stockholder shall instead serve as a Director in such year,
and the rotation schedule shall advance by one (1) year for all Sibling
Stockholders. If an Employee Stockholder ceases to serve as a full-time senior
executive employee of the Company, such Employee Stockholder shall thereafter
participate as the last person in such rotation schedule of the Non-Employee
Stockholders.
(vii) Any Sibling Stockholder who is participating on a
rotation schedule may, if he or she desires, attend any and all meetings of the
Board and receive any and all material
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made available to the Board during a period when he or she is not serving as a
Director, unless such Sibling Stockholders' presence or receipt of material
would be violative of law or deemed by the Board to be inappropriate under the
circumstances.
(b) For a Sibling Stockholder to be eligible to serve as a
Director, each of the following conditions must be satisfied each time a
Sibling Stockholder is elected or reelected to such position, and as long as he
or she serves in such capacity.
(i) Such Sibling Stockholder's Group owns fifty percent
(50%) or more of the number of the Class B Shares which such Sibling
Stockholder's Group owned on the date of this Agreement, unless such condition
is waived by Class B Stockholders then holding sixty percent (60%) or more of
the voting power of the Class B Shares (excluding for the purposes of such
computation the shares of Class B Common Stock which such Sibling Stockholder's
Group are entitled to vote).
(ii) Neither such Sibling Stockholder nor his or her
spouse, nor any of his or her issue who share the same home as such Sibling
Stockholder, is engaged in competition with the Company within the meaning of
Section 6.1, unless such condition is waived as provided for in Section 6.2.
(iii) Such Sibling Stockholder is not otherwise legally
prohibited from serving in such capacity.
(c) If an eligible Sibling Stockholder decides not to serve as a
Director, or if a Sibling Stockholder dies or becomes incapacitated or is
otherwise unable to serve as a Director, then such Sibling Stockholder or his
or her Representative, as the case may be, may designate his or her spouse or
one of his or her surviving issue as a successor Director. If no such
designation is made, such Sibling Stockholder's spouse, if then qualified,
shall be entitled to serve as a Director, or if such spouse is not qualified,
or if qualified subsequently dies, resigns, or becomes incapacitated, then such
spouse shall be succeeded by such Sibling Stockholder's issue who are then age
twenty-seven (27) or older; and provided further that if more than one issue of
such Sibling Stockholder is then age twenty-seven (27) or older, or
subsequently becomes age twenty-seven (27), then each such issue shall be
entitled to serve as a Director on a rotating basis for terms of two (2)
consecutive years each, beginning with the eldest and continuing in descending
order of age. An above-described person shall be eligible to serve as a
successor Director in such Sibling Stockholder's place and stead, and each of
the Class B Stockholders shall vote all of his, her or its Class B Shares so as
to elect such person as a successor Director, provided that the following
conditions are satisfied each time such person is elected as a Director and as
long as such person serves in such capacity:
(i) such Sibling Stockholder's Group (and his or her
estate if such Sibling Stockholder is deceased) owns fifty percent (50%) or
more of the number of the Class B Shares which such Sibling Stockholder's Group
owned on the date of this Agreement, unless
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such condition is waived by Class B Stockholders then holding sixty percent
(60%) or more of the voting power of the Class B Shares, excluding for the
purposes of such computation the Class B Shares which such Sibling
Stockholder's Group (and his or her estate if such Sibling Stockholder is
deceased) is entitled to vote.
(ii) neither such successor Director nor his or her
spouse, nor any of his or her issue who share the same home as such successor
Director, is engaged in competition with the Company within the meaning of
Section 6.1, unless such condition is waived as provided for in Section 6.2.
(iii) such successor Director has attained age 27;
(iv) such successor Director is not otherwise legally
prohibited from serving in such capacity; and
(v) the election of such successor Director has received
the prior consent of Class B Stockholders then holding sixty percent (60%) or
more of the voting power of the Class B Shares, excluding for the purposes of
such computation the Class B Shares which such Sibling Stockholder's Group (and
his or her estate if such Sibling Stockholder is deceased) is entitled to vote.
(d) The Class B Stockholders may recommend candidates for
nomination as Directors who are neither Stockholders nor spouses or issue of
Stockholders ("Independent Directors") and, provided that the nomination of any
such candidate has received the prior consent of Class B Stockholders who then
hold sixty-six percent (66%) or more of the voting power of the Class B Shares
and who include at least one (1) Employee Stockholder, if there is an Employee
Stockholder at such time. Each Class B Stockholder shall use his or her best
efforts to cause the Board to nominate such candidate, and each of the Class B
Stockholders, their Families and Qualified Private Foundations shall vote all
of his, her or its Class B Shares so as to elect such candidate as a Director.
Each Class B Stockholder shall use his or her best efforts to cause the Board
to nominate such number of Independent Directors as is necessary to permit the
Class A Common Stock to comply with the requirements of the NASDAQ National
Market or such other national exchange as the Board may from time to time
determine, or as may otherwise be required by law. Nothing herein is intended
or shall be construed to limit or infringe upon the power of the Board or a
duly constituted committee thereof to nominate candidates for election as
Directors.
Section 4.2. Material Actions.
(a) A material action ("Material Action") shall mean and include
any action, matter or transaction which requires stockholder approval under the
laws of the state of incorporation of the Company and which is similar or
related to the following types of actions, matters and transactions:
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(i) a reorganization or recapitalization of the Company;
(ii) the sale, merger, or liquidation of the Company or
the sale of substantially all its assets;
(iii) the sale or issuance of securities (either debt or
equity) by the Company, either in a private placement or public offering;
(iv) the adoption of any Company compensation plan
required to be submitted to security holder action; and
(v) the amendment or the restatement of the Company's
Certificate of Incorporation.
(b) No Class B Stockholder shall vote any of his, her or its Class
B Shares in favor of a Material Action at any meeting of the stockholders of
the Company, or consent in writing to the taking of any Material Action without
a meeting of stockholders, unless Class B Stockholders who then hold sixty-five
percent (65%) or more of the voting power of the Class B Shares, and who
include at least one Employee Stockholder, if there are at least two Employee
Stockholders at such time, and one Non-Employee Stockholder (if there be such
Non-Employee Stockholder) who owns, or whose Sibling Stockholders' Group
collectively owns at least twenty-five percent (25%) of the number of Class B
Shares that such Sibling Stockholders' Group owned on the date of this
Agreement, shall have given their prior consent to such Material Action.
(c) With respect to non-material actions, matters or transactions
which require a vote of the stockholders of the Company, including the
selection of the Company's independent accountants, each person or entity
owning shares of Common Stock shall be free to vote his, her or its shares as
they deem appropriate in the circumstances.
ARTICLE V
INTRA-FAMILY VOTING OF SHARES
Section 5.1. Procedure for Family Voting.
With respect to any action, matter or transaction which, under this Agreement,
cannot be taken without the prior consent or determination of Class B
Stockholders then holding a specified percentage of the voting power of the
Class B Shares, such Class B Stockholders shall take a vote on such action,
matter or transaction (a "Family Vote") in accordance with the following
procedure, unless such Class B Stockholders unanimously otherwise agree:
(a) Any Class B Stockholder entitled to vote any Class B Shares may
initiate a Family Vote by giving a notice to each of the other Class B
Stockholders entitled to vote Class B Shares specifying the action, matter or
transaction desired to be taken, the provision of this
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Agreement pursuant to which the prior consent or determination of such Class B
Stockholders is sought and the date by which the Class B Stockholders shall
vote their shares (the "Response Date"). The Response Date shall not be less
than thirty (30) days or more than forty-five (45) days after the initiating
notice is given, unless a shorter time for response is reasonable under the
circumstances by virtue of the matter, action or transaction to be voted upon.
(b) Each of the Class B Stockholders entitled to vote may cast his,
her or its vote on such action by giving a notice to all the other Class B
Stockholders entitled to vote, indicating whether such Class B Stockholder
votes for or against such action or abstains from voting on such action. The
failure of a Class B Stockholder to give such a notice on or before the
Response Date shall be deemed an abstention by such Class B Stockholder from
voting on such action. If a Class B Stockholder timely votes on any action,
matter or transaction, such vote shall be counted even if, as a result of
faulty technical transmission or other cause beyond the reasonable control of
such Class B Stockholder, a minority of the other Class B Stockholders did not
duly receive notice of such vote.
(c) In computing whether the requisite percentage of the voting power
of the Class B Shares has been secured with respect to any action, matter or
transaction requiring the prior consent or determination of Class B
Stockholders then holding such percentage, only votes cast for or against such
action shall be counted. If a Class B Stockholder entitled to vote Class B
Shares abstains from voting or otherwise fails to vote them, such Class B
Shares shall be excluded from the computation of the requisite percentage as if
such Class B Shares were not issued and outstanding.
Section 5.2. Votes Per Share. For the purpose of all Family Votes,
each Class B Stockholder entitled to vote shall have ten (10) votes per Class B
Share except as follows:
(a) If and when the members of any Sibling Stockholder's Group
collectively acquire voting power over a greater number of Class B Shares than
the number of Class B Shares held by such Sibling Stockholder's Group on the
effective date of this Agreement, then such excess number of Class B Shares
shall be excluded from the computation of voting power in all Family Votes as
if such Class B Shares were not issued and outstanding, and the members of such
Sibling Stockholder's Group shall not vote such excess number of Class B Shares
at any meeting of the stockholders of the Company or in any written consent of
such stockholders. The intent of this provision is to preserve, on an
equitable basis, the equality of voting rights among the Sibling Stockholders,
and it shall apply to Class B Shares acquired by Class B Stockholders in the
future by any means whatsoever (whether by purchase, gift, inheritance or
otherwise). This limitation on voting rights shall not apply to
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Class B Shares acquired by a Sibling Stockholder's Group at a time when such
Sibling Stockholder's Group holds voting power over fewer shares than such
Sibling Stockholder's Group held on the effective date of this Agreement
(whether by reason of sale, gift, testamentary disposition or otherwise).
(b) The following provisions shall apply in the event a Stockholder
competes with the Company:
(i) In the event that a Stockholder, the spouse of such
Stockholder or any of their issue sharing the same home as such Stockholder
competes with the Company within the meaning of Section 6.1 and provided that
the exceptions set forth in Section 6.2 are not applicable to the person
competing (the "Competitor"), then and in that event none of such persons or
their Qualified Private Foundations shall be entitled to participate in any
Family Vote and any Class B Shares that they would otherwise be entitled to
vote shall be excluded from the computation of voting power in all Family Votes
as if such Class B Shares were not issued and outstanding, until such time as
none of such persons is any longer competing with the Company.
(ii) If the issue of a Stockholder does not share the same
home as a Stockholder, then such Stockholder, his or her spouse, their
non-competing issue and their Qualified Private Foundations shall not be
disqualified from participating in a Family Vote solely by reason of the fact
that such issue is a Competitor. If issue of a Stockholder would otherwise be
eligible to participate in a Family Vote and such issue are not competing with
the Company, such issue, their spouses, children and Qualified Private
Foundations shall not be disqualified from participating in such Family Vote
solely by reason of the fact that such issue's parents or siblings, or the
spouses or issue of such siblings, is a Competitor.
(iii) Even if one or more of the exceptions set forth in
Section 6.2 are applicable to a Competitor, such Competitor shall not be
entitled to participate in any Family Vote, and any Class B Shares that he or
she would otherwise be entitled to vote shall be excluded from the computation
of voting power in such Family Vote as if such Class B Shares were not issued
and outstanding, if Class B Stockholders then holding sixty-five percent (65%)
or more of the voting power of the Class B Shares (excluding for the purposes
of such computation the Class B Shares which such Competitor and the members of
his or her Family are entitled to vote) determine that it would be a conflict
of interest for such Competitor to participate in such Family Vote.
(iv) The provisions of subparagraphs (i) and (ii) of this
paragraph (b) limiting the right of any Class B Stockholder to vote Class B
Shares may be waived from time to time with the prior consent of Class B
Stockholders then holding eighty percent (80%) or more of the voting power of
the Class B Shares (excluding for the purposes of such computation the Class B
Shares which the Class B Stockholder whose right to vote is limited hereby, his
or her Family and their Qualified Private Foundations).
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(c) After February 28, 2002, any Class B Shares which Gerry, Lilo or
their Qualified Private Foundations are entitled to vote shall be excluded from
the computation of voting power in all Family Votes as if such Class B Shares
were not issued and outstanding.
(d) Except as expressly provided herein, nothing contained in this
Section shall be construed to exclude any Class B Stockholder entitled to vote
Class B Shares from (i) participating in any meeting of the stockholders of the
Company or consenting in writing to any action taken without a meeting of
stockholders or (ii) casting thereat or therein such number of votes per Class
B Share as the Company's Certificate of Incorporation, as amended or restated
from time to time, may provide, provided however, that no Common Stock owned by
a Class B Stockholder shall be voted in a manner inconsistent with the
decisions or determinations made by the Class B Stockholders in any Family
Votes taken pursuant to this Agreement.
Section 5.3. Voting by Persons Other than Record Owner of Class B
Shares.
(a) In the event of the incapacity of a Stockholder, the Class B
Shares which such Stockholder is entitled to vote shall be voted in all Family
Votes as follows, unless such Stockholder has otherwise provided in writing:
(i) In the event of the incapacity of either Gerry or Lilo
prior to March 1, 2002, their Class B Shares shall be voted by the
non-incapacitated spouse, if living. In the event of the incapacity of both
Gerry and Lilo prior to March 1, 2002, they shall be deemed to abstain from
voting any Class B Shares which they are entitled to vote.
(ii) In the event of the incapacity of a Sibling Stockholder,
the Class B Shares which such Sibling Stockholder is entitled to vote shall be
voted by such Sibling Stockholder's spouse, provided he or she is then
qualified to vote. If such spouse is not qualified, or if qualified
subsequently dies, resigns or becomes incapacitated, then such spouse shall be
succeeded by such Sibling Stockholder's issue who are then age twenty-seven
(27) or older, provided they are then qualified to vote; and provided further
that if more than one issue of such Sibling Stockholder is then age
twenty-seven (27) or older, or subsequently becomes age twenty-seven (27), then
each such issue (provided they are then qualified to vote) shall vote an equal
number of such Class B Shares. At a time when such Sibling Stockholder has no
surviving or qualified spouse or issue age twenty-seven (27) or older, such
Class B Shares shall be voted by each other Sibling Stockholder's Group in
proportion to its then respective voting power. To the extent determinable,
such Class B Shares shall be voted in the manner that such incapacitated
Sibling Stockholder would have voted such Class B Shares.
(b) In the event of the death of a Sibling Stockholder, the Class B
Shares of such
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Deceased Stockholder shall be voted in all Family Votes by the following
persons, provided they are otherwise qualified to vote, unless such Stockholder
has designated in writing that they be voted by another person otherwise
qualified to vote:
(i) to the extent that such Class B Shares are bequeathed to
the spouse of such Deceased Stockholder, such spouse shall be entitled to vote
such Class B Shares or direct their voting by the Deceased Stockholder's
Representative;
(ii) to the extent that such Class B Shares are bequeathed to
the issue of such Deceased Stockholder, each of such issue who is age
twenty-seven (27) or older shall be entitled to vote his or her Class B Shares
or direct their voting by the Sibling Stockholder's Representative; provided
that, until such issue has reached the age of twenty-seven (27), the spouse of
such Deceased Stockholder, if living, shall be entitled to vote such Class B
Shares or direct their voting by the Deceased Stockholder's Representative, or
if such spouse is not living, each of the other Sibling Stockholder's Groups in
proportion to its then respective voting power shall be entitled to vote such
Class B Shares or direct their voting by the Deceased Stockholder's
Representative;
(iii) to the extent that such Class B Shares are bequeathed
to a Permitted Transferee that is a trust, corporation or partnership or to a
Qualified Private Foundation, the trustees, directors or partners thereof, as
the case may be, shall be entitled to vote such Class B Shares or direct their
voting by the Deceased Stockholder's Representative, subject to the limitations
set forth in Section 5.2(a);
(iv) to the extent that such Class B Shares are bequeathed to
another Sibling Stockholder, his or her spouse or issue, each such persons, if
then qualified shall be entitled to vote such Class B Shares or direct their
voting by the Deceased Stockholder's Representative, subject to the limitations
set forth in Section 5.2(a); and
(v) to the extent that such Class B Shares are bequeathed to
the issue of a Sibling Stockholder, each of such issue who is age twenty-seven
(27) or older shall be entitled to vote his or her Class B Shares or direct
their voting by the Deceased Stockholder's Representative; provided that, until
such issue has reached the age of twenty-seven (27), each of the Sibling
Stockholder's Groups in proportion to its then respective voting power shall be
entitled to vote such Class B Shares or direct their voting by the Deceased
Stockholder's Representative.
(c) If, as a result of or following a legal separation or divorce,
the spouse or former spouse of a Sibling Stockholder holds an ownership
interest in any Class B Shares and/or the right to vote such Class B Shares,
then and in that event, unless such spouse or former spouse transfers the right
to vote such Class B Shares in all Family Votes to either Gerry or Lilo, such
Sibling Stockholder or such Sibling Stockholder's issue (who are then qualified
to vote Class B Shares) (hereinafter the "Designated Voting Group"), all voting
rights of such spouse or former spouse with respect to such Class B Shares
shall be suspended, and such Class B
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Shares shall neither participate nor be included for purposes of determining
the vote cast with respect to any action, matter or transaction requiring a
Family Vote, until such time as such Class B Shares are owned and/or voted
exclusively by one or more persons in the Designated Voting Group. If the
ownership of any such Class B Shares is transferred by a legally separated or
divorced spouse or former spouse to a third party who is neither a Permitted
Transferee nor Qualified Private Foundation and such Class B Shares are no
longer subject to reacquisition by any Stockholders or their Families or
Qualified Private Foundations, then and in that event such Class B Shares shall
be converted into Class A Shares effective as of the date of such transfer.
(d) If subsequent to the death of a Sibling Stockholder his or her
spouse remarries or becomes incapacitated, then and in that event the vote of
any Class B Shares which he or she then owns and/or has the right to vote in
any Family Vote shall be suspended, and such Class B Shares shall neither
participate nor be included for purposes of determining the vote cast with
respect to any action, matter or transaction requiring a Family Vote until such
time as such Class B Shares are either owned by and/or voted exclusively by one
or more persons in the Designated Voting Class. If the ownership of any such
Class B Shares are transferred by the incapacitated or remarried spouse to a
third party who is neither a Permitted Transferee nor a Qualified Private
Foundation and such Class B Shares are no longer subject to reacquisition by
any Stockholders or their Families or Qualified Private Foundations, then and
in that event such Class B Shares shall be converted into Class A Shares
effective as of the date of such transfer.
(e) With respect to a Qualified Private Foundation which a Sibling
Stockholder or a member of a Sibling Stockholder's Family has caused to be
established, the trustees, directors or managers, as the case may be, of such
Qualified Private Foundation shall cause the Class B Shares transferred thereto
by such Sibling Stockholder or Family to be voted in any Family Vote by either
the Sibling Stockholder, his or her spouse or issue, or Gerry or Lilo, and if
there be no such persons to each Sibling Stockholder's Group in proportion to
its then respective voting power , subject to the limitations set forth in
Section 5.2(a).
(f) With respect to a Qualified Private Foundation which Gerry or
Lilo has caused to be established, the trustees, directors or managers, as the
case may be, of such Qualified Private Foundation shall cause the Class B
Shares transferred thereto by either Gerry or Lilo to be voted in any Family
Vote by either Gerry or Lilo. Where neither Gerry nor Lilo is authorized to
vote Class B Shares transferred by either of them to such Qualified Private
Foundation, the trustees, directors or managers of such Qualified Private
Foundation shall cause such Class B Shares to be voted by the Sibling
Stockholders (or if a Sibling Stockholder is not then living or is
incapacitated, by such Sibling Stockholder's Family) in
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proportion to the respective voting power of the Class B Shares held by each
such Sibling Stockholder's Group.
ARTICLE VI
RIGHT AND OBLIGATIONS OF A CLASS B STOCKHOLDER
COMPETING WITH THE COMPANY
Section 6.1. Competition. In the event a Stockholder, his or her
spouse, or a child or grandchild who shares the same home as such Stockholder
engages directly or indirectly, whether as a proprietor, partner, stockholder,
director, officer, employee, consultant, lender, guarantor or otherwise, in any
activity or business which the Board, in its reasonable judgment determines to
be materially competitive with an activity or business in which the Company or
any of its affiliates is then engaged, then and in that event neither such
Stockholder (a "Competing Stockholder") nor his or her spouse nor any child or
grandchild who shares the same home as such Competing Stockholder shall be
eligible to serve either as an employee, officer or director of the Company or
any of its affiliates, and, in addition, neither such Competing Stockholder nor
his or her spouse nor any child or grandchild who shares the same home as such
Competing Stockholder nor any Qualified Private Foundation of any of them shall
be entitled to attend any meetings of the Board, or receive any information,
financial or otherwise, relating to or concerning the business and affairs of
the Company and/or of its affiliates, except as may be required by law.
Section 6.2. Exceptions. Notwithstanding the provisions of Section
6.1 above, no activity or business of a Stockholder or the spouse, child or
grandchild of such Stockholder who shares the same home as such Stockholder,
shall be deemed to be competitive hereunder if such person was engaged in such
activity or business prior to the commencement of such activity or business by
the Company or any affiliate thereof, provided however that such person may not
serve as a Director of the Company unless (i) persons and entities owning
eighty percent (80%) or more of the Class B Shares, excluding for purposes of
this computation, the Class B Shares owned by such Competing Stockholder, his
or her spouse or any child or grandchild who shares the same home of such
Competing Stockholder nor any Qualified Private Foundation of any one of them,
determine that such Competing Stockholder may serve as a Director and (ii) the
Board shall have received an opinion from legal counsel to the Company, in form
and substance satisfactory to the Board, that permitting such Competing
Stockholder to serve as a Director will not subject the Directors to any legal
liability. In the event such Competing Stockholder is permitted to serve as a
Director, he or she shall not participate in any discussions or meetings, or be
given any information or be permitted to vote with respect to any matter,
action or transaction, which
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the Board in its absolute discretion believes would create the appearance of
impropriety or otherwise result in a conflict of interest. Further, the
ownership of an equity interest in the securities of an entity engaged in
activities or businesses competitive with those of the Company or any affiliate
thereof and which is listed on a recognized securities exchange or traded in
the national over-the-counter market shall not be deemed to be competitive
hereunder if such equity interest is less than one percent (1%) of the equity
of such entity and the fair market value of such equity interest in the
aggregate was less than $500,000, determined as of the date or dates of any
such purchase or purchases.
Section 6.3. Procedure. In the event the Board is informed or
otherwise has reason to believe that a Stockholder, his or her spouse, or a
child or grandchild sharing the same home as such Stockholder, is engaging in
conduct which is materially competitive with an activity or business in which
the Company or any of its affiliates is engaged, then and in that event the
Company shall give such person ten (10) Business Days' (as hereinafter defined)
prior notice in writing, specifying the conduct or activity which the Board
deems to be materially competitive. During said ten (10) business-day period
such person may (i) either cure such conduct or activity or (ii) contest in
writing the determination of the Board, and if the parties cannot resolve the
dispute, the dispute shall be submitted to binding arbitration, as hereinafter
provided in Article IX.
ARTICLE VII
FUTURE CHANGES IN CAPITAL STRUCTURE
All references in this Agreement to numbers of shares shall be deemed
adjusted as appropriate to reflect any stock splits, reverse stock splits,
stock dividends or other changes in the Company's capital structure that may
occur after the date hereof. If the Company hereafter declares a dividend
payable in, or subdivides or combines, shares of its Common Stock, or if the
Company engages in a recapitalization, reorganization, merger, consolidation,
split-up, transfer of assets, combination or exchange of shares of Common
Stock, or if any other event shall occur which in the judgment of the Board
calls for action by way of adjusting the number of shares of its Common Stock,
the Company shall forthwith take such action as in the Board's judgment shall
be necessary or appropriate to preserve the owners of the Common Stock's rights
with respect to the Common Stock substantially proportionate to their rights
existing prior to such event. Nothing in this Agreement is intended to preserve
a Stockholder's equity interest in the Company against dilution resulting from
the issuance of securities by the Company in the future.
ARTICLE VIII
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TERM OF AGREEMENT; AMENDMENT
Section 8.1. Term of Agreement.
(a) This Agreement shall become effective as of the Effective Date of
the IPO. Except as provided in subparagraph (b), the initial term of this
Agreement shall be twenty (20) years and shall be automatically extended for
additional five (5) year periods unless terminated by Class B Stockholders then
holding sixty-five percent (65%) or more of the voting power of the Class B
Shares, provided that notice of termination is given no less than eight (8)
months nor more than eighteen (18) months prior to the end of the initial term
or any successive five (5) year term, as the case may be.
(b) Unless otherwise terminated in accordance with subparagraph (a)
above, this Agreement shall terminate at the time when all of the outstanding
shares of Class B Common Stock are automatically converted into Class A Common
Stock as provided for in Section 2.6.
Section 8.2. Amendment of Agreement. The amendment of this
Agreement shall require the affirmative vote of Class B Stockholders then
holding eighty-five percent (85%) or more of the voting power of the Class B
Shares, provided that such amendment shall not materially prejudice the
economic or voting rights of any Class B Stockholder or diminish the ability of
such Class B Stockholder or any member of his or her Family to serve as a
Director, unless such Class B Stockholder has consented to such amendment. Any
amendment which is essentially ministerial in nature and non-substantive may be
made by the affirmative vote of Class B Stockholders then holding sixty-five
percent (65%) or more of the voting power of the Class B Shares. To be
effective and binding upon the parties, any such amendment shall be in writing
and shall be signed by Class B Stockholders holding not less than the
percentage of voting power of the Class B Shares required hereunder.
ARTICLE IX
RESOLUTION OF DISPUTES
Section 9.1. Arbitration. Except as provided in Section 9.2, all
controversies arising out of or relating to this Agreement or the breach hereof
shall be settled by arbitration in the County of Nassau, State of New York, in
accordance with the rules of the American Arbitration Association, and judgment
upon the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. Any arbitration hereunder shall be before three (3)
arbitrators.
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Section 9.2. Injunctive Relief. Each of the parties hereto
acknowledges that the breach, or threatened breach, of any of the provisions of
this Agreement by a party will cause irreparable harm to the other parties,
which harm cannot be adequately or fully redressed by the payment of monetary
damages. Each party acknowledges that the terms of this Agreement are
reasonable under the circumstances. Accordingly, the parties hereto shall be
entitled, in addition to any other right or remedy they may have at law or in
equity, to an injunction enjoining or restraining any other party from any
breach or threatened breach of this Agreement and/or specific performance
enforcing the terms of this Agreement. Each of the parties hereto hereby
waives the defense in any equitable proceeding that there is an adequate remedy
at law for any such breach.
Section 9.3. Equitable Remedies. Notwithstanding the provisions
of Section 9.1, any proceeding for injunctive relief or specific performance in
connection with this Agreement shall be commenced in the Supreme Court of the
State of New York, County of Nassau, and each of the parties hereby accepts the
exclusive jurisdiction of such Court for such purpose; provided, however, that
the petitioner may commence such proceeding in such other court as may be
necessary, in the petitioner's judgment, in order to more effectively or
expeditiously obtain personal jurisdiction over the respondent.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1. Interpretation. To the extent feasible, the terms,
conditions and provisions of this Agreement shall be interpreted in accordance
with the objectives set forth in the "Preamble".
Section 10.2. Legend on Certificate. Upon the execution of this
Agreement, each certificate evidencing any of the Class B Shares held by a
Stockholder, his or her Family or Qualified Private Foundations, shall be
endorsed as follows:
The shares of stock evidenced by this certificate are subject
to the restrictions of and are transferable only upon compliance with the
provisions of a 1997 Leeds Family Stockholders' Agreement entered into by and
among the Company and the holders of the Class B Common Stock of the Company.
A copy of such Agreement is on file in the office of the Company.
In addition, all such certificates shall bear such other legends as,
in the opinion of the Company's counsel, are necessary to ensure compliance
with federal and any applicable state
27
<PAGE> 28
securities laws.
Section 10.3. Representative and Successors in Interest.
(a) Except as may be otherwise specifically provided in this
Agreement, in the event of a person's death or incapacity, his or her
Representative and/or successors in interest shall succeed to all his or her
rights and obligations under this Agreement and shall be bound by all the terms
and conditions hereof, and they shall be entitled to exercise such rights, and
shall be required to fulfill such obligations, in the same manner and to the
same extent that such person would have been so entitled or required but for
his or her death or incapacity.
(b) Except as otherwise provided herein to the contrary, this
Agreement shall be binding upon, and shall inure to the benefit of, the parties
and their respective heirs, legal representatives, successors and permitted
assigns.
Section 10.4. Waiver; Complete Agreement. None of the parties shall
be deemed to waive any of his, her or its rights hereunder unless such waiver
is in writing and signed by him, her or it. No delay or omission by any party
in exercising or enforcing any right hereunder shall operate as a waiver of
such rights, and a waiver on one occasion shall not be construed as a waiver of
any right or remedy on any future occasion. This Agreement contains the full,
final and exclusive statement of the agreement of the parties hereto and
supersedes and replaces any and all prior understandings, arrangements and
agreements, written or oral, among the parties relating to the Class B Common
Stock (including but not limited to the 1991 Leeds Family Shareholders'
Agreement and the 1997 Stockholders' Agreement), and no promises, agreements or
representations with respect to the matters herein contained shall be binding
upon any of the parties unless set forth herein.
Section 10.5. Further Assurances. Each of the parties hereto, upon
request of another party, shall take all such actions and execute and deliver
such further instruments, documents and agreements as may be necessary or
appropriate to effectuate the intent of this Agreement. At any closing of the
purchase of the Selling Stockholder's Class B Shares, the Selling Stockholder
shall deliver the stock certificate(s) representing the Class B Shares to be
sold, which certificate(s) shall be duly endorsed for transfer in blank or have
duly executed stock powers attached. At the closing, the Selling Stockholder
shall also represent and warrant in writing to the Company, the Remaining
Stockholders and/or the Third Party Purchaser, as the case may be, that (i) the
Selling Stockholder is the owner of record of such Class B Shares; (ii) the
Selling Stockholder holds such Class B Shares free and clear of all claims,
liens, options, charges, encumbrances or rights of others (except for any
encumbrances arising pursuant to this Agreement); (iii) the Selling Stockholder
has full right, power and
28
<PAGE> 29
authority to transfer and convey such Class B Shares to the Company, the
Remaining Stockholders or the Third Party Purchaser, as the case may be; and
(iv) such transfer and conveyance do not conflict with, violate or infringe any
legal restriction, contract or instrument to which the Selling Stockholder is
subject or by which he, she or it is bound.
In the event a party shall not take all such actions or execute and
deliver all such further instruments, documents and agreements, then and in
that event the Company shall have the right to execute and deliver on such
party's behalf, and such party hereby appoints the Company, and its duly
authorized agents, as such party's agent and attorney-in-fact for the purpose
of executing and delivering any and all other instruments, documents,
agreements and other writings necessary to effectuate the terms of this
Agreement. The powers of attorney herein granted, being coupled with an
interest, are irrevocable and shall not be revoked by the death, dissolution or
incapacity of any party hereto or for any other reason.
Section 10.6. Invalidity of Noncomplying Conveyances.
(a) Any purported gift, sale, transfer, assignment, mortgage,
pledge, hypothecation, or grant of a security interest in all or any of the
Common Stock in violation of this Agreement shall be null and void, and the
Company shall not be required to recognize any such gift, sale, transfer,
assignment, mortgage, pledge, hypothecation or grant of a security interest as
passing any interest in such Common Stock.
(b) In the event of any transfer of any Common Stock by a
Stockholder, his or her Representative, any successor in interest, any
Permitted Transferee or Qualified Private Foundation, by operation of law
(other than transfers occasioned by an individual's death) or court order,
including but not limited to any foreclosure, adjudication in bankruptcy,
divorce, appointment of a receiver of the assets of a holder or owner of Common
Stock, or levy and execution, such owner or holder shall give immediate notice
("Immediate Notice") thereof to the Company, including in such notice the date
and circumstances of such transfer and the name and address of the transferee.
Each Sibling Stockholder's Group (subject to the provisions of Section 1.2(d)),
or if they determine not to purchase all such Common Stock, the Company, at
their option, upon giving written notice to such transferee, shall have the
right to purchase such Common Stock at the closing price of the Company's
stock on the date prior to the date on which such Immediate Notice is given,
provided such notice of purchase is given within sixty (60) days after receipt
of such Immediate Notice.
Section 10.7. Applicable Law; Severability. THIS AGREEMENT HAS
BEEN MADE AND ENTERED INTO IN THE STATE OF NEW YORK AND SHALL BE
29
<PAGE> 30
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REFERENCE TO ITS PRINCIPLES REGARDING CHOICE OR CONFLICT
OF LAW. WHEREVER POSSIBLE, EACH PROVISION OF THIS AGREEMENT SHALL BE
INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW,
BUT IF ANY PROVISIONS HEREOF SHALL BE PROHIBITED BY OR INVALID UNDER ANY SUCH
LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR
INVALIDITY, WITHOUT INVALIDATING OR NULLIFYING THE REMAINDER OF SUCH PROVISION
OR ANY OTHER PROVISION OF THIS AGREEMENT.
Section 10.8. Certificate of Incorporation of CMP Media Inc.
Wherever possible, each provision of this Agreement shall be interpreted in
such manner as to be consistent with the provisions of the Company's
Certificate of Incorporation as amended and/or restated from time to time, but
if any provision of this Agreement shall be inconsistent with any provisions of
such Certificate of Incorporation, the provisions of such Certificate of
Incorporation shall govern.
Section 10.9. Compliance. Notwithstanding any other provision of
this Agreement no Stockholder, his or her Family, Qualified Private
Foundations, or his or her Representative or agent will sell or attempt to sell
any shares of Common Stock, except in accordance with all applicable federal
and state securities laws, all applicable rules and regulations of the SEC, and
any applicable underwriters' limitations and restrictions.
Section 10.10. Incapacity and/or Inability of Stockholder to Act.
In the event a person, because of his or her incapacity, is unable to act, then
and in that event, any action which may be taken by such person may be taken by
his or her duly authorized proxy or attorney-in-fact, provided however, that no
such action may be taken by such proxy or attorney-in-fact which is
inconsistent with the voting, transfer and the other terms, conditions and
provisions of this Agreement.
Section 10.11. Notices. All notices, requests, consents,
designations and demands required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given (a) when
personally delivered to an individual party or to an authorized officer of a
corporate party, whether by messenger, courier or other person, (b) on the
second Business Day after the date it is sent by certified or registered mail,
return receipt requested, or (c) on the next Business Day after the date it is
sent via facsimile (provided it is actually received and is not materially
illegible), as follows:
30
<PAGE> 31
If to the Company:
CMP Media Inc.
600 Community Drive
Manhasset, New York 11030
Attention: President and Chief Executive Officer
Fax: (516) 562-5718
with a copy to:
CMP Media Inc.
600 Community Drive
Manhasset, New York 11030
Attention: General Counsel
Fax: (516) 562-7123
If to an owner or holder of Common Stock, to the name and address set
forth in Schedule 10.11 or to such person or entity at such other mail or
facsimile address as such person or entity shall have last designated by notice
given to the Company and the other parties in accordance herewith.
With respect to any notice required to be given hereunder, if a party
giving such notice has actual knowledge that the party to whom notice is to be
given in accordance with this Agreement will not receive actual notice in a
timely manner, then and in that event, the party giving such notice shall use
his, her or its reasonable efforts to attempt to provide such notice in a
timely manner.
Section 10.12. Assignment. Except as expressly provided in this
Agreement, no party may assign any rights or delegate any obligations or
liabilities hereunder without the prior written consent of all the other
parties, except that the Company may assign any of its rights and delegate any
of its duties to an entity that controls, is controlled by or is under common
control with the Company; provided, however, that no such assignment or
delegation shall relieve the assignor from his, her or its obligations or
liabilities hereunder.
Section 10.13. Survival. This Agreement shall survive any merger,
sale or other disposition of the Company provided that the Class B Stockholders
then own securities having more than fifty percent (50%) of the combined voting
power of any such successor entity.
31
<PAGE> 32
Section 10.14. Gender and Number. Except as otherwise indicated by
the context, references herein to one gender shall include the other genders,
and references herein to the plural shall include the singular.
Section 10.15. Dates. If any date referenced in this Agreement
falls on a day that is not a Business Day, the next succeeding Business Day
shall be deemed substituted for such date. "Business Day" shall mean any day
that the office of the Secretary of State of the State of Delaware is open for
receipt of official corporate filings.
Section 10.16. Headings. The headings herein are for convenience of
reference only and shall not be considered in construing this Agreement.
Section 10.17. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed as an original and all of
which shall together constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
32
<PAGE> 33
IN WITNESS WHEREOF, the individual parties have executed this
Agreement, and the Company has caused this Agreement to be executed by an
officer thereunto duly authorized, as of the day and year first above written.
CMP MEDIA INC.
By:
----------------------------
Michael S. Leeds
President
Attest:
By:
----------------------------
(CORPORATE SEAL)
------------------------
GERARD G. LEEDS
------------------------
LILO J. LEEDS
------------------------
MICHAEL S. LEEDS
------------------------
RICHARD A. LEEDS
------------------------
DANIEL H. LEEDS
------------------------
GREG JOBIN-LEEDS
------------------------
JENNIFER LEEDS
33
<PAGE> 1
EXHIBIT 5
[DOW, LOHNES & ALBERTSON, PLLC LETTERHEAD]
July 18, 1997
CMP Media Inc.
6000 Community Drive
Manhasset, New York 11030
Ladies and Gentlemen:
We refer to the Registration Statement (the "Registration Statement")
on Form S-1 (File No. 333-26741), filed by CMP Media Inc., a Delaware
corporation (the "Company"), with the Securities and Exchange Commission (the
"Commission"), for the purpose of registering under the Securities Act of 1933,
as amended (the "Securities Act"), shares of the Company's Class A Common Stock,
par value $.01 per share (the "Class A Common Stock"), to be offered to the
public pursuant to an Underwriting Agreement (the "U.S. Underwriting Agreement")
among the Company and Goldman, Sachs & Co., Lazard Freres & Co. LLC, Bear,
Stearns & Co. Inc. and Furman Selz LLC, as representatives of the U.S.
underwriters, and an Underwriting Agreement (the "International Underwriting
Agreement" and, together with the U.S. Underwriting Agreement, the "Underwriting
Agreements") among the Company and Goldman Sachs International, Lazard Capital
Markets, Bear, Stearns International Limited and Furman Selz LLC, as
representatives of the international underwriters. Capitalized terms used herein
that are not otherwise defined herein shall have the same meaning as in the U.S.
Underwriting Agreement.
In connection with the foregoing registration, we have acted as counsel
for the Company, and have examined originals or copies, certified or otherwise
identified to our satisfaction, of all such records of the Company and all such
agreements, certificates of public officials, certificates of officers or
<PAGE> 2
CMP Media, Inc.
July 18, 1997
Page 2
representatives of the Company and others, and such other documents,
certificates and corporate or other records as we have deemed necessary or
appropriate as a basis for the opinion set forth herein. In our examination we
have assumed the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies and the authenticity of the originals of such latter
documents.
We are members of the Bar of the District of Columbia and do not
purport to be experts on, or generally familiar with, or certified to express
legal conclusions based upon, the laws of any other jurisdiction, other than the
Delaware General Corporation Law and the laws of the United States to the extent
applicable hereto. Accordingly, as to matters of law set forth below, our
opinion is limited to matters of law under the laws of the District of Columbia,
the laws of the United States to the extent applicable hereto and the Delaware
General Corporation Law, and we express no opinion as to conflicts of law rules,
or the laws of any states or jurisdictions other than as specified above.
Based upon the foregoing and subject to the other qualifications stated
herein, we are of the opinion that the shares of Class A Common Stock being
registered by the Company pursuant to the Registration Statement have been duly
authorized and, when issued and delivered in accordance with the terms of the
Underwriting Agreements, will be legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and any abbreviated registration statements relating
thereto that may be filed to register additional securities identical to those
covered by the Registration Statement (including a registration statement filed
pursuant to Rule 462(b) under the Securities Act), and to the
<PAGE> 3
CMP Media, Inc.
July 18, 1997
Page 3
reference to this firm under the caption "Legal Matters" contained in the
prospectus filed as a part thereof. In giving such consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act.
Very truly yours,
DOW, LOHNES & ALBERTSON, PLLC
/s/ Edward J. O'Connell
By: ______________________________
Edward J. O'Connell
Member
<PAGE> 1
Exhibit 10.17
CMP MEDIA INC.
EMPLOYEE STOCK PURCHASE PLAN
The purpose of this Plan is to attract and retain qualified employees
to promote the business of CMP Media Inc. by providing its employees with an
opportunity to purchase its Class A common stock. This Plan is intended to meet
the requirements for an "employee stock purchase plan" under Code Section 423
and is to be interpreted and applied consistent with those requirements.
1. Definitions
"Average Market Price" shall mean the average of the closing price of
the Corporation's Shares on the NASDAQ National Market System on the ten trading
days prior to a given day or such other price as may be determined by the Stock
Plan Committee in its sole discretion.
"Beneficiary" shall have the meaning set forth in Section 23.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Compensation" shall mean the total annual salary or rate of pay paid
by the Corporation or its Subsidiaries to an Eligible Employee, including
overtime and commissions but not including: (a) reimbursement for educational
expenses of the Participant, (b) any imputed income relating to dependent care
or life insurance benefits provided by the Employer, (c) reimbursement for
relocation expenses, (d) any disability payments made by a third-party and (e)
car allowances, all as determined in the sole discretion of the Stock Plan
Committee.
"Corporation" shall mean CMP Media Inc.
"Eligible Employee" shall have the meaning set forth in Section 4.
"Exercise Date" shall mean with respect to any Option offering, the
last day of the Offering Period.
"Grant Date" shall mean the first business day of each Offering Period.
"Offering Period" shall mean the six (6) month period beginning on the
date determined by the Stock Plan Committee for the issuance of Options.
<PAGE> 2
"Option" shall mean a right granted to an Eligible Employee by the
Stock Plan Committee pursuant to the Plan to purchase shares in an Offering
Period.
"Participant" shall mean an Eligible Employee who elects to participate
in the Plan pursuant to Section 6.
"Plan" shall mean the CMP Media Inc. Employee Stock Purchase Plan as
set forth herein and amended from time to time.
"Plan Year" shall mean the twelve (12) month period commencing January
1 and ending December 31 of each year.
"Shares" shall mean shares of the Class A common stock, $.01 par value
per share, of the Corporation.
"Stock Plan Committee" shall mean the committee appointed by the Board
of Directors of the Corporation to administer this plan.
"Subsidiary" shall mean a subsidiary of the Corporation within the
meaning of Section 424(f) of the Code and the regulations promulgated
thereunder, which has been designated by the Stock Plan Committee as a
participating employer in this Plan.
2. Administration. The Plan shall be administered by the Stock Plan
Committee. The Stock Plan Committee shall have the sole and discretionary
authority to make rules and regulations for the administration of the Plan and
to interpret the Plan. The Stock Plan Committee's interpretations and decisions
with regard thereto shall be final, binding and conclusive on all interested
parties. No member of the Stock Plan Committee shall participate in any decision
respecting his or her interest as a Participant in the Plan (other than a
decision respecting the interest of a group of similarly situated Plan
Participants which includes the Stock Plan Committee member).
3. Stock Subject to the Plan. The Corporation hereby reserves and makes
available for purchase under the Plan 1,500,000 shares. In the event any Option
granted under the Plan is canceled or expires unexercised, the number of Shares
no longer subject to such Option shall automatically become available for new
awards under the Plan.
4. Eligible Employees. All employees of the Corporation or any of its
participating Subsidiaries who have been employed by the Corporation or a
participating Subsidiary for at least three months as of the applicable Grant
Date shall be eligible to participate in the Plan,
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<PAGE> 3
except employees: (i) whose customary employment is less than twenty (20) hours
per week or not more than five (5) months in any calendar year, or (ii) who
immediately after the Grant Date, would own 5 percent or more of the total
combined voting power or value of all classes of stock of the Corporation or any
Subsidiary. For purposes of the preceding sentence, the rules of Sections
423(b)(3) and 424(d) of the Code shall apply in determining the employee's
percentage of stock ownership.
5. Offerings. On each Grant Date, the Stock Plan Committee shall grant
each Eligible Employee an Option to purchase Shares under the Plan.
6. Participation. An Eligible Employee on the Grant Date may become a
Participant in such offering by completing any election and payroll deduction
forms deemed appropriate by the Stock Plan Committee.
7. Payment. A Participant shall pay for any Shares by completing a
payroll deduction authorization form and forwarding it to the payroll
department. The form will authorize a regular payroll deduction from the
Participant's Compensation for the purpose of purchasing Shares, commencing as
of the beginning of the Offering Period to which such election applies.
Notwithstanding the foregoing, in the event a Participant is on a leave of
absence that qualifies as a family or medical leave under applicable personnel
policies of the Corporation during any payroll period, he or she may arrange to
pay directly to the Corporation any installment due for the payroll period. A
Participant may not change his payroll deduction during any Offering Period but
may cancel his payroll deduction in accordance with Section 8.
8. Cancellation. A Participant may, at any time and for any reason,
cancel his payroll deduction authorization and permanently withdraw the balance
accumulated in the Participant's payroll deduction account (without any interest
thereon). Any cancellation shall be in writing and must be received by the Stock
Plan Committee prior to the Exercise Date. Upon cancellation, the Participant
shall cease to participate in the Plan for the remainder of the Offering Period.
9. Options.
(a) Each Eligible Employee as of the Grant Date will be
granted an Option to purchase a number of Shares determined in accordance with a
uniform formula and in an amount not to exceed ten (10) percent of his
Compensation divided by the purchase price for each Share. Such limit shall be
applied in a manner determined by the Stock Plan Committee, in its sole
discretion. No Eligible Employee may be granted an Option which permits him
during any one calendar year to purchase Shares under the Plan, and any other
stock purchase plan of the
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<PAGE> 4
Corporation or its Subsidiaries, which exceed in value $10,000, as annually
adjusted by the Stock Plan Committee, in its sole discretion, for increases in
the cost of living (provided, in no event shall it exceed in value $25,000)
based on the Average Market Price of the Shares on the Grant Date of the Option.
(b) The purchase price for each Share purchased under the Plan
shall be determined at the discretion of the Stock Plan Committee, but shall not
be less than the lesser of: (i) 85 percent of the Average Market Price at the
Grant Date or (ii) 85 percent of the Average Market Price at the Exercise Date;
provided, in no event shall the purchase price be less than the par value of
such Shares.
(c) Unless an employee previously has withdrawn from the Plan,
a Participant will be deemed to have exercised his right to purchase shares as
of the Exercise Date. The number of shares purchased by the Participant shall be
equal to the whole number of shares that may be purchased under the Option with
the total amount withheld from the Participant's Compensation under the Plan
that has not been refunded to the Participant. Upon the exercise of any Option,
the payroll deduction funds relating to such Options shall be applied to the
purchase price. Any balance remaining in a Participant's payroll deduction
account after Shares have been purchased on the Exercise Date shall be rolled
forward and applied to the next succeeding Offering Period or, if the
Participant so elects, refunded to the Participant without interest. Any options
not exercised as of the Exercise Date shall be forfeited.
10. Registration of Certificates. Share certificates (or other evidence
of ownership) shall be issued as soon as practicable after each Exercise Date
and may be registered only in the name of the Participant, or, if the
Participant so indicates on his election form, in joint tenancy with a member of
the Participant's family, with right of survivorship. A Participant who is a
resident of a jurisdiction which does not recognize such a joint tenancy may
have certificates registered in the Participant's name as tenant in common or as
community property with a member of the Participant's family, without right of
survivorship.
11. Rights as a Stockholder. None of the rights or privileges of a
stockholder of the Corporation shall exist with respect to Options issued under
the Plan unless and until Shares have been purchased on behalf of the
Participant and stock certificates (or other evidence of ownership) have been
issued.
12. Rights on Resignation or Termination of Employment. In the event of
a Participant's resignation or termination of employment for any reason,
including by reason of retirement, death or disability, such Participant's
Option shall be canceled and his payroll
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<PAGE> 5
deductions, if any, shall be refunded without interest as soon as
administratively practicable following the cancellation of such Option.
13. Rights Not Transferable. A Participant shall not assign, sell,
encumber, transfer or otherwise dispose of any rights or interests under the
Plan. Any attempted disposition in violation of the preceding sentence shall be
null and void. Any Option hereunder must be exercised by the employee during his
lifetime.
14. Application of Funds. All payroll deduction contributions held by
the Corporation under the Plan may be used for any corporate purpose prior to
its application to the purchase price for an Option.
15. Adjustment in Case of Changes Affecting the Corporation's Stock. In
the event of any stock dividend, stock split, recapitalization, reorganization,
merger, consolidation, split-up, combination or exchange of shares, or any
purchase of Shares at a price substantially below fair market value, or of any
similar change affecting the capital structure of the Corporation, the number
and kind of Shares available for awards under the Plan shall be appropriately
adjusted, consistent with such change, in such manner as the Stock Plan
Committee in its sole discretion may deem equitable to prevent substantial
dilution or enlargement of the rights granted to, or available for, the
Participants hereunder. The Stock Plan Committee shall give notice to each
Participant of any adjustment made pursuant to this Section, and such adjustment
shall be effective and binding for all purposes of the Plan.
16. Amendment or Termination of the Plan. The Board of Directors may at
any time, or from time to time, retroactively or prospectively, amend the Plan
in any respect, except that, without the approval of a majority of the shares of
stock of the Corporation then issued and outstanding and entitled to vote, no
amendment shall be made (i) increasing or decreasing the number of Shares
authorized for the Plan under Section 3 (other than as provided in Section 15),
(ii) decreasing the minimum purchase price per Share, or (iii) withdrawing the
administration of the Plan from the Stock Plan Committee. Notwithstanding the
foregoing, in no event shall any amendment be effective to the extent it
adversely affects in any material respect any Option previously issued under the
Plan, unless the Participant holding such Option consents in writing thereto.
This Plan and all rights of employees under any offering hereunder shall
terminate at any time, at the discretion of the Board of Directors.
17. Plan Shares Purchases. The Stock Plan Committee may purchase
outstanding Shares on behalf of the Plan, upon such terms as the Stock Plan
Committee may approve, or may cause the Corporation to issue authorized but
unissued Shares, for delivery under the Plan.
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<PAGE> 6
18. Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of New York, without reference to the
principles of conflicts of law thereof. The Plan is intended to qualify under
Section 423 of the Code and shall be interpreted accordingly.
19. No Liability of Stock Plan Committee Members. No member of the
Stock Plan Committee shall be personally liable (i) by reason of any contract or
other instrument executed by such member or by his authorized agent in his
capacity as a member of the Stock Plan Committee, or (ii) for any mistake of
judgment made as a Member of the Stock Plan Committee, in good faith and in
belief that it was in the best interests of the Corporation, and the Corporation
shall indemnify and hold harmless each employee, officer and director of the
Corporation and its Subsidiaries to whom any duty or power relating to the
administration or interpretation of the Plan may be allocated or delegated,
against any cost or reasonable expense (including counsel fees) or liability
(including any sum paid in settlement of a claim with the approval of the Board
of Directors of the Corporation) arising out of any act or omission to act in
connection with the Plan unless arising out of such person's fraud or bad faith.
The indemnification provided for in this Section 19 shall be in addition to any
rights of indemnification such individual has as a director or officer pursuant
to law, or under his employer's certificate of incorporation or by-laws.
20. Successor Corporation. The obligations of the Corporation under the
Plan shall be binding upon the successor corporation or organization resulting
from the merger, consolidation or other reorganization of the Corporation.
21. Withholding. As a precondition to the delivery of any Shares, the
Corporation or, if applicable, the Participant's employer shall have the right
and power to deduct or withhold or require a Participant to remit an amount
sufficient to satisfy federal, state and local taxes, domestic or foreign, that
are required by law or regulation to be withheld upon the exercise of any Option
or upon the sale of any Shares that are required by law or regulation to be
withheld. In the alternative, the Stock Plan Committee, in its discretion, may
either permit the Participant to provide irrevocable instructions to a broker to
sell such Shares from the Participant's Option as are necessary to satisfy any
tax withholding obligation and to promptly remit such sale proceeds to the
Corporation or have withheld from the Participant's Option such Shares as are
necessary to satisfy any tax withholding obligation.
22. Notice of Premature Disposition. A Participant or former
Participant who disposes of Shares acquired under the Plan within (i) two years
of the Grant Date of the Options by which such Shares were acquired, or (ii)
twelve months of the date of transfer of Shares to him upon exercise of an
Option, shall notify, in writing, the Treasurer of the Corporation of such
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<PAGE> 7
disposition and shall make appropriate arrangements for satisfying income and
payroll tax withholding requirements.
23. Beneficiary. A Participant may file a written designation of a
beneficiary who is to receive any Shares and/or payment under the Plan in the
event of the Participant's death. Such designation may be changed by the
Participant at any time by written notice to the Director of Compensation and
Benefits of the Corporation, but to be effective such notice must be received
prior to the Participant's death. In the event a Participant dies without
designating a Beneficiary, or if the designated Beneficiary predeceases the
Participant, the Participant's spouse shall be his Beneficiary, or in the
absence of a spouse, the Participant's estate shall be his Beneficiary.
24. Corporation's Payment of Expenses Related to the Plan. The
Corporation will bear all expenses incurred in administering the Plan, including
expenses of issuing Shares provided hereunder.
25. Plan and Rights to Purchase Common Stock Not to Confer Rights with
Respect to Continuance of Employment. The Plan and any right to purchase Shares
under the Plan shall not confer upon any employee any right with respect to
continuance of employment by the Corporation or a Subsidiary and shall not
restrict or interfere in any way with the right of the Corporation or a
Subsidiary to terminate his employment at any time.
26. Participating Subsidiary. The Stock Plan Committee shall set forth
a procedure for a Subsidiary to be designated a participating employer
hereunder.
27. Gender and Number; Captions. Whenever used in the Plan, the
masculine gender shall include the feminine, and the singular shall include the
plural, unless the context indicates otherwise. The captions preceding the
Sections of the Plan have been inserted solely as a matter of convenience and in
no way define or limit the scope or intent of any provisions of the Plan.
28. Effective Date. The Plan is effective as of the date the initial
public offering of Shares is consummated and is subject to approval by the
shareholders of the Corporation.
- 7 -
<PAGE> 1
CMP MEDIA INC.
DIRECTORS' STOCK COMPENSATION PLAN
ARTICLE I
ESTABLISHMENT AND PURPOSE
This plan shall be known as the CMP Media Inc. Directors'
Stock Compensation Plan (the "Plan"). The purpose of the Company in
establishing and maintaining the Plan is (a) to secure for the Company and its
stockholders the benefits of stock ownership and the receipt of equity-based
compensation awards by Directors of the CMP Group who contribute materially to
its success; (b) to aid the CMP Group in attracting and retaining qualified
persons who are not employees of the Company; and (c) to closely align the
personal interests of the Directors with those of the Company and its
stockholders.
ARTICLE II
DEFINITIONS
"Affiliates" shall mean shall mean all entities controlling,
controlled by or under common control with the Company.
"Award" shall mean any Option, Stock Bonus or Restricted Stock
Award, granted to a Participant under the Plan.
"Award Agreement" shall mean the agreement entered into
between the Company and a Participant setting forth the terms and conditions
applicable to an Award granted to such Participant under the Plan, including
any Stock Option Agreement entered into in accordance with Section 6.2.
"Board of Directors" shall mean the Board of Directors of the Company.
"Change In Control" shall mean a direct or indirect transfer
of fifty percent (50%) or more of the voting control of the Company or the sale
of substantially all of the assets of the Company, in one or more transactions,
to (a) one or more persons who are not (i) members of the Leeds Family or (ii)
spouses, children or grandchildren of members of the Leeds Family and/or (b)
one or more entities which are not controlled by (i) one or more members of the
Leeds Family or (ii) one or more of the spouses, children or grandchildren of
members of the Leeds Family.
"Class A Stock" shall mean the Class A Common Stock of the
Company.
<PAGE> 2
"Closing Price" shall mean the last-quoted price at which
shares of Class A Stock were traded at the close of business on a national
securities exchange or the National Association of Securities Dealers Automated
Quotation National Market System.
"CMP Group" shall mean the Company or any of its Affiliates.
"Code" shall mean the Internal Revenue Code of 1986, as amended
"Committee" shall have the meaning specified in Section 3.1.
"Common Stock" shall mean all the classes of the Common Stock
of the Company collectively.
"Company" shall mean CMP Media Inc., a Delaware corporation,
or any successor thereto.
"Disability" shall mean a physical or mental impairment, as a
result of which a Participant shall have been unable, with or without
reasonable accommodation, to perform the essential functions of his or her
position for a period of at least sixteen (16) weeks during any 12-month
period.
"Fair Market Value" shall mean the fair market value of a
share of Class A Stock, which shall be (a) the Closing Price on the trading day
immediately preceding the date of determination of fair market value or (b) if
the Company is privately held and the Class A Stock is not publicly traded, the
fair market value of a share of Class A Stock as determined by such method as
the Committee shall reasonably designate.
"Leeds Family" shall mean Gerard G. Leeds, Liselotte J.
Leeds, Michael S. Leeds, Richard A. Leeds, Daniel H. Leeds, Greg Jobin-Leeds
and Jennifer Leeds-Lukehart.
"Option" shall mean the right of a Participant to purchase any
Share pursuant to the Plan.
"Option Price" shall mean the price at which a Participant may
purchase a Share pursuant to an Option.
"Parent Corporation" shall mean a parent corporation as
defined in Section 424(e) of the Code.
"Participant" shall mean a person who holds an Option or other
Award granted to him or her under the Plan.
<PAGE> 3
"Restricted Stock" shall mean an Award of the right to receive
any Shares subject to any restrictions as provided in Article VII.
"Retirement" shall mean the retirement of a Participant from
employment with the Company upon or after attaining the age of sixty-five (65),
or such earlier age as the Committee may in its sole discretion approve.
"Share" shall have the meaning specified in Article IV.
"Subsidiary" means a subsidiary corporation, as defined in
Section 424(f) of the Code.
ARTICLE III
ADMINISTRATION
Section 3.1. The Committee.
The Plan shall be administered by a Committee of the Board of
Directors consisting of not less than three (3) persons, who shall not be
eligible to be granted Awards under this Plan while serving as members thereof
(the "Committee"). The Committee shall be designated by the Board of
Directors, which may from time to time designate members in substitution for
members previously designated and may fill vacancies, however caused, in the
Committee.
Section 3.2. Authority of the Committee.
Except as limited by law or by the certificate of
incorporation or bylaws of the Company as amended from time to time, and
subject to all the provisions of the Plan, the Committee shall have full power
to administer the Plan, including without limitation the power (a) to select
the persons who shall become Participants in the Plan; (b) to determine the
terms and conditions of each Award, consistent with all the provisions of Plan;
(c) to construe and interpret the provisions of the Plan and any agreement or
instrument entered into under the Plan; (d) to establish, amend, rescind or
waive rules and regulations for the Plan's administration; (e) subject to the
provisions of Article X, to amend the terms and conditions of any outstanding
Award to the extent such amended terms and conditions are consistent with the
provisions of the Plan and are within the power of the Committee as provided
herein; and (f) to take all such other action and make all such other
determinations as may be necessary or advisable in order to administer the
provisions of the Plan and effectuate the purposes hereof.
<PAGE> 4
Section 3.3. Conduct of Business.
The Committee shall hold its meetings at such times and places
as it may determine. The Committee may delegate its authority and duties
hereunder to the extent permitted by law.
Section 3.4. Decisions Binding.
All determinations and decisions made by the Committee
pursuant to the provisions of the Plan and all related orders and resolutions
of the Board of Directors shall be final, conclusive and binding on all
persons, including the Company, its employees, officers and stockholders, the
Affiliates, their respective employees, officers and stockholders, the
Participants, and their estates, representatives and beneficiaries.
ARTICLE IV
SHARES SUBJECT TO PLAN
Unless otherwise determined by the Board of Directors, the
only stock which may be subject to an Award under the Plan shall be shares of
Class A Stock. Subject to the adjustment as provided in Article VIII, the
maximum number of shares reserved and available for Awards under the Plan shall
be [_______________________________] shares, consisting of authorized but
unissued shares, shares held in the Company's treasury, or a combination of the
two (the "Shares"). If any shares to which an Award relates are forfeited or
the Award is settled or terminated without a distribution of Shares (whether or
not cash, other Awards, or other property is distributed with respect to such
award), any Shares counted against the number of shares reserved under the
Plan, shall again be available for Awards under the Plan to the extent of such
forfeiture settlement or termination.
ARTICLE V
ELIGIBILITY AND PARTICIPATION
Section 5.1. Eligibility.
Awards may be granted only to individuals who are non-employee
Directors of the Company or any Affiliate. No Award shall be issued to any
Director who is a member of the Committee.
Section 5.2. Participation.
Participants in the Plan shall be those eligible Directors
whom the Committee shall designate from time to time to be granted Awards in
accordance with the provisions of the Plan.
<PAGE> 5
ARTICLE VI
STOCK OPTIONS
Section 6.1. Grant of Options.
(a) Each fiscal year, each non-employee Director who
beneficially owns less than one percent (1%) of the Company's Common Stock
shall be issued Options with a value (determined by the Committee in its sole
discretion) equal to fifty percent (50%) of such Director's annual retainer in
lieu of a cash payment of such portion of the annual retainer. Each
non-employee Director who beneficially owns less than one percent (1%) of the
Company's Common Stock shall be permitted to elect to receive Options in lieu
of all or any portion of the remainder of his or her annual retainer otherwise
payable in cash, such Options to be of equal value (as determined by the
Committee in its sole discretion) to that portion of the annual retainer so
waived. Options issued in lieu of cash payment of any portion of a Director's
annual retainer shall be issued at such time as the annual retainer would
otherwise be paid by the Company. The Company may grant additional Options at
any time and from time to time to any eligible Director with respect to such
number of Shares and upon such terms as the Committee shall determine.
(b) Options granted under the Plan shall be either
nonqualified stock options ("NQSO's"). The maximum number of Shares with
respect to which an Option may be granted to any single Participant in any
single taxable year of the Company shall be [___________________________],
subject to adjustment as provided in Section 8.1.
Section 6.2. Stock Option Agreement.
Each Option granted hereunder shall be evidenced by a written
Stock Option Agreement that shall specify the number of Shares which are
subject to the Option, the Option Price, the installments, if any, in which the
Option shall vest and become exercisable, the date of expiration of the Option
and such other terms and conditions as the Committee shall determine and as are
consistent with the provisions of the Plan. Notwithstanding the foregoing, any
Options issued in lieu of cash payment of any portion of a Director's annual
retainer shall be fully vested and exercisable at all times.
Section 6.3. Option Price.
(a) The Option Price shall be established by the Committee
and set forth in the Stock Option Agreement applicable to an Option.
(b) In no event shall the Option Price designated by the
Committee with respect to any NQSO be less than seventy-five percent (75%) of
the Fair Market Value of the Shares subject to the option as of the date that
such Option is granted or, if greater, the par value of such Shares.
<PAGE> 6
Section 6.4. Expiration of Options.
Subject to the provisions of Section 6.8, each Option granted
hereunder shall expire at such time as the Committee shall designate in the
Stock Option Agreement applicable to such Option; provided, however, that it
shall in any event expire no later than the tenth (1th) anniversary of the date
it is granted.
Section 6.5. Exercise of Options.
Subject to Section 6.2, each Option granted hereunder shall be
exercisable at such times and upon such conditions as are designated in the
Stock Option Agreement applicable to such Option. To exercise an Option in
whole or in part, a Participant shall give the Company a written notice of
exercise which specifies the number of Shares to be purchased and is
accompanied by payment of the full Option Price for such Shares. An Option may
be exercised with respect to fewer than all the Shares with respect to which it
is then exercisable, but it may not be exercised with respect to less than a
full Share.
Section 6.6. Payment for Shares.
Upon exercise of an Option with respect to any Shares, payment
of the Option Price may be made (i) by delivering to the Company cash or its
equivalent; (ii) by transferring and delivering to the Company shares of the
Class A Stock, which shall be valued at their Fair Market Value; (iii) by any
other method that may be authorized by the Committee from time to time with
respect to such Option; or (iv) by any combination of the foregoing methods of
payment.
Section 6.7. Termination of Employment.
(a) Unless otherwise determined by the Committee, if a
Participant ceases to be a Director as a result of his or her death or
Disability each Option of the Participant may be exercised only to the extent
of (i) the number of Shares with respect to which such Option was exercisable
on the date of such termination of employment plus (ii) the number of
additional Shares with respect to which such Option would have been exercisable
upon the vesting of the next scheduled installment, if any, of the NQSO as
provided in the applicable Stock Option Agreement. In the event of the
Participant's death or Disability, the NQSO shall remain exercisable to such
extent for a period of two (2) years after the date the Participant ceases to
be a Director.
(b) Unless otherwise determined by the Committee, if a
Participant ceases to be a Director of the Company for any reason other than
death or Disability, all rights of the Participant in any NQSO, to the extent
they have not already expired or been exercised, shall terminate and be
extinguished immediately upon such termination of employment.
<PAGE> 7
Section 6.8. Restrictions on Transfer of Options.
Unless otherwise designated by the Committee in the Stock
Option Agreement applicable to an Option, such Option may not be sold,
transferred, pledged, hypothecated, assigned or otherwise alienated or disposed
of, other than by will or by the laws of descent and distribution. All Options
exercisable during a Participant's lifetime shall be exercised only by such
Participant.
ARTICLE VII
STOCK AND RESTRICTED STOCK AWARDS
Section 7.1. Stock Awards.
(a) Each Director who is not an employee of the CMP Group
shall receive an Award of [ ] shares of Class A Stock upon such
Director's initial election to the Board of Directors.
(b) At the sole discretion of the Committee, each Director
who is not an employee of the CMP Group may be given the opportunity to elect
to receive all or any portion of his or her Director's fees (other than amounts
paid to reimburse the Director for expenses incurred) in the form of shares of
Class A Stock.
Section 7.2. Awards of Restricted Stock.
Awards of Restricted Stock may be granted under the Plan in
such form and on such terms and conditions as the Committee may from time to
time approve including, without limitation, restrictions on the sale,
assignment, transfer or other disposition or encumbrance of such shares during
the Restricted Period and the requirement that the Participant forfeit such
shares back to the Company without any consideration paid by the Company
therefor upon termination of employment within the Restricted Period.
Restricted Stock may be granted alone or in addition to other Awards under the
Plan.
Section 7.3. Restricted Period.
The Committee shall establish the Restricted Period with
respect to each Award of Restricted Stock. The Committee may, in its sole
discretion, at the time an Award of Restricted Stock is made, prescribe
conditions for the lapse or termination of restrictions upon the satisfaction
of other conditions in addition to or other than the expiration of the
Restricted Period with respect to all or any portion of the Restricted Stock.
The Committee may also, in its sole discretion, shorten or terminate the
Restricted Period or waive any conditions for the lapse or termination of
restrictions with respect to all or any portion of the Restricted Stock.
Restricted Stock that is not yet vested may be transferred by a Participant to
a trust for the benefit of the Participant or a member of such Participant's
immediate family, but may not otherwise be sold, assigned, transferred, made
subject to gift, or otherwise disposed of, mortgaged, pledged or encumbered.
<PAGE> 8
Except as otherwise provided by the Committee pursuant to any
Restricted Stock Award, a Participant shall cease vesting in all or any portion
of an Award as of the date he or she ceases to be a Director for whatever
reason. Any Awards that are not vested as of the date of such termination
shall be forfeited. The Committee may, in its discretion, also provide that a
Participant shall vest in all or any portion of his Award in which he or she
would otherwise have vested at the end of the year in which he or she ceased
being a Director. Any Awards not so vested shall be forfeited.
Section 7.4. Rights of Holders of Restricted Stock.
Except for the restrictions described in Section 7.2, the
Participant shall be the owner of the Restricted Stock and shall have all the
rights of a shareholder, including the right to receive dividends paid on such
Restricted Stock and the right to vote such Restricted Stock.
Section 7.5. Delivery of Restricted Stock.
Restricted Stock awarded to a Participant under the Plan may
be held under the Participant's name in a book entry account maintained by the
Company or, if not so held, stock certificates for Restricted Stock awarded
pursuant to the Plan may be registered in the name of the Participant and
issued and deposited, together with a stock power endorsed in blank, with the
Company or an agent appointed by the Company and shall bear an appropriate
legend restricting the transferability thereof. Subject to Section 9.2 below,
a Participant shall be entitled to delivery of stock certificates only when
they become vested in accordance with the terms of his or her Award and upon
the expiration or termination of the Restricted Period and the satisfaction of
any other conditions prescribed by the Committee.
Section 7.6. Forfeitures.
Except to the extent that the Participant has vested in his
Restricted Stock, each Participant's right to Restricted Stock shall be
forfeited if and when such Participant ceases to be a Director of the Company
or when any prescribed condition for the lapse or termination of restrictions
is not satisfied. If forfeited, all such Restricted Stock shall become the
property of the Company and shall again immediately become available for award
under the Plan and all of the rights of such Participant to such Restricted
Stock and as a stockholder shall terminate without further obligation on the
part of the Company.
Section 7.7. Maximum Individual Awards.
No individual may be granted more than [ ]
Shares of Class A Stock or Restricted Stock, in any given year. The Share
amounts in this Section 7.7 are subject to adjustment under Section 10 and are
subject to the Plan maximum under Article III.
<PAGE> 9
Section 7.8. Award Agreements.
Each Award granted hereunder shall be evidenced by a written
Award Agreement that shall specify the number of Shares subject to the Award,
the installments, if any in which the Award shall vest and become exercisable,
the date of the expiration of such Award, and such other terms and conditions
as the Committee shall determine.
ARTICLE VIII
ADDITIONAL PROVISIONS APPLICABLE TO AWARDS
Section 8.1. Issuance of Shares.
(a) As soon as practicable after the exercise of an Option or
settlement of any other Award, including full payment for the Shares purchased
pursuant thereto and the satisfaction of any withholding-tax liability arising
with respect to the settlement of any Option or Award, the Company shall duly
issue such Shares to the Participant and shall cause to be delivered to the
Participant a stock certificate or certificates representing such Shares and
bearing such restrictive legends as the Committee may deem necessary or
appropriate to ensure compliance with all applicable laws, rules and
regulations.
(b) Notwithstanding anything to the contrary contained
herein, the Company may, in its discretion, defer for not more than six (6)
months the issuance and delivery of Shares otherwise deliverable hereunder
until completion of the process of listing the Shares on a national exchange or
the filing, registration or other qualification of the Shares under any state
or federal law, rule or regulation as the Company may deem appropriate,
provided that the Company diligently pursues such listing, registration or
qualification. The Company may require any Participant to make such
representations and furnish such information as the Company may deem
appropriate in connection with the issuance or delivery of Shares, in
compliance with all applicable laws, rules and regulations.
(c) The Committee may impose such restrictions on any Shares
issued in settlement of any award as it may deem advisable, including without
limitation restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, under any blue-sky or state securities laws applicable to
such Shares and under any applicable stockholders or other agreement.
Section 8.2. Taxes and Withholding.
(a) As a precondition to the delivery of any Shares or other
payment in settlement of any Award, the Company shall have the right and power
to deduct or withhold, or require a Participant to remit to the Company, an
amount sufficient to satisfy federal, state and local taxes, domestic or
foreign, that are required by law or regulation to be withheld by the Company
upon delivery of Shares or other payment under any Award. The Participant may
discharge such obligation in whole or in part with respect to the minimum
withholding-tax liability arising upon the settlement of any Award (but no more
than such minimum) (a) by transferring and delivering to the Company shares of
the Class A Stock, which shall be valued at their Fair Market Value; (b) with
the prior approval of the Company, by authorizing the Company in writing to
deduct and retain Shares, valued at their Fair Market Value, as of the date of
exercise, from the Shares otherwise to be issued upon settlement; or (c) by any
combination of the foregoing methods of payment.
<PAGE> 10
(b) A Participant who files an election with the Internal
Revenue Service to include the fair market value of any Award in gross income
at such time as may be permitted under Code Section 83(b) shall promptly
furnish the Company with a copy of such election together with the amount of
any federal, state, local or other taxes required to be withheld to enable the
Company to claim an income tax deduction with respect to such election.
Section 8.3. Changes in Capital Structure.
In the event that the Company hereafter declares a dividend
payable in, or subdivides or combines, shares of the Class A Stock, or engages
in a recapitalization, reorganization, merger, consolidation, split-up,
transfer of assets, combination or exchange of shares of Common Stock or any
other event affecting the Common Stock, the Committee shall make appropriate
adjustment in the number (including without limitation the aggregate numbers
specified in Article III and Section 5.1(b)) and kind of shares that are or may
become subject to Awards granted or to be granted hereunder, and in the
exercise Price of Shares which are subject to Awards granted hereunder, and
shall take such other action as in its judgment shall be necessary or
appropriate to equitably preserve each Participant's rights with respect to
such Awards substantially proportionate to his or her respective rights
existing prior to such event. The decision of the Committee with respect to
any matter referred to in this Section 9.4 shall be conclusive and binding upon
Participants. The Company shall give each Participant written notice of any
adjustments to an Award of the Participant or the terms and conditions thereof
made pursuant to this Section 9.4. Nothing herein is intended to preserve a
Participant's equity interest in the Company against dilution resulting from
the issuance of additional securities by the Company subsequent to the grant of
an Option.
ARTICLE IX
BENEFICIARY DESIGNATION
Each Participant may, from time to time, designate a
beneficiary or beneficiaries (who may be named contingently or successively)
who shall acquire the Participant's rights under the Plan in case the
Participant dies before exercising all of such rights. A Participant may
designate such beneficiary or beneficiaries by giving the Company written
notice thereof in a form prescribed by the Company. Each such designation
shall revoke all prior designations by the Participant, and such notice shall
be effective only when given to the Company during the Participant's lifetime.
In the absence of an effective designation or if all duly designated
beneficiaries predecease the Participant, any rights remaining unexercised at
the Participant's death shall be exercised by the Participant's estate. In the
event of a Participant's death, all actions that the Participant would
otherwise be entitled to take under the Plan may be taken by the Participant's
beneficiary or estate, as the case may be, and all references in this Plan to
"Participant" shall, under such circumstances, be deemed to include such
beneficiary or estate.
<PAGE> 11
ARTICLE X
RIGHTS OF PARTICIPANTS
No Participant shall acquire any rights as a stockholder of
the Company hereunder unless and until, and except to the extent that, a stock
certificate representing Shares duly purchased by such Participant pursuant to
any Award has been issued to such Participant. Nothing in the Plan shall be
deemed to confer upon any Participant the right to continue as a Director with
the CMP Group. Except as provided in Section 5.1, no Director of the CMP
Group shall have the right to be selected to receive any Award under the Plan,
and the granting of any Award to a Participant shall not confer on the
Participant any right to be granted any additional Award in the future.
ARTICLE XI
CHANGE IN CONTROL
Section 11.1. Treatment of Outstanding Awards.
In the event that there is a Change In Control and a
Participant ceases to be a Director with the CMP Group within three (3) years
years after such Change In Control, then and in that event the rights of the
Participant under all of his or her Awards shall immediately become fully
vested and all such Awards shall remain fully exercisable until their
respective expiration dates as set forth in the Award Agreements applicable
thereto.
Section 11.2. No Amendment.
Notwithstanding any other provision of the Plan or any
provision of any Award Agreement, the provisions of this Article XII may not be
amended, modified, suspended or terminated in a manner that adversely affects
any Award theretofore granted under the Plan to any Participant without the
prior written consent of such Participant. In the event of a Change In
Control, no changes in the Plan and no adjustments, determinations or other
exercises of discretion that are made, pursuant to the Plan or otherwise, by
the Committee subsequent to such Change In Control shall be effective if and to
the extent that they would have the effect of diminishing the rights of any
Participant under the Plan.
<PAGE> 12
ARTICLE XII
AMENDMENT, MODIFICATION AND TERMINATION
Section 12.1. Amendment.
Subject to the provisions of Section 12.2 and Section 13.2,
the Board of Directors may at any time and from time to time amend, modify,
suspend or terminate the Plan in whole or in part; provided, however, that, in
the event that any securities of the Company are publicly held, no amendment
which renders the grant or exercise of an Award non-exempt under Rule 16b-3 of
the Securities Exchange Act of 1934, including any successor to such Rule,
shall be made or be effective.
Section 12.2. Awards Previously Granted.
Notwithstanding the provisions of Section 13.1, no amendment,
modification, suspension or termination of the Plan shall be effective to the
extent it adversely affects in any material way any Award previously granted
under the Plan, unless the Participant holding such Award consents in writing
thereto. Subject to the terms of the Plan, the Committee may modify the form,
terms and conditions of any outstanding Award in such manner, not unfavorable
to the Participant, as the Committee in its discretion may determine and, with
respect to any Participant subject to foreign tax laws or regulations, the
Committee may vary the form, terms and conditions of any Award as the Committee
in its discretion may deem necessary or advisable to allow the Participant to
qualify for favorable tax treatment under such foreign tax laws or regulations.
ARTICLE XIII
INDEMNIFICATION
Any claim under the Plan shall be solely the obligation of the Company. No
member of the Committee shall be personally liable by reason of any contract or
other instrument executed by such member (or on behalf of such member) in his
or her capacity as a member of the Committee or by reason of any mistake of
judgment made by him or her in good faith in such capacity. The Company shall
indemnify each employee, officer or director of the Company to whom any duty or
power relating to the administration or interpretation of the Plan may be
allocated or delegated and shall hold such person harmless against any loss,
liability, claim, cost or expense (including reasonable attorneys fees and any
sum paid in settlement of a claim with the approval of the Board of Directors)
incurred by or asserted against such person as a result of or arising out of
any act or omission to act in connection with the Plan, unless arising out of
such person's fraud or bad faith. The right of indemnification provided for in
this Article XI shall be in addition to any rights of indemnification to which
such person may be entitled under the certificate of incorporation or bylaws of
the Company, as a matter of law or otherwise, or any power that the Company may
have to indemnify such person or hold him or her harmless.
<PAGE> 13
ARTICLE XIV
DURATION OF PLAN
This amendment and restatement of the Plan shall be effective
on the date of its adoption by the Board of Directors and shall remain in
effect, subject to the right of the Board of Directors to amend, modify,
suspend or terminate the Plan pursuant to Article X , until all Shares have
been issued in accordance herewith; provided, however, that in no event may an
Award be granted under the Plan after December 31, 2005. Any Awards granted
prior to approval of the Plan by the stockholders of the Company shall be made
subject to such approval.
ARTICLE XV
SUCCESSORS
All obligations of the Company under the Plan with respect to
Awards granted hereunder shall be binding on any successor to the Company and
shall survive any purchase, merger, consolidation or other disposition of all
or substantially all of the business and/or assets of the Company.
ARTICLE XVI
MISCELLANEOUS
Section 16.1. Other Benefit Plans.
Neither the grant of an Award nor any income recognized upon
exercise of an Award shall be deemed compensation to a Participant for the
purposes of any other employee benefit plan of the CMP Group, unless such plan
specifically so provides in referring to the Plan by name or the Board of
Directors determines otherwise.
Section 16.2. Applicable Law.
To the extent not preempted by federal law, the Plan and all
agreements hereunder (including all Award Agreements) shall be governed by and
construed and enforced in accordance with the laws of the State of New York,
without reference to its principles regarding choice or conflicts of law.
Section 16.3. Severability.
In the event that any provision of the Plan shall be held for
any reason to be illegal or invalid under applicable law, such provision shall
be ineffective to the extent of such illegality or invalidity without affecting
the remainder of such provision or any other provision of the Plan.
Section 16.4. Gender and Number.
Except when otherwise indicated by the context, references
herein to one gender shall include the other genders, and references herein to
the singular or plural shall include the plural or singular.
Section 16.5. Headings.
The headings of the Articles and Sections of the Plan are for
convenience of reference only and shall not be considered in interpreting or
construing the Plan.
<PAGE> 1
Exhibit 10.22
CMP MEDIA INC.
STOCK INCENTIVE PLAN
ARTICLE I
ESTABLISHMENT AND PURPOSE
This plan shall be known as the CMP MEDIA INC. STOCK INCENTIVE
PLAN (the "Plan"). This Plan constitutes an amendment and complete restatement
of the CMP Media Inc. 1996 Stock Option Plan. The purpose of the Plan is (a) to
secure for the CMP Group and its stockholders the long-term benefits of aligning
the personal interests of key employees with those of the Company through the
award of equity-based compensation; (b) to aid the CMP Group in attracting and
retaining key employees; and (c) to motivate key employees to take a long-term
view of the best interests of the CMP Group and contribute actively to its
future growth in sales, profits and profitability, consistent with its corporate
principles.
ARTICLE II
DEFINITIONS
"Affiliates" shall mean shall mean all entities controlling,
controlled by or under common control with the Company.
"Award" shall mean any Option, Performance Award, Stock
Appreciation Right, Restricted Stock, Deferred Stock, Dividend Equivalent or any
other stock-based award or interest granted to a Participant under the Plan.
"Award Agreement" shall mean the agreement entered into
between the Company and a Participant setting forth the terms and conditions
applicable to an Award granted to such Participant under the Plan, including any
Stock Option Agreement entered into in accordance with Section 6.2.
"Board of Directors" shall mean the Board of Directors of the
Company.
"Change In Control" shall mean a direct or indirect transfer
of fifty percent (50%) or more of the voting control of the Company or the sale
of substantially all of the assets of the Company, in one or more transactions,
to (a) one or more persons who are not (i) members of the Leeds Family or (ii)
spouses, children or grandchildren of members of the Leeds Family and/or (b) one
or more entities which are not controlled by (i) one or more members of the
Leeds Family or (ii) one or more of the spouses, children or grandchildren of
members of the Leeds Family.
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"Class A Stock" shall mean the Class A Common Stock of the
Company.
"Closing Price" shall mean the last-quoted price at which
shares of Class A Stock were traded at the close of business on a national
securities exchange or the National Association of Securities Dealers Automated
Quotation National Market System.
"CMP Group" shall mean the Company or any of its Affiliates.
"Code" shall mean the Internal Revenue Code of 1986, as
amended
"Committee" shall have the meaning specified in Section 3.1.
"Common Stock" shall mean all the classes of the Common Stock
of the Company collectively.
"Company" shall mean CMP Media Inc., a Delaware corporation,
or any successor thereto.
"Disability" shall mean a physical or mental impairment, as a
result of which a Participant shall have been unable, with or without reasonable
accommodation, to perform the essential functions of his or her employment
position for a period of at least sixteen (16) weeks during any 12-month period.
"Dismissal Without Cause" shall mean the involuntary
termination of a Participant's employment by the CMP Group on any grounds other
than "cause" or the Disability of the Participant. For the purposes hereof,
"cause" shall mean (a) the willful and continued failure of the Participant
substantially to perform his or her duties as an employee of the CMP Group or
comply with the written policies of the CMP Group after the Company (or the
Affiliate employing the Participant) has delivered to him or her a written
demand for substantial performance or compliance that specifies such failure in
reasonable detail; (b) illegal conduct or gross misconduct by the Participant,
in either case that is willful and results (or is reasonably likely to result)
in material damage to the business or reputation of the CMP Group; or (c) the
resignation by the Participant from his or her employment following his or her
act or omission which would constitute grounds for dismissal for "cause"
hereunder. No act or failure to act on the part of a Participant (other than
non-compliance with lawful instructions given to him or her by the CMP Group)
shall be considered "willful" unless it is done or omitted to be done by him or
her in bad faith or without reasonable belief that such action or omission was
in the best interests of the CMP Group.
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"Fair Market Value" shall mean the fair market value of a
share of Class A Stock, which shall be (a) the Closing Price on the trading day
immediately preceding the date of determination of fair market value [CMP MAY
CONSIDER USING A TEN (OR OTHER) DAY CLOSING AVERAGE] or (b) if the Company is
privately held and the Class A Stock is not publicly traded, the fair market
value of a share of Class A Stock as determined by such method as the Committee
shall reasonably designate.
"ISO" shall mean an Option which is an incentive stock option
within the meaning of Section 422 of the Code.
"Leeds Family" shall mean Gerard G. Leeds, Liselotte J. Leeds,
Michael S. Leeds, Richard A. Leeds, Daniel H. Leeds, Greg Jobin-Leeds and
Jennifer Leeds-Lukehart.
"NQSO" shall mean an Option other than an ISO.
"Option" shall mean the right of a Participant to purchase any
Share pursuant to the Plan.
"Option Price" shall mean the price at which a Participant may
purchase a Share pursuant to an Option.
"Parent Corporation" shall mean a parent corporation as
defined in Section 424(e) of the Code.
"Participant" shall mean a person who holds an Option granted
to him or her under the Plan.
"Resignation For Good Reason" shall mean a Participant's
resignation from his or her employment with the CMP Group after the CMP Group
has, without the Participant's consent, (i) materially reduced his or her
package of compensation and benefits, (ii) materially diminished his or her
position, authority, duties or responsibilities, or (iii) required him or her to
report regularly to an office located more than fifty (50) miles from the office
of the CMP Group to which he or she theretofore reported.
"Restricted Period" shall mean the period during which a
Participants rights to a Restricted Stock Award are restricted pursuant to
Section 7.2.
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"Restricted Stock" shall mean an Award of the right to receive
any Shares subject to restrictions, if any, as provided in Article VII.
"Retirement" shall mean the retirement of a Participant from
employment with the Company upon or after attaining the age of sixty-five (65),
or such earlier age as the Committee may in its sole discretion approve.
"Share" shall have the meaning specified in Article IV.
"Subsidiary" means a subsidiary corporation, as defined in
Section 424(f) of the Code.
ARTICLE III
ADMINISTRATION
Section 3.1. The Committee.
The Plan shall be administered by a Stock Compensation
Committee consisting of not less than three (3) persons, who shall not be
eligible to be granted Awards under this Plan while serving as members thereof
(the "Committee"). The Committee shall be designated by the Board of Directors,
which may from time to time designate members in substitution for members
previously designated and may fill vacancies, however caused, in the Committee.
Section 3.2. Authority of the Committee.
Except as limited by law or by the certificate of
incorporation or bylaws of the Company as amended from time to time, and subject
to all the provisions of the Plan, the Committee shall have full and
discretionary power to administer the Plan, including without limitation the
power (a) to select the persons who shall become Participants in the Plan; (b)
to determine the terms and conditions of each Award, including but not limited
to the price or prices at which Shares may be purchased from the Company,
consistent with all of the provisions of the Plan; (c) to construe and interpret
the provisions of the Plan and any agreement or instrument entered into under
the Plan; (d) to establish, amend, rescind or waive rules and regulations for
the Plan's administration; (e) subject to the provisions of Article X, to amend
the terms and conditions of any outstanding Award to the extent such amended
terms and conditions are consistent with the provisions of the Plan and are
within the power of the Committee as provided herein; and (f) to take all such
other action and make all such other determinations as may be necessary or
advisable in order to administer the provisions of the Plan and effectuate the
purposes hereof.
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Section 3.3. Conduct of Business.
The Committee shall hold its meetings at such times and places
as it may determine. Meetings need not be in person and prior notice of any
meetings shall not be required. The Committee may delegate its authority and
duties hereunder to the extent permitted by law.
Section 3.4. Decisions Binding.
All determinations and decisions made by the Committee
pursuant to the provisions of the Plan and all related orders and resolutions of
the Board of Directors shall be final, conclusive and binding on all persons,
including the Company, its employees, officers and stockholders, the Affiliates,
their respective employees, officers and stockholders, the Participants, and
their estates, representatives and beneficiaries.
ARTICLE IV
SHARES SUBJECT TO PLAN
Unless otherwise determined by the Board of Directors, the
only stock which may be subject to an Award under the Plan shall be shares of
Class A Stock. Subject to the adjustment as provided in Section 9.5, the maximum
number of shares of Class A Stock reserved and available for Awards under the
Plan shall be 1,132,560 shares, consisting of authorized but unissued shares,
shares held in the Company's treasury, or a combination of the two (the
"Shares"). If any Shares to which an Award relates are forfeited or any Award is
settled or terminated without a distribution of Shares (whether or not cash,
other Awards, or other property is distributed with respect to such award), any
Shares counted against the number of Shares reserved under the Plan, shall again
be available for Awards under the Plan to the extent of such forfeiture
settlement or termination.
ARTICLE V
ELIGIBILITY AND PARTICIPATION
Section 5.1. Eligibility.
Awards may be granted only to individuals who are officers or
other key employees (including employees who are also directors) of the CMP
Group. No Award shall be issued to any employee who is a member of the
Committee.
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Section 5.2. Participation.
Participants in the Plan shall be those eligible employees
whom the Committee shall designate from time to time to be granted Awards in
accordance with the provisions of the Plan.
ARTICLE VI
STOCK OPTIONS
Section 6.1. Grant of Options.
(a) Subject to all the provisions of the Plan, the Company may
grant an Option at any time and from time to time to any eligible employee with
respect to such number of Shares and upon such terms as the Committee shall
determine.
(b) Options granted under the Plan may be either nonqualified
stock options ("NQSO's") or incentive stock options ("ISO's") intended to meet
the requirements of Section 422 of the Code. The maximum number of Shares with
respect to which an Option may be granted to any single Participant in any
single taxable year of the Company shall be 357,500, subject to adjustment
as provided in Section 9.5.
(c) Notwithstanding any provision of the Plan to the contrary,
no ISO may be granted more than ten years after the date the Plan is adopted.
(d) The aggregate Fair Market Value (determined as of the date
the option is granted) of the Shares for which any Participant may be granted
ISO's which become exercisable for the first time by such participant in any
calendar year under this and any other stock option plan maintained by the
Company or by any Subsidiary or Parent Corporation of the Employer shall not
exceed $100,000.
Section 6.2. Stock Option Agreement.
Each Option granted hereunder shall be evidenced by a written
Stock Option Agreement that shall specify the number of Shares which are subject
to the Option, the Option Price, the installments, if any, in which the Option
shall vest and become exercisable, the date of expiration of the Option and such
other terms and conditions as the Committee shall determine and as are
consistent with the provisions of the Plan.
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Section 6.3. Option Price.
(a) The Option Price shall be established by the Committee and
set forth in the Stock Option Agreement applicable to an Option.
(b) In no event shall the Option Price designated by the
Committee with respect to any NQSO be less than seventy-five percent (75%) of
the Fair Market Value of the Shares subject to the option as of the date that
such Option is granted or, if greater, the par value of such Shares.
(c) In no event shall Option Price be designated by the
Committee with respect to any ISO be less than the Fair Market Value of the
Shares subject to the Option as of the date such Option is granted or, if
greater, the par value of such Shares. Notwithstanding the foregoing, no ISO
shall be granted to any employee who, at the time the Option is granted, owns
(directly, or with the meaning of Section 424(d) of the Code) more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of any Subsidiary or Parent Corporation thereof, unless the Option
Price under such Option is at least one hundred and ten percent (110%) of the
Fair Market Value of the Shares subject to the Option on the date the Option is
granted.
Section 6.4. Expiration of Options.
Subject to the provisions of Section 6.8, each Option granted
hereunder shall expire at such time as the Committee shall designate in the
Stock Option Agreement applicable to such Option; provided, however, that it
shall in any event expire no later than the tenth (10th) anniversary of the date
it is granted. Notwithstanding the foregoing, any ISO granted to any employee
who, at the time the Option is granted, owns (directly, or with the meaning of
Section 424(d) of the Code) more than ten percent (10%) of the total combined
voting power of all classes of stock of the Employer or of any Subsidiary or
Parent Corporation, shall expire no later than the fifth (5th) anniversary of
the date it is granted.
Section 6.5. Exercise of Options.
Each Option granted hereunder shall be exercisable at such
times and upon such conditions as are designated in the Stock Option Agreement
applicable to such Option. To exercise an Option in whole or in part, a
Participant shall give the Company a written notice of exercise which specifies
the number of Shares to be purchased and is accompanied by payment of the full
Option Price for such Shares. An Option may be exercised with respect to fewer
than
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all the Shares with respect to which it is then exercisable, but it may not be
exercised with respect to less than a full Share.
Section 6.6. Payment for Shares.
Upon exercise of an Option with respect to any Shares, payment
of the Option Price may be made (i) by delivering to the Company cash or its
equivalent; (ii) by transferring and delivering to the Company previously owned
Shares, which shall be valued at their Fair Market Value; (iii) by any other
method that may be authorized by the Committee from time to time with respect to
such Option; or (iv) by any combination of the foregoing methods of payment.
Section 6.7. Termination of Employment.
(a) Unless otherwise determined by the Committee, if a
Participant's employment with the CMP Group terminates as a result of his or her
death, Disability or Dismissal Without Cause, each Option of the Participant may
be exercised only to the extent of (i) the number of Shares with respect to
which such Option was exercisable on the date of such termination of employment,
plus (ii) with respect to NQSOs, the number of additional Shares with respect to
which such Option would have been exercisable upon the vesting of the next
scheduled installment, if any, of the NQSO, as provided in the applicable Stock
Option Agreement.
(b) Unless otherwise determined by the Committee, (i) the
event of the Participant's death or Disability, the Option may remain
exercisable to such extent for a period of two (2) years after the date of
termination of employment or until the expiration date of the Option, whichever
is earlier, and (ii) the event of the Participant's Dismissal Without Cause, the
Option may remain exercisable to such extent for a period of six (6) months
after the date of termination of employment or until the expiration date of the
Option, whichever is earlier.
(c) Unless otherwise determined by the Committee, if a
Participant's employment with the CMP Group terminates as a result of his or her
Retirement, each Option of the Participant may remain exercisable and, to the
extent not already vested, may continue to vest in accordance with the Vesting
Schedule for a period of three (3) years after the date of termination of
employment or until the expiration date of the Option, whichever is earlier.
(d) Unless otherwise determined by the Committee, if a
Participant's employment with the CMP Group terminates for any reason other than
death, Disability, Dismissal Without Cause or Retirement, all rights of the
Participant in any Option, to the extent
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they have not already expired or been exercised, shall terminate and be
extinguished immediately upon such termination of employment.
(e) With respect to any Option that is an ISO, and is not
exercised prior to the end of the three (3) month period following the date upon
which the Participant terminates employment, or in the event the Participant
terminates employment by reason of his or her Disability, the end of the one
year period following such termination of employment period, the Option shall
cease to be an ISO.
Section 6.8. Restrictions on Transfer of Options.
Unless otherwise designated by the Committee in the Stock
Option Agreement applicable to an Option, such Option may not be sold,
transferred, pledged, hypothecated, assigned or otherwise alienated or disposed
of, other than by will or by the laws of descent and distribution. All Options
exercisable during a Participant's lifetime shall be exercised only by such
Participant.
ARTICLE VII
RESTRICTED STOCK
Section 7.1. Awards of Restricted Stock.
Awards of Restricted Stock may be granted under the Plan in
such form and on such terms and conditions as the Committee may from time to
time approve, including, without limitation, restrictions on the sale,
assignment, transfer or other disposition or encumbrance of such Shares during
the Restricted Period and the requirement that the Participant forfeit such
Shares back to the Company without any consideration paid by the Company
therefor upon failure to satisfy the applicable performance goals within the
Restricted Period. Restricted Stock may be granted alone or in addition to other
Awards under the Plan.
Section 7.2. Restricted Period.
The Committee shall establish the Restricted Period with
respect to each Award of Restricted Stock. The Committee may, in its sole
discretion, at the time an Award of Restricted Stock is made, prescribe
conditions for the lapse or termination of all or a portion of the restrictions
upon the satisfaction of performance goals prior to the expiration of the
Restricted Period. The Committee may also, in its sole discretion, shorten or
terminate the Restricted Period or waive any conditions for the lapse or
termination of restrictions with respect to all or any portion of the Restricted
Stock. Restricted Stock that is not yet vested may be transferred by
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a Participant to a trust for the benefit of the Participant or a member of such
Participant's immediate family, but may not otherwise be sold, assigned,
transferred, made subject to gift, or otherwise disposed of, mortgaged, pledged
or encumbered.
Except as otherwise provided by the Committee pursuant to any
Restricted Stock Award, a Participant shall cease vesting in all or any portion
of an Award as of the date of his termination of employment for whatever reason.
Any Awards that are not vested as of the date of such termination shall be
forfeited, provided the Committee may, in its discretion, provide that a
Participant whose employment is terminated by the Company without cause and/or
following a Change in Control may vest in all or any portion of his Award. Any
Awards not so vested shall be forfeited.
Section 7.3. Rights of Holders of Restricted Stock.
Except for the restrictions described in Section 7.2, the
Participant shall be the owner of the Restricted Stock and shall have all the
rights of a shareholder, including the right to receive dividends paid on such
Restricted Stock and the right to vote such Restricted Stock.
Section 7.4. Delivery of Restricted Stock.
Restricted Stock awarded to a Participant under the Plan may
be held under the Participant's name in a book entry account maintained by the
Company or, if not so held, stock certificates for Restricted Stock awarded
pursuant to the Plan may be registered in the name of the Participant and issued
and deposited, together with a stock power endorsed in blank, with the Company
or an agent appointed by the Company and shall bear an appropriate legend
restricting the transferability thereof. Subject to Section 9.2 below, a
Participant shall be entitled to delivery of stock certificates only when they
become vested in accordance with the terms of his or her Award and upon the
expiration or termination of the Restricted Period and the satisfaction of any
other conditions prescribed by the Committee.
Section 7.5. Forfeitures.
Except to the extent that the Participant has vested in his
Restricted Stock, each Participant's right to Restricted Stock shall be
forfeited if and when such Participant ceases to be an employee of the Company
or when any prescribed condition for the lapse or termination of restrictions is
not satisfied. If forfeited, all such Restricted Stock shall become the property
of the Company and shall again immediately become available for award under the
Plan and all of the rights of such Participant to such Restricted Stock and as a
stockholder shall terminate without further obligation on the part of the
Company.
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ARTICLE VIII
ADDITIONAL AWARDS
Section 8.1. Performance Awards.
The Committee is authorized to grant Performance Awards to
Participants on the following terms and conditions:
(a) Awards and Conditions. A Performance Award shall confer
upon the Participant rights, valued as determined by the Committee, and payable
to, or exercisable by, the Participant to whom the Performance Award is granted,
in whole or in part, as determined by the Committee, conditioned upon the
achievement of performance criteria determined by the Committee.
(b) Other Terms. A Performance Award shall be denominated in
Shares and may be payable in cash, Shares, other Awards, or other property, and
have such other terms as shall be determined by the Committee.
Section 8.2. Dividend Equivalents.
The Committee is authorized to grant Dividend Equivalents to
Participants. The Committee may provide that Dividend Equivalents shall be paid
or distributed when accrued or shall be deemed to have been reinvested in
additional Shares or Awards, or otherwise reinvested.
Section 8.3. Deferred Stock.
The Committee is authorized to grant Deferred Stock to
Participants, on the following terms and conditions:
(a) Award and Restrictions. Subject to Section 9.2, delivery
of Shares will occur upon expiration of the deferral period specified for
Deferred Stock by the Committee (or, if permitted by the Committee, as elected
by the Participant). In addition, Deferred Stock shall be subject to such
restrictions as the Committee may impose, which restrictions may lapse at the
expiration of the deferral period or at earlier specified times, separately or
in combination, in installments, or otherwise, as the Committee shall determine
and set forth in the Deferred Stock Award Agreement.
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(b) Forfeiture. Except as otherwise determined by the
Committee, upon termination of employment for other than cause during the
applicable deferral period, as provided in the Deferred Stock Award Agreement,
all Deferred Stock that is at that time subject to deferral (other than a
deferral at the election of the Participant) shall be forfeited; provided, that
the Committee may provide, by rule or regulation or in any Award Agreement, or
may determine in any individual case, that restrictions or forfeiture conditions
relating to Deferred Stock will be waived in whole or in part in the event of
terminations resulting from specified causes, and the Committee may in other
cases waive in whole or in part the forfeiture of Deferred Stock.
Section 8.4. Stock Appreciation Rights.
The Committee is authorized to grant Stock Appreciation Rights
to Participants on the following terms and conditions:
(a) Right to Payment. A Stock Appreciation Right shall confer
on the Participant to whom it is granted a right to receive, upon exercise
thereof, the excess of (i) the Fair Market Value of one Share on the date of
exercise (or, if the Committee shall so determine in the case of any such right,
other than one related to an ISO, the Fair Market Value of one Share at any time
during a specified period before or after the date of exercise or Change of
Control) over (ii) the grant price of the Stock Appreciation Right as determined
by the Committee as of the date of grant of the Stock Appreciation Right, which
shall be not less than the Fair Market Value of one Share on the date of grant.
(b) Other Terms. The Committee shall determine the time or
times at which a Stock Appreciation Right may be exercised in whole or in part,
the method of exercise, method of settlement, form of consideration payable in
settlement, method by which Shares will be delivered or deemed to be delivered
to Participants, and any other terms and conditions of any Stock Appreciation
Right. Limited Stock Appreciation Rights that may be exercised only upon the
occurrence of a Change of Control may be granted under this Section 8.4.
Section 8.5. Other Stock-Based Awards.
The Committee is authorized to grant to Participants such
other Awards that are denominated or payable in, valued in whole or in part by
reference to, or otherwise based on or related to, Shares, as deemed by the
Committee to be consistent with the purposes of the Plan, including without
limitation, Shares awarded purely as a "bonus" and not subject to any
restrictions or conditions, convertible or
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exchangeable debt securities, other rights convertible or exchangeable into
Shares, purchase rights, and Awards valued by reference to book value of Shares
or the value of securities of or the performance of specified Subsidiaries. The
Committee shall determine the terms and conditions of such Awards, which may
include performance criteria. Shares delivered pursuant to an Award in the
nature of a purchase right granted under this Section 8.5 shall be purchased for
such consideration, paid for at such times, by such methods, and in such forms,
including, without limitation, cash, Shares, other Awards, or other property, as
the Committee shall determine.
Section 8.6. Performance-Based Awards.
Performance Awards, performance-based Restricted Stock, and
certain other Share-based Awards subject to performance criteria are intended to
be "qualified performance-based compensation" within the meaning of Section
162(m) of the Code and shall be paid solely on account of the attainment of one
or more preestablished, objective performance goals within the meaning of
section 162(m) and the regulations thereunder. As selected by the Committee, the
performance goal shall be the attainment of one or more of the preestablished
amounts of annual net income, operating income, cash flow, return on assets,
return on equity, return on capital or total shareholder return of the Company.
The payout of any such Award to a Participant may be reduced,
but not increased, based on the degree of attainment of other performance
criteria or otherwise at the direction of the Committee.
Section 8.7. Maximum Individual Awards.
No individual may be granted more than [ ] shares
subject to any combination of Performance Awards, Restricted Stock, or other
Share-based Awards subject to performance criteria in any given year. [The
maximum payout for any individual for a Performance Award paid in cash is 100
percent of the participant's January 1 base salary for the Year of the
Performance Award payment.] The Share amounts in this Section 8.7 are subject to
adjustment under Section 9.5 and are subject to the Plan maximum under Article
III.
Section 8.8. Stand-Alone, Additional, Tandem, and Substitute Awards.
Awards granted under the Plan, may in the discretion of the
Committee, be granted either alone or in addition to, in tandem with, or in
substitution for any other Award granted under the Plan. If an Award is granted
in substitution for another Award, the Committee shall require the surrender of
such other Award in consideration for the grant of the new Award.
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Awards granted in addition to or in tandem with other Awards or award may be
granted either as of the same time as or a different time from the grant of such
other Awards.
Section 8.9. Exchange Provisions.
The Committee may at any time offer to exchange or buy out any
previously granted Award for a payment in cash, Shares, other Awards or other
property based on such terms and conditions as the Committee shall determine and
communicate to the Participant at the time that such offer is made.
Section 8.10. Term of Awards.
The term of each Award shall be for such period as may be
determined by the Committee; provided, that in no event shall the term of any
Award granted under this Article VIII exceed a period of ten years from the date
of its grant.
Section 8.11. Form of Payment Under Awards.
Subject to the terms of the Plan and any applicable Award
Agreement, payments to be made by the Company or a Subsidiary upon the grant or
exercise of an Award may be made in such forms as the Committee shall determine,
including without limitation, cash, Shares, other Awards, or other property, and
may be made in a single payment or transfer, in installments, or on a deferred
basis. Such payments may include, without limitation, provisions for the payment
or crediting of reasonable interest on installment or deferred payments or the
grant or crediting of Dividend Equivalents in respect of installment or deferred
payments denominated in Shares.
ARTICLE IX
ADDITIONAL PROVISIONS APPLICABLE TO AWARDS
Section 9.1. Award Agreements.
Each Award granted hereunder shall be evidenced by a written
Award Agreement that shall specify the number of Shares subject to the Award,
the installments, if any in which the Award shall vest and become exercisable,
the date of the expiration of such Award, and such other terms and conditions as
the Committee shall determine.
Section 9.2. Issuance of Shares.
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(a) As soon as practicable after the exercise of an Option or
settlement of any other Award, including full payment for the Shares purchased
pursuant thereto and the satisfaction of any withholding-tax liability arising
with respect to the settlement of any Option or Award, the Company shall duly
issue such Shares to the Participant and shall cause to be delivered to the
Participant a stock certificate or certificates representing such Shares and
bearing such restrictive legends as the Committee may deem necessary or
appropriate to ensure compliance with all applicable laws, rules and
regulations.
(b) Notwithstanding anything to the contrary contained herein,
the Company may, in its discretion, defer for not more than six (6) months the
issuance and delivery of Shares otherwise deliverable hereunder until completion
of the process of listing the Shares on a national exchange or the filing,
registration or other qualification of the Shares under any state or federal
law, rule or regulation as the Company may deem appropriate, provided that the
Company diligently pursues such listing, registration or qualification. The
Company may require any Participant to make such representations and furnish
such information as the Company may deem appropriate in connection with the
issuance or delivery of Shares, in compliance with all applicable laws, rules
and regulations.
(c) The Committee may impose such restrictions on any Shares
issued in settlement of any award as it may deem advisable, including without
limitation restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, under any blue-sky or state securities laws applicable to
such Shares and under any applicable stockholders' or other agreement.
Section 9.3. Taxes and Withholding.
(a) As a precondition to the delivery of any Shares or other
payment in settlement of any Award, the Company shall have the right and
authority to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state and local taxes,
domestic or foreign, that are required by law or regulation to be withheld by
the Company upon delivery of Shares or other payment under any Award. The
Participant may discharge such obligation in whole or in part with respect to
the minimum withholding-tax liability arising upon the settlement of any Award
(but no more than such minimum) (a) by transferring and delivering to the
Company previously owned shares of the Class A Stock, which shall be valued at
their Fair Market Value; (b) with the prior approval of the Committee, by
authorizing the Company in writing to deduct and retain Shares, valued at their
Fair Market Value, as of the date of exercise, from the Shares otherwise to be
issued upon settlement; or (c) by any combination of the foregoing methods of
payment.
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(b) A Participant who files an election with the Internal
Revenue Service to include the fair market value of any Award in gross income at
such time as may be permitted under Code Section 83(b) shall promptly furnish
the Company with a copy of such election together with the amount of any
federal, state, local or other taxes required to be withheld to enable the
Company to claim an income tax deduction with respect to such election.
Section 9.4. Competition.
Notwithstanding anything to the contrary contained in this
Plan, the Committee may provide under the terms of any Award Agreement that all
rights of the Participant in any Award, to the extent such rights have not
already expired or been exercised, shall terminate and be extinguished
immediately if a Participant engages in competition (as defined in the
applicable Award Agreement) with the CMP Group, whether during or after his or
her employment. In the event that a Participant receives or exercises an Option
or other Award at a time when he or she has already, without the Company's
knowledge or consent, commenced engaging in competition with the CMP Group, the
Company may, by notice given to the Participant, rescind and void such purported
transfer, Award or exercise, and the Participant shall return to the Company
immediately upon demand (i) any and all stock certificates representing Shares
issued to him or her upon the exercise at such time of such Option or Award and
still owned by the Participant, in exchange for which the Company shall return
to the Participant any consideration paid for such Shares, or (ii) any other
consideration received by the Participant under the Award. The Award Agreements
may include such other restrictive covenants as the Committee in its discretion
deems necessary or appropriate for the reasonable protection of the CMP Group's
business interests.
Section 9.5. Changes in Capital Structure.
In the event that the Company hereafter declares a dividend
payable in, or subdivides or combines, shares of the Class A Stock, or engages
in a recapitalization, reorganization, merger, consolidation, split-up, transfer
of assets, combination or exchange of shares of Common Stock or any other event
affecting the Common Stock, the Committee shall make appropriate adjustment in
the number (including without limitation the aggregate numbers specified in
Article III and Section 5.1(b)) and kind of shares that are or may become
subject to Awards granted or to be granted hereunder, and in the exercise Price
of Shares which are subject to Awards granted hereunder, and shall take such
other action as in its judgment shall be necessary or appropriate to equitably
preserve each Participant's rights with respect to such Awards substantially
proportionate to his or her respective rights existing prior to such event. The
decision of the Committee with respect to any matter referred to in this Section
9.5 shall be conclusive and binding upon Participants. The Company shall give
each Participant written
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<PAGE> 17
notice of any adjustments to an Award of the Participant or the terms and
conditions thereof made pursuant to this Section 9.5. Nothing herein is intended
to preserve a Participant's equity interest in the Company against dilution
resulting from the issuance of additional securities by the Company subsequent
to the grant of an Option.
ARTICLE X
BENEFICIARY DESIGNATION
Each Participant may, from time to time, designate a
beneficiary or beneficiaries (who may be named contingently or successively) who
shall acquire the Participant's rights under the Plan in case the Participant
dies before exercising all of such rights. A Participant may designate such
beneficiary or beneficiaries by giving the Company written notice thereof in a
form prescribed by the Company. Each such designation shall revoke all prior
designations by the Participant, and such notice shall be effective only when
given to the Company during the Participant's lifetime. In the absence of an
effective designation or if all duly designated beneficiaries predecease the
Participant, any rights remaining unexercised at the Participant's death shall
be exercised by the Participant's estate. In the event of a Participant's death,
all actions that the Participant would otherwise be entitled to take under the
Plan may be taken by the Participant's beneficiary or estate, as the case may
be, and all references in this Plan to "Participant" shall, under such
circumstances, be deemed to include such beneficiary or estate.
ARTICLE XI
RIGHTS OF PARTICIPANTS
No Participant shall acquire any rights as a stockholder of
the Company hereunder unless and until, and except to the extent that, a stock
certificate representing Shares duly purchased by such Participant pursuant to
any Award has been issued to such Participant. Nothing in the Plan shall be
deemed to confer upon any Participant the right to continued employment with the
CMP Group or to limit in any way the right of the CMP Group or such Participant
to terminate the employment of such Participant at any time and for any reason.
For the purposes of the Plan, the transfer of a Participant's employment between
the Company and an Affiliate or between Affiliates shall not be deemed a
termination of employment. No employee of the CMP Group shall have the right to
be selected to receive any Award under the Plan, and the granting of any Award
to a Participant shall not confer on the Participant any right to be granted any
additional Award in the future.
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<PAGE> 18
ARTICLE XII
CHANGE IN CONTROL
Section 12.1. Treatment of Outstanding Awards.
Except to the extent provided in the Award Agreement, in the
event that there is a Change In Control and a Participant's employment with the
CMP Group terminates as a result of his or her Dismissal Without Cause or
Resignation For Good Reason within three (3) years after such Change In Control,
then and in that event the rights of the Participant under all of his or her
Awards shall immediately become fully vested and all such Awards shall remain
fully exercisable until their respective expiration dates as set forth in the
Award Agreements applicable thereto.
Section 12.2. No Amendment.
Notwithstanding any other provision of the Plan or any
provision of any Award Agreement, the provisions of this Article XII may not be
amended, modified, suspended or terminated in a manner that adversely affects
any Award theretofore granted under the Plan to any Participant without the
prior written consent of such Participant. In the event of a Change In Control,
no changes in the Plan and no adjustments, determinations or other exercises of
discretion that are made, pursuant to the Plan or otherwise, by the Committee
subsequent to such Change In Control shall be effective if and to the extent
that they would have the effect of diminishing the rights of any Participant
under the Plan.
ARTICLE XIII
AMENDMENT, MODIFICATION AND TERMINATION
Section 13.1. Amendment.
Subject to the provisions of Section 12.2 and Section 13.2,
the Board of Directors may at any time and from time to time amend, modify,
suspend or terminate the Plan in whole or in part; provided, however, that, in
the event that any securities of the Company are publicly held, no amendment
which renders the grant or exercise of an Award non-exempt under Rule 16b-3 of
the Securities Exchange Act of 1934, including any successor to such Rule, shall
be made or be effective.
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<PAGE> 19
Section 13.2. Awards Previously Granted.
Notwithstanding the provisions of Section 13.1, no amendment,
modification, suspension or termination of the Plan shall be effective to the
extent it adversely affects in any material way any Award previously granted
under the Plan, unless the Participant holding such Award consents in writing
thereto. Subject to the terms of the Plan, the Committee may modify the form,
terms and conditions of any outstanding Award in such manner, not unfavorable to
the Participant, as the Committee in its discretion may determine and, with
respect to any Participant subject to foreign tax laws or regulations, the
Committee may vary the form, terms and conditions of any Award as the Committee
in its discretion may deem necessary or advisable to allow the Participant to
qualify for favorable tax treatment under such foreign tax laws or regulations.
ARTICLE XIV
INDEMNIFICATION
Any claim under the Plan shall be solely the obligation of the
Company. No member of the Committee shall be personally liable by reason of any
contract or other instrument executed by such member (or on behalf of such
member) in his or her capacity as a member of the Committee or by reason of any
mistake of judgment made by him or her in good faith in such capacity. The
Company shall indemnify each employee, officer or director of the Company to
whom any duty or power relating to the administration or interpretation of the
Plan may be allocated or delegated and shall hold such person harmless against
any loss, liability, claim, cost or expense (including reasonable attorneys'
fees and any sum paid in settlement of a claim with the approval of the Board of
Directors) incurred by or asserted against such person as a result of or arising
out of any act or omission to act in connection with the Plan, unless arising
out of such person's fraud or bad faith. The right of indemnification provided
for in this Article XIV shall be in addition to any rights of indemnification to
which such person may be entitled under the certificate of incorporation or
bylaws of the Company, as a matter of law or otherwise, or any power that the
Company may have to indemnify such person or hold him or her harmless.
ARTICLE XV
DURATION OF PLAN
This amendment and restatement of the Plan shall be effective
on the date of its adoption by the Board of Directors and shall remain in
effect, subject to the right of the Board of Directors to amend, modify, suspend
or terminate the Plan pursuant to Article XIII, until all Shares have been
issued in accordance herewith; provided, however, that in no event may an
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<PAGE> 20
Award be granted under the Plan after December 31, 2005. Any Awards granted
prior to approval of the Plan by the stockholders of the Company shall be made
subject to such approval.
ARTICLE XVI
SUCCESSORS
All obligations of the Company under the Plan with respect to
Awards granted hereunder shall be binding on any successor to the Company and
shall survive any purchase, merger, consolidation or other disposition of all or
substantially all of the business and/or assets of the Company.
ARTICLE XVII
MISCELLANEOUS
Section 17.1. Other Benefit Plans.
Neither the grant of an Award nor any income recognized upon
exercise of an Award shall be deemed compensation to a Participant for the
purposes of any other employee benefit plan of the CMP Group, unless such plan
specifically so provides in referring to the Plan by name or the Board of
Directors determines otherwise.
Section 17.2. Applicable Law.
To the extent not preempted by federal law, the Plan and all
agreements hereunder (including all Award Agreements) shall be governed by and
construed and enforced in accordance with the laws of the State of New York,
without reference to its principles regarding choice or conflicts of law.
Section 17.3. Severability.
In the event that any provision of the Plan shall be held for
any reason to be illegal or invalid under applicable law, such provision shall
be ineffective to the extent of such illegality or invalidity without affecting
the remainder of such provision or any other provision of the Plan.
-20-
<PAGE> 21
Section 17.4. Gender and Number.
Except when otherwise indicated by the context, references
herein to one gender shall include the other genders, and references herein to
the singular or plural shall include the plural or singular.
Section 17.5. Headings.
The headings of the Articles and Sections of the Plan are for
convenience of reference only and shall not be considered in interpreting or
construing the Plan.
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<PAGE> 1
EXHIBIT 10.23
FORM OF
SEVENTH AMENDMENT AGREEMENT
This SEVENTH AMENDMENT AGREEMENT (this "Agreement" or the "Seventh
Amendment") made as of July 18, 1997, by and among CMP MEDIA INC. (the
"Borrower"), a Delaware corporation and the successor by merger to CMP
Publications, Inc., a New York corporation ("CMP Publications"), FLEET NATIONAL
BANK ("Fleet"), formerly known as Fleet National Bank of Connecticut and prior
to that Shawmut Bank Connecticut, N.A., and the successor by merger to Fleet
Bank N.A. ("Fleet N.A."), THE CHASE MANHATTAN BANK ("Chase"), the successor by
merger to The Chase Manhattan Bank, N.A., (Fleet and Chase and any of their
respective successors or permitted assigns, the "Banks") and Fleet as agent for
the Banks (in its capacity as such, the "Agent").
WITNESSETH:
WHEREAS, CMP Publications, Fleet, Chase and the Agent have executed
and delivered a Credit Agreement dated as of July 15, 1993 (the "Original
Credit Agreement"), which Original Credit Agreement was amended by an Amendment
and Waiver Agreement among CMP Publications, Fleet, Chase and the Agent dated
February 28, 1994 (the "First Amendment"), by a Second Amendment and Waiver
Agreement among CMP Publications, Fleet, Chase and the Agent dated as of
February 27, 1995 (the "Second Amendment"), by a Third Amendment Agreement
among CMP Publications , Fleet, Chase and the Agent dated as of May 30, 1995
(the "Third Amendment"), and by a Fourth Amendment Agreement, dated as of
August 9, 1995, between CMP Publications, Fleet, Chase, Fleet N.A. and the
Agent (the "Fourth Amendment") (such First, Second, Third and Fourth Amendments
are collectively referred to below as the "Prior Amendments"); and
WHEREAS, CMP Publications, Fleet, Chase and the Agent also executed
and delivered (i) a Third Waiver Agreement, dated April 24, 1995 (the "Third
Waiver") and (ii) a Fourth Waiver Agreement, dated June 5, 1995 (the "Fourth
Waiver"), both relating to the Agreement, as amended; and
WHEREAS, CMP Publications, Fleet, Fleet, N.A., Chase and the Agent
also executed and delivered a Fifth Waiver Agreement, dated February 28, 1996
(the "Fifth Waiver") also relating to the Original Credit Agreement, as
amended; and
WHEREAS, the Original Credit Agreement was subsequently amended by a
Fifth Amendment and Consolidation of Prior Amendments (Together with Sixth
Waiver) Agreement, dated as of November 14, 1996 (the "Fifth Amendment"), which
Fifth Amendment, among other things, (i) set forth certain new amendments to
the Original Credit Agreement, and (ii)
<PAGE> 2
consolidated those amendments (to the Original Credit Agreement) which were
contained in the Prior Amendments and were still effective;
WHEREAS, the Original Credit Agreement was subsequently amended by a
Sixth Amendment, dated as of April 15, 1997 (the Original Credit Agreement as
amended by the Fifth Amendment (including both such new amendments and
consolidated amendments) and the Sixth Amendment is referred to below as the
"Agreement"); and
WHEREAS, the Borrower, the Banks and the Agent entered into a Seventh
Waiver Agreement, dated as of June 13, 1997 with respect to the Agreement; and
WHEREAS, the Agent (on behalf of the Banks) and the Borrower entered
into two letter agreements, both dated May 30, 1997; and
WHEREAS, one of such letters (the "Credit Agreement Letter") outlined
certain proposed amendments to the Agreement which the Banks and the Borrower
agreed to; and
WHEREAS, the other of such letters (the "Negative Pledge Letter")
outlined certain proposed amendments to the Negative Pledge Agreement (as
defined in the Agreement); and
WHEREAS, the Borrower and the Banks desire to enter into this
Agreement in order to (i) set forth their agreement with respect to the
amendments referred to in the Credit Agreement Letter and (ii) set forth
certain other amendments to the Agreement; and
WHEREAS, simultaneously with the execution and delivery of this
Agreement, the Agent and Daniel H. Leeds, Gerard G. Leeds, Liselotte J. Leeds,
Michael S. Leeds, Daniel H. Leeds as trustee for the Daniel H. Leeds 1997 GRAT
and Michael S. Leeds as trustee for the Michael S. Leeds 1997 GRAT and the
Agent are entering into an Amended and Restated Negative Pledge Agreement of
even date herewith to reflect the amendments contemplated by the Negative
Pledge Letter and certain other amendments.
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
PART A. GENERAL MATTERS.
1. Capitalized Terms; Section References. Capitalized terms used
herein without definition and defined in the Agreement shall have the same
respective meanings given those terms in the Agreement, unless the context
otherwise requires. All Section references used
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<PAGE> 3
herein shall, unless otherwise specified herein, be deemed to refer to Sections
in the Agreement.
PART B. AMENDMENTS TO THE AGREEMENT.
1. Accumulated Net Profit Distribution. The definition of the
term "Accumulated Net Profit Distribution" contained in Article 1 of the
Agreement is hereby amended by deleting the phrase "$30 million" and
substituting for it the phrase "$55 million".
2. Change of Control Definition. It is agreed that effective
upon the IPO Consummation (as that term is defined below), the definition of
the term "Change of Control" contained in Article 1 of the Agreement shall be
amended and restated to read in its entirety as follows:
"Change of Control" shall mean that for any reason (i) the Leeds
Group (as defined below) does not own (beneficially and of record),
with the full right to actually vote, 50.1% or more of the combined
voting power of all Voting Stock (as defined below) of the Borrower or
(ii) the Leeds Individual Group (as defined below) shall no longer
have the absolute right to elect a majority of the Board of Directors
of CMP. "Leeds Group" shall mean (1) G. Leeds and/or L. Leeds, (2)
any of the children of G. Leeds and L. Leeds, (3) subject to such
trusts remaining under the control of G. and L. Leeds or any of their
children, one or more trusts for the sole benefit of (x) G. Leeds, L.
Leeds and/or any of their children and/or (y) any other lineal
descendants (including adopted children) of G. Leeds and L. Leeds or
(iv) Controlled Private Foundations. "Leeds Individual Group" means
G. Leeds, L. Leeds and any of their children. "Voting Stock" means
capital stock issued by the Borrower the holders of which are entitled
to vote for the election of the Board of Directors of the Borrower.
"Controlled Private Foundation" means a private foundation which (i)
is a corporation and qualifies as a private foundation under Section
509(a) of the Code and (ii) remains under the effective control of G.
Leeds, L. Leeds and/or any of their children (such requirement of
control to include controlling the Board of Directors of such private
foundation).
The definition of the term Change of Control shall not be so amended
unless and until the IPO Consummation.
3. Negative Pledge Agreement Definition. The definition of the
term "Negative
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<PAGE> 4
Pledge Agreement" contained in Article 1 of the Agreement is hereby amended and
restated to read in its entirety as follows:
"Negative Pledge Agreement" means the Amended and Restated
Negative Pledge Agreement, dated as of July 18, 1997, by and between
Daniel H. Leeds, G. Leeds, L. Leeds, Michael S. Leeds, Daniel H.
Leeds as trustee for the Daniel H. Leeds 1997 GRAT and Michael S.
Leeds as trustee for the Michael S. Leeds 1997 GRAT, and the Agent, as
same may be amended, supplemented or otherwise modified from time to
time.
Exhibit F, to the Agreement is hereby deemed deleted.
4. Specified Distribution Definition. The definition of the term
"Specified Distributions" contained in Article 1 of the Agreement is hereby
amended and restated to read in its entirety as follows:
"Specified Distributions" means any and all Distributions made (i) by
the Borrower except for, to the extent actually paid, the Accumulated
Net Profit Distributions or (ii) by any Guarantor and/or any
Subsidiary of the Borrower to the extent any such Distribution is not
paid to the Borrower.
5. New Definitions; Deletion of Definition(s). (a) The following
new definitions are hereby added to Article 1, to be inserted in their proper
alphabetical order:
"Controlled Private Foundation" means a private foundation which (i)
is a corporation and qualifies as a private foundation under Section 509(a) of
the Code and (ii) remains under the effective control of G. Leeds, L. Leeds or
any of their children (such requirement of control to include controlling the
election of the Board of Directors of such private foundation).
"Exchange" means: the (i) New York Stock Exchange, (ii) American Stock
Exchange or (iii) NASDAQ National Market.
"G. Leeds" shall mean Gerard G. Leeds.
"L. Leeds" shall mean Liselotte J. Leeds.
"IPO" means an initial public offering of the stock of the Borrower
on an Exchange.
"IPO Consummation" means the Borrower is listed as a public company on
an Exchange and the IPO has actually closed and fully settled.
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<PAGE> 5
"Required Dividend Documentation" means, with respect to Section
6.15(a) hereof, a legal opinion to the Banks and the Agent (along with such
other evidence as is reasonably satisfactory to the Banks) that the declaration
and payment of the Special Accumulated Net Profit Distribution (as defined in
Section 6.15(a)) is permitted under applicable Delaware corporate law.
(b) Effective with the IPO Consummation, the definition of the
term "Specified Offering Proceeds" in Article 1 of the Agreement shall be
deleted.
6. Amendment of Section 6.11. Effective as of the date the IPO
occurs, Section 6.11 of the Agreement shall be amended and restated to read in
its entirety as set forth below:
Section 6.11 Minimum Net Worth. Borrower shall not permit the Net
Worth of the Borrower and the Guarantors (on a combined basis) at any
time on or after the date the IPO occurs, to be less than the sum of
(i) $40,000,000 plus (ii) 25% of cumulative Net Income for the period
from January 1, 1998 to the last day of the most recent completed
fiscal quarter ending on or prior to the applicable date of
measurement (if cumulative Net Income for such period is negative, the
amount under clause (ii) shall, for such period, be deemed zero).
7. Section 6.15. Section 6.15 of the Agreement is hereby amended
as follows:
(i) Section 6.15(a) of the Agreement is hereby amended and
restated to read in its entirety as follows:
(a) Borrower or any Guarantor may make Distributions
(including Accumulated Net Profit Distributions) in any fiscal
year if immediately prior to and after giving effect to each
such Distribution, and as a result thereof, no Event of
Default or Default shall occur or be continuing; provided,
that, the Borrower shall be permitted to declare an
Accumulated Net Profit Distribution (for purposes of this
proviso, a "Special Accumulated Net Profit Distribution")
notwithstanding the fact that if (at the time of such
declaration) the Special Accumulated Net Profit Distribution
was actually paid (i.e., made) an Event of Default under
Section 6.11 hereof would result, if the Borrower satisfies
the following four conditions: (i) the Borrower causes the
delivery of the Required Dividend Documentation, (ii) (aa) the
Special Accumulated Net Profit Distribution shall not (and
Borrower hereby covenants that such Distribution shall not) be
paid until after the IPO Consummation and
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<PAGE> 6
(bb) the IPO Consummation occurs prior to January 1, 1998,
(iii) the payment of the Special Accumulated Net Profit
Distribution shall be made expressly contingent upon the IPO
Consummation occurring and the IPO shall result in the
Borrower receiving net proceeds in an amount sufficient to
meet (taking into account such Distribution) the Net Worth
requirement (to be effective as of the occurence of the IPO)
set forth in Section 6.11 above, and (iv) no Event of Default
(including without limitation under Section 6.11) or Default
exists either immediately prior to or after giving effect to
or as a result of such payment of the special Accumulated Net
Profit Distribution; provided, further, that in addition to
any other restrictions hereunder, at least two (2) Business
Days prior to the paying of any Accumulated Net Profit
Distribution (including a Special Accumulated Net Profit
Distribution) the Borrower shall deliver to the Agent and the
Banks a notice which identifies the proposed Distribution as
an Accumulated Net Profit Distribution and is accompanied by a
certificate of Borrower's Chief Financial Officer
demonstrating (to the satisfaction of the Required Banks), on
a pro-forma basis, that after the making of such Distribution
the Borrower would be in compliance with Section 6.11 hereof
and assuming, for purposes of this sentence, that the Net
Worth test under Section 6.11 is measured as of the proposed
date for such Distribution.
(ii) Section 6.15(b) of the Agreement is hereby amended by adding the
following phrase immediately after the words "or be continuing" and
immediately before the phrase "; provided, however, that": "(provided,
that the Borrower may declare the Special Accumulated Net Profit
Distribution in accordance with and pursuant to the terms of Section
6.15(a) above)". Borrower also agrees that no Permitted Tax
Distributions (as defined in Section 6.15(b)) shall be permitted on or
after the date the IPO occurs.
8. A new Section 6.17 is hereby added to the Agreement to read in
its entirety as follows:
6.17 Amendments to Charter, etc. The Borrower shall not (i) amend
or otherwise modify its certificate of incorporation, by-laws, or other charter
document in a manner which adversely affects the interests of any of the Banks
or the Agent, including without limitation any amendment which adversely affects
the voting rights of the Leeds Group (as defined in the definition of Change of
Control), or (ii) file any certificate of designation (or comparable document)
with respect to any preferred stock without the prior written consent of the
Banks and the Agent.
PART C. MISCELLANEOUS; AND PAYMENT OF FEES AND EXPENSES.
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<PAGE> 7
1. The Borrower, the Agent and the Banks hereby ratify and confirm
all terms and provisions of the Agreement, and any other documents, instruments
or agreements executed in connection therewith and agree that, except as
expressly modified herein, all of such terms and provisions remain in full
force and effect.
2. Each Bank acknowledges and agrees with each other Bank and the
Agent that (i) it has independently evaluated any projections and other
materials and information with respect to the Borrower and/or any Guarantor and
has made its own independent decision to enter into this Amendment and is not
relying on any representation or other statement of such other Bank or the
Agent in doing so and (ii) pursuant to Section 8.04 of the Agreement, it shall
make its own credit decisions in taking or not taking any action (including
without limitation making or not making any Loan) under the Agreement and the
Notes. Borrower acknowledges that the obligations of the Banks are several and
no Bank shall be responsible for the failure (if any) of any other Bank to make
any Loan required to be made by such other Bank.
3. In order to induce the Banks to enter into this Agreement and
to make any further Loans, the Borrower hereby represents and warrants that:
(a) the representations and warranties contained in Article 4 of the
Agreement, as hereby amended, are true and correct in all material
respects on the date hereof (or were true and correct as of the
specific point in time to which they relate) with the same effect as
though such representations and warranties had been made on the date
hereof,
(b) the Borrower is in compliance with all of the terms and provisions
set forth in the Agreement, as hereby amended, on its part to be
observed and performed,
(c) no Event of Default or Default under the Agreement, as hereby
amended, now exists,
(d) the Agreement, as hereby amended, and the Notes are the legal,
valid and binding obligations of the Borrower, enforceable against the
Borrower in accordance with their respective terms, and
(e) the Borrower has no claims, counterclaims, defenses, or rights
of set-off or recoupment against the Banks or the Agent.
4. The effectiveness of the amendments set forth above is subject
to the satisfaction of the following conditions:
(a) Prior to or concurrently with the execution and delivery of this
Seventh Amendment, the Agent shall have received resolutions of the
Board of Directors of the Borrower, certified by the Secretary or
Assistant Secretary of the Borrower (or
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<PAGE> 8
otherwise identified to the satisfaction of the Banks), authorizing
the execution and delivery by the Borrower of this Seventh Amendment
and the performance by the Borrower of the Agreement as amended by the
Seventh Amendment, in form and substance satisfactory to the Agent and
the Banks.
(b) Concurrently with the execution and delivery of this Seventh
Amendment, the Agent shall have received an opinion of Robert D.
Marafioti, General Counsel of the Borrower, dated the date hereof, in
form and substance satisfactory to the Agent and the Banks.
(c) Prior to or concurrently with the execution and delivery of this
Agreement, (i) the Agent shall have received such other documents,
certificates, resolutions, instruments and agreements from the
Borrower as the Agent or any of the Banks may reasonably request and
(ii) the Borrower shall (a) pay to the Banks (a) a one-time amendment
fee of $18,750 to be shared pro-rata by the Banks in accordance with
their respective Commitments and (b) reimburse the Agent and the Banks
for all costs and expenses (including counsel fees and disbursements))
incurred in connection with this Seventh Amendment and any related
matters.
(d) Concurrently with the execution and delivery of this Seventh
Amendment, Daniel H. Leeds, Gerard G. Leeds, Liselotte J. Leeds,
Michael S. Leeds, Daniel H. Leeds as trustee for the Daniel H. Leeds
1997 GRAT and Michael S. Leeds as trustee for the Michael S. Leeds
1997 GRAT and the Agent shall enter into an Amended and Restated
Negative Pledge Amendment in form and substance satisfactory to the
Agent and the Banks and reflecting the amendments contemplated by the
Negative Pledge Letter.
5. This Seventh Amendment may be signed in any number of
counterparts, all of which shall be considered originals but all of which
together shall be deemed one instrument.
6. This Seventh Amendment (i) shall be governed by and construed in
accordance with the internal laws of the State of Connecticut, (ii) is limited
specifically to the matters set forth herein, (iii) does not constitute
directly or by implication a waiver or modification of any other provision of
the Agreement and (iv) shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
7. The Borrower hereby agrees to pay the legal fees and disbursements
of Finn Dixon & Herling LLP incurred in connection with the drafting and
negotiation of this Agreement and related matters.
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<PAGE> 9
IN WITNESS WHEREOF, the parties hereto each have executed this Sixth
Amendment Agreement as of the date first hereinbefore written.
CMP MEDIA INC.
By:
------------------------------
Name: Joseph E. Sichler
Title: Vice President/CFO
FLEET NATIONAL BANK
By:
------------------------------
Name: G. Steven Kalin
Title: Assistant Vice-President
THE CHASE MANHATTAN BANK
By:
------------------------------
Name:
Title:
FLEET NATIONAL BANK,
as Agent
By:
------------------------------
Name:
Title:
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<PAGE> 1
EXHIBIT 11
CMP MEDIA INC. AND SUBSIDIARIES
COMPUTATION OF PRO FORMA NET INCOME PER
COMMON AND COMMON EQUIVALENT SHARE
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
----------------------------------------- ----------------------------
1994 1995 1996 1996 1997
----------- ----------- ----------- ------------ ------------
(unaudited)
<S> <C> <C> <C> <C> <C>
Historical income (loss) before provision (benefit)
for income taxes $ 28,969 $ 17,230 $ 27,763 $ (802) $ (3,991)
Pro forma provision (benefit) for income taxes assuming
change in tax status to C corporation prior to
January 1, 1994 12,643 7,694 11,707 (338) (1,740)
----------- ----------- ----------- ------------ ------------
Pro forma net income (loss) applicable to common and
common equivalent shares $ 16,326 $ 9,536 $ 16,056 $ (464) $ (2,251)
=========== =========== =========== ============ ============
Primary shares:
Weighted average number of common stock and
common stock equivalents outstanding:
Common stock 18,874,570 18,874,570 18,874,570 18,874,570 18,874,570
Options 898,287 898,287 898,287 898,287 898,287
Shares required to be issued to pay S Corporation
Distribution 2,111,111 2,111,111 2,111,111 2,111,111 2,111,111
Shares required to be issued to pay S corporation
distributions in excess of earnings during the
previous twelve months 572,222 572,222 572,222 572,222 572,222
----------- ----------- ----------- ------------ ------------
22,456,190 22,456,190 22,456,190 22,456,190 22,456,190
=========== =========== =========== ============ ============
Fully diluted shares:
Weighted average number of common stock and
common stock equivalents outstanding:
Common stock 18,874,570 18,874,570 18,874,570 18,874,570 18,874,570
Options 898,287 898,287 898,287 898,287 898,287
Shares required to be issued to pay S Corporation
Distribution 2,111,111 2,111,111 2,111,111 2,111,111 2,111,111
Shares required to be issued to pay S corporation
distributions in excess of earnings during the
previous twelve months 572,222 572,222 572,222 572,222 572,222
----------- ----------- ----------- ------------ ------------
22,456,190 22,456,190 22,456,190 22,456,190 22,456,190
=========== =========== =========== ============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> JAN-01-1996 JAN-01-1997
<PERIOD-END> DEC-31-1996 MAR-31-1997
<CASH> 6,721 0
<SECURITIES> 0 0
<RECEIVABLES> 68,334 70,648
<ALLOWANCES> 3,189 2,969
<INVENTORY> 6,091 6,724
<CURRENT-ASSETS> 84,388 87,410
<PP&E> 42,355 45,816
<DEPRECIATION> 15,894 17,803
<TOTAL-ASSETS> 123,935 126,909
<CURRENT-LIABILITIES> 72,253 71,831
<BONDS> 0 0
0 0
0 0
<COMMON> 189 189
<OTHER-SE> 16,524 9,514
<TOTAL-LIABILITY-AND-EQUITY> 123,935 126,909
<SALES> 418,059 101,914
<TOTAL-REVENUES> 418,059 101,914
<CGS> 172,475 42,941
<TOTAL-COSTS> 389,254 102,858
<OTHER-EXPENSES> 2,476 3,047
<LOSS-PROVISION> 2,216 583
<INTEREST-EXPENSE> 667 370
<INCOME-PRETAX> 27,763 (3,991)
<INCOME-TAX> 904 (133)
<INCOME-CONTINUING> 26,859 (3,858)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 26,859 (3,858)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
