Registration No. 333-
As filed with the Securities and Exchange Commission on May 20, 1998
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NEBCO EVANS HOLDING COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Delaware 06-1444203
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
545 Steamboat Road
Greenwich, Connecticut 06830
(Address of Principal Executive (Zip Code)
Offices)
NEBCO EVANS HOLDING COMPANY
MANAGEMENT STOCK OPTION PLAN
(Full title of the Plan)
Kevin J. Rogan
Nebco Evans Holding Company
c/o AmeriServe Food Distribution, Inc.
14841 Dallas Parkway
Dallas, Texas 75240
(972) 338-7000
(Name, Address, and Telephone Number, Including Area Code, of Agent for
Service)
Calculation of Registration Fee
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Title of Amount to Proposed maximum Proposed maximum Amount of
securities be offering price per aggregate registration
to be registered share (1) offering price fee
registered
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Nebco Evans 1,000,000 $32.85 $32,850,000 $9,690.75
Holding shares
Company
Class A
Common
Stock (par
value $0.01
per share)
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(1) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(h)(1) under the Securities Act of 1933, the proposed maximum
offering price per share and the registration fee are based upon the exercise
price of options to purchase shares of Class A Common Stock to be issued
pursuant to the Plan, calculated as of the date of this Registration Statement.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS (1)
ITEM 1. PLAN INFORMATION
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Nebco Evans Holding Company, a Delaware
corporation ("NEHC" or the "Company") with the Securities and Exchange
Commission (the "Commission") are incorporated by reference into this
Registration Statement:
(a) The Company's Annual Report on Form 10-K for its fiscal
year ended December 31, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the
quarterly period ended March 28, 1998; and
(c) The Company's Current Report on Form 8-K, dated May 6,
1998.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the 1934 Act, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from their respective dates of filing (such documents, and the documents
enumerated above, being hereinafter referred to as "Incorporated Documents").
Any statement contained herein or in an Incorporated Document shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed Incorporated Document modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
NEHC has two class of common stock: Class A Common Stock, par value $0.01
per share (the "Class A Common Stock") and Class B Common Stock, par value $0.01
per share (the "Class B Common Stock" and, together with the Class A Common
Stock, the "Common Stock"). Set forth below is a summary of certain terms and
provisions of the Class A Common Stock which is being
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(1) This information is not required to be included in, and is not incorporated
by reference in, this Registration Statement.
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offered pursuant to this Registration Statement, as well as a summary of certain
of terms and provisions of the Class B Common Stock where such summary is
necessary to an understanding of the rights of holders of Class A Common Stock.
The summary set forth below is qualified in its entirety by reference to NEHC's
Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation") which has been filed as an exhibit to this Registration
Statement.
GENERAL. The Certificate of Incorporation authorizes the issuance of up to
1,000,000 shares of Class A Common Stock. As of May 15, 1998, there were no
shares of Class A Common Stock outstanding and 1,000,000 shares reserved for
issuance under NEHC's 1998 Management Stock Option Plan (the "Plan").
VOTING RIGHTS. On or prior to an Initial Public Offering (as defined
below), shares of Class A Common Stock will be non-voting. Following an Initial
Public Offering, holders of shares of Class A Common Stock will be entitled to
one (1) vote per share on all matters upon which shareholders have the right to
vote. At all times, holders of shares of Class B Common Stock will be entitled
to ten (10) votes per share on all matters upon which shareholders have the
right to vote. Except as otherwise provided by applicable law, following an
Initial Public Offering, the holders of Class A Common Stock and of Class B
Common Stock shall vote as a single class on all matters upon which the
stockholders have a right to vote and the affirmative vote of stockholders shall
be calculated as a percentage of the total number of votes entitled to be cast
be holders of Class A Common Stock and Class B Common Stock, in the aggregate.
Except as otherwise provided by applicable law, all elections for directors
shall be decided by plurality vote; all other questions shall be decided by
majority vote. Neither the holders of Class A Common Stock nor the holders of
Class B Common Stock shall have cumulative voting rights.
"Initial Public Offering" means the completion of a sale of shares of the
Common Stock of NEHC pursuant to an effective registration statement under the
Securities Act (other than a registration statement relating to shares of Common
Stock issuable upon exercise of employee stock options or in connection with an
employee benefit plan of the Company or a subsidiary or affiliate) following
which either (x) 25% or more of the issued and outstanding shares of Common
Stock of the Company is publicly held and freely transferable or (y) shares of
Common Stock of the Company with a market value of at least $100,000,000 are
publicly held and freely transferable or (z) the Board of Directors of NEHC (the
"Board") shall, in its discretion, deem an Initial Public Offering to have
occurred.
DIVIDENDS. Subject to the rights of the holders of any series of preferred
stock, holders of Class A Common Stock are entitled to receive such dividends
and other distributions in cash, stock or property of NEHC as may be declared
thereon by the Board from time to time out of assets or funds of NEHC. The
Certificate of Incorporation provides that holders of Class A Common Stock and
Class B Common Stock will receive like dividends and distributions, in equal
amounts per share (except that dividends or other distributions may be paid in
Class A Common Stock (or securities derived from Class A Common Stock) to
holders of Class A Common Stock and in Class B Common Stock (or securities
derived from Class B Common Stock) to holders of Class B Common Stock). The
Certificate of Incorporation also provides that, in the case of any split,
subdivision, combination or reclassification of Class A Common Stock or Class B
Common Stock, the shares of
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Class B Common Stock or Class A Common Stock, as the case may be, shall also be
split, subdivided, combined or reclassified so that the relative proportions
remain the same.
NEHC's ability to pay cash dividends on the Class A Common Stock is
limited under NEHC's Second Amended and Restated Credit Agreement, dated as of
July 11, 1997, as amended, the Indenture, dated July 11, 1997 by and between
NEHC and State Street Bank and Trust Company, with respect to the Company's
12-3/8% Senior Discount Notes due 2007 and the rights of holders of the
Company's 11 1/4% Senior Redeemable Exchangeable Preferred Stock due 2008.
Accordingly, there can be no assurance that NEHC will be able to pay cash
dividends on the Class A Common Stock.
LIQUIDATION. In the event of any liquidation, dissolution or winding up of
NEHC, the holders of shares of Class A Common Stock are entitled to share
equally with the holders of shares of Class B Common Stock, after payment of all
debts and liabilities of NEHC and subject to the prior rights of holders of
shares of NEHC's preferred stock, in the remaining assets of NEHC. In the event
of any corporate merger, consolidation, purchase or acquisition of property or
stock, or other reorganization in which any consideration is to be received by
the holders of Class A Common Stock or the holders of Class B Common Stock, the
holders of Class A Common Stock and the holders of Class B Common Stock shall
receive the same consideration on a per share basis, except that holders of
Class B Common Stock may receive voting securities with ten (10) times the
number of votes per share as those voting securities to be received by the
holders of Class A Common Stock.
NO PREEMPTIVE RIGHTS; REDEMPTION; ASSESSABILITY. Holders of shares of
Class A Common Stock are not entitled to preemptive rights with respect to any
shares of any stock of NEHC that may subsequently be issued. The Class A Common
Stock is not subject to call or redemption and, when issued upon payment of the
exercise price payable therefor, shares of Class A Common Stock will be fully
paid and non-assessable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Inapplicable.
ITEM 6. 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 stockbrokers,
(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. Article VIII, Section 1 of
the Com-
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pany's 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 attorneys'
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 if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interest of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful. Article VIII, Section 2(a) of the Company's Restated
Certificate of Incorporation provides that the Company shall indemnify its
officers, directors, employees and agents to the full extent permitted by
Delaware law.
Article VIII, Section 2(a) of the Company's Restated Certificate of
Incorporation also provides that the Company shall indemnify any such person
seeking indemnification in connection with a proceeding initiated by such person
only if such proceeding was authorized by the Board. Any rights to
indemnification conferred in Section 2 are contract rights, and include the
right to be paid by the Company the expenses incurred in defending any such
proceeding in advance of its final disposition, except that, if the DGCL
requires, the payment of such expenses incurred by a director or officer in such
capacity in advance of final disposition shall be made only upon delivery to the
Company of an undertaking by or on behalf of such director or officer, to repay
all amounts so advanced if it is ultimately determined that such director or
officer is not entitled to be indemnified under Section 2 or otherwise. By
action of the board of directors, the Company may extend such indemnification to
employees and agents of the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Inapplicable.
ITEM 8. EXHIBITS
4.1 Amended and Restated Certificate of Incorporation of NEHC.
4.2 NEHC Management Stock Option Plan.
5.1 Opinion of Kevin J. Rogan, Vice President and Secretary of the
Company, as to the legality of the securities being registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Kevin J. Rogan, Vice President and Secretary of the
Company (contained in Exhibit 5.1).
ITEM 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
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(a) (1) to file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the "Securities
Act");
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in the Registration Statement;
(iii) to include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in
the Registration Statement; provided, however, that paragraphs
(a)(1)(i) and (a)(1)(ii) of this section do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement; (2) that for the purpose of
determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and (3) to remove from
registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each
filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) 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 foregoing provisions, or
otherwise, the Registrant has been advised that, in the opinion of the
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 of whether such indemnification by it is against
public policy
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as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 (as amended),
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of Greenwich, State of Connecticut, on this
19th day of May, 1998.
NEBCO EVANS HOLDING COMPANY)
By: /s/ John V. Holten
John V. Holten
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933 (as amended),
this Registration Statement has been signed by the following persons in the
capacities and on this 19th day of May, 1998.
Signature Title
/s/ John V. Holten Chairman, Director and Chief
John V. Holten Executive Officer
/s/ Diana M. Moog Senior Vice President and Chief
Diana M. Moog Financial Officer
/s/ Stanley J. Szlauderbach Vice President and Controller
Stanley J. Szlauderbach (Chief Accounting Officer)
/s/ Daniel W. Crippen Director
Daniel W. Crippen
/s/ John R. Evans Director
John R. Evans
/s/ Peter T. Grauer Director
Peter T. Grauer
/s/ Benoit Jamar Director
Benoit Jamar
/s/ Gunnar E. Klintberg Director
Gunnar E. Klintberg
/s/ Raymond E. Marshall Director
Raymond E. Marshall
/s/ Leif F. Onarheim Director
Leif F. Onarheim
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EXHIBIT INDEX
Exhibit
Number Exhibit Name
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4.1 Amended and Restated Certificate of Incorporation of NEHC.
4.2 NEHC Management Stock Option Plan
5.1 Opinion of Kevin J. Rogan, Vice President and Secretary of
the Company, as to the legality of the securities being
registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Kevin J. Rogan, Vice President and Secretary of
the Company (contained in Exhibit 5.1).
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Exhibit 4.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
NEBCO EVANS HOLDING COMPANY
Nebco Evans Holding Company (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
state of Delaware ("DGCL"), does hereby certify as follows:
FIRST: The present name of the Corporation is Nebco Evans Holding
Company. The Corporation was originally incorporated as Nebco Evans Holding
Company and the certificate of incorporation of was originally filed with the
Secretary of State of the State of Delaware on January 19, 1996.
SECOND: That by unanimous written consent the Board of Directors of
the Corporation, resolutions were duly adopted setting forth a proposed
amendment and restatement of the Amended and Restated Certificate of
Incorporation of the Corporation and declaring said amendment and restatement to
be advisable. The resolution setting forth the proposed amendment and
restatement is as follows:
RESOLVED, that the Amended and Restated Certificate of
Incorporation of the Corporation shall be amended in accordance with
Section 242 of the DGCL to effect the Recapitalization and certain other
changes in said Amended and Restated Certificate of Incorporation, and
that the Amended and Restated Certificate of Incorporation be adopted in
accordance with Sections 228, 242 and 245 of the DGCL, as the Amended and
Restated Certificate of Incorporation of the Corporation.
RESOLVED, that such amendment of the Amended and Restated
Certificate of Incorporation of the Corporation is deemed by the Directors
of the Corporation to be advisable and in the best interests of the
Corporation.
THIRD: The amendment and restatement was duly adopted by the
stockholders of the Corporation in accordance with the applicable provisions of
Sections 103, 228, 242 and 245 of the DGCL and, upon filing with the Secretary
of State in accordance with Section 103, shall thenceforth supersede the
existing Amended and Restated Certificate of Incorporation of the Corporation
and shall, as it may thereafter be amended in accordance with its terms and
applicable law, be the certificate of incorporation of the Corporation (the
"Restated Certificate of Incorporation").
FOURTH: Upon the filing (the "Effective Time") of this Restated
Certificate of Incorporation pursuant to the DGCL, without further act on the
part of the holders thereof or the Corporation: (i) each of the 6,508 shares of
Class A Common Stock, par value $0.01 per share ("Class A
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Common Stock") issued and outstanding as of the Effective Time shall be deemed
to be converted into 1,000 shares of Class B Common Stock, par value $0.01 per
share ("Class B Common Stock" and, together with the Class A Common Stock, the
"Common Stock"), such that there will thereafter be 6,508,000 shares of Class B
Common Stock outstanding in respect of such former 6,508 shares of Class A
Common Stock, such Class B Common Stock to have such terms and provisions as set
forth and modified herein; and (ii) each of the 1,733 shares of Class B Common
Stock issued and outstanding as of the Effective Time shall be deemed to be
converted into 1,000 shares of Class B Common Stock, such that there will
thereafter be 1,733,000 shares of Class B Common Stock outstanding in respect of
such former 1,733 shares of Class B Common Stock, and 8,241,000 shares of Class
B Common Stock outstanding in the aggregate, all such Class B Common Stock to
have such terms and provisions as set forth and modified herein. Each holder of
record of a certificate for one or more shares of Class A Common Stock or Class
B Common Stock as of the Effective Time shall be entitled to receive as soon as
practicable, and upon surrender of such certificate to the officer or agent
having charge of the stock transfer books for shares of the Corporation, a
certificate or certificates representing 1,000 shares of Class B Common Stock
for each one share of Class A Common Stock or Class B Common Stock, as the case
may be, represented by the certificate of such holder immediately prior to the
Effective Time. The shares of Class B Common Stock represented by certificates
issued pursuant to this Section shall be validly issued, fully paid and
nonassessable.
FIFTH: The text of the Restated Certificate of Incorporation
is amended and restated in its entirety as follows:
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ARTICLE I
The name of the corporation (which is hereinafter referred to as the
"Corporation") is:
NEBCO EVANS HOLDING COMPANY
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is The Corporation Trust Center, 1209 Orange Street in the City of
Wilmington, County of New Castle. The name of the Corporation's registered agent
at such address is The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation shall be to engage in any lawful act
or activity for which corporations may be organized and incorporated under the
General Corporation Law of the State of Delaware.
ARTICLE IV
Section 4.1 Capital Stock. The aggregate number of shares of all
classes of capital stock which the Corporation has authority to issue is
45,000,000 shares divided into three classes as follows:
1,000,000 shares of Class A Common Stock, par value $0.01 per share
("Class A Common Stock");
14,000,000 shares of Class B Common Stock, par value $0.01 per share
("Class B Common Stock" and, together with the Class A Common Stock,
the "Common Stock");
30,000,000 shares of Preferred Stock, par value $0.01 per share
("Preferred Stock").
Section 4.2 Common Stock. The powers, preferences and
rights, and the qualifications, limitations and restrictions of each class of
Common Stock are as follows:
(a) Voting. (1) On or prior to an Initial Public Offering (as
defined below), except as otherwise required by law by the provisions of Section
4.3 or by the resolution or
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resolutions adopted by the Board of Directors of the Corporation (the "Board")
designating the rights, powers and preferences of any series of Preferred Stock:
(i) at each annual or special meeting of stockholders, in the case of any
written consent of stockholders and for all other purposes, each holder of
record of Class B Common Stock on the relevant record date shall be entitled to
ten (10) votes for each share of Class B Common Stock standing in such person's
name on the stock transfer records of the Corporation on all matters to be voted
on by the stockholders of the Corporation, (ii) the holders of Class B Common
Stock will have the exclusive right to vote for directors and for all other
purposes, and (iii) the holders of Class A Common Stock will have no voting
rights with respect to any matters to be voted on by the stockholders of the
Corporation.
(2) Following an Initial Public Offering:
(i) At each annual or special meeting of stockholders,
in the case of any written consent of stockholders, and for all other
purposes, each holder of record of Class A Common Stock on the relevant
record date shall be entitled to one (1) vote for each share of Class A
Common Stock standing in such person's name on the stock transfer records
of the Corporation and each holder of record of Class B Common Stock on
the relevant record date shall be entitled to ten (10) votes for each
share of Class B Common Stock standing in such person's name on the stock
transfer records of the Corporation, on all matters to be voted on by the
stockholders of the Corporation;
(ii) Except as otherwise provided by applicable law, the
holders of Class A Common Stock and of Class B Common Stock shall vote as
a single class on all matters with respect to which a vote of the
stockholders of the Corporation is required under applicable law, the
Restated Certificate of Incorporation, or the Amended and Restated By-laws
of the Corporation (the "By-laws"), or on which a vote of stockholders is
otherwise duly called for by the Corporation, including, but not limited
to, the election of directors, matters concerning the sale, lease or
exchange of all or substantially all of the property and assets of the
Corporation, mergers or consolidations with another corporation or
corporations, dissolution of the Corporation, amendments to the Restated
Certificate of Incorporation, and for all other purposes. Except as
provided in this Article or by applicable law, whenever applicable law,
the Restated Certificate of Incorporation or the By-laws provide for the
necessity of an "affirmative vote of the stockholders entitled to cast at
least a majority (or any other greater percentage) of the votes which all
stockholders are entitled to cast thereon," or a "majority (or any other
greater percentage) of the voting stock," or language of similar effect,
any and all such language shall mean that Class A Common Stock and Class B
Common Stock shall vote as one class and that a majority (or any other
greater percentage) consists of a majority (or such other greater
percentage) of the total number of votes entitled to be cast in accordance
with the provisions of this Article. Neither the holders of Class A Common
Stock nor the holders of Class B Common Stock shall have cumulative voting
rights.
(3) The Corporation may, as a condition to counting the votes
cast by any holder of Class B Common Stock at any annual or special meeting of
stockholders, in the
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case of any written consent of stockholders, or for any other purpose, require
the furnishing of such affidavits or other proof as it may reasonably request to
establish that the Class B Common Stock held by such holder has not, by virtue
of the provisions of 4.2(e), been converted into Class A Common Stock.
(b) Dividends. Subject to the rights of the holders of any series
of Preferred Stock, and subject to any other provisions of the Restated
Certificate of Incorporation, holders of Class A Common Stock and Class B Common
Stock shall be entitled to receive such dividends and other distributions in
cash, stock or property of the Corporation as may be declared thereon by the
Board from time to time out of assets or funds of the Corporation legally
available therefor. If at any time a dividend or other distribution in cash or
other property (other than dividends or other distributions payable in Common
Stock or options or warrants to purchase Common Stock or securities convertible
into or exchangeable for Common Stock) is paid on Class A Common Stock or Class
B Common Stock, a like dividend or other distribution in cash or other property
will also be paid on Class B Common Stock or Class A Common Stock, as the case
may be, in an equal amount per share. If at any time a dividend or other
distribution payable in Common Stock or options or warrants to purchase Common
Stock or securities convertible into or exchangeable for Common Stock is paid on
Class A Common Stock or Class B Common Stock, a like dividend or other
distribution will also be paid on Class B Common Stock or Class A Common Stock,
as the case may be, in an equal amount per share; provided that, for this
purpose, if shares of Class A Common Stock, or options or warrants to purchase
Class A Common Stock or securities convertible into or exchangeable for Class A
Common Stock, are paid on Class A Common Stock and shares of Class B Common
Stock, or options or warrants to purchase Class B Common Stock or securities
convertible into or exchangeable for Class B Common Stock, are paid on Class B
Common Stock, in an equal amount per share of Class A Common Stock and Class B
Common Stock, such dividend or other distribution shall be deemed to be a like
dividend or other distribution. In the case of any split, subdivision,
combination or reclassification of Class A Common Stock or Class B Common Stock,
the shares of Class B Common Stock or Class A Common Stock, as the case may be,
shall also be split, subdivided, combined or reclassified so that the number of
shares of Class A Common Stock and Class B Common Stock outstanding immediately
following such split, subdivision, combination or reclassification shall bear
the same relationship to each other as did the number of shares of Class A
Common Stock and Class B Common Stock outstanding immediately prior to such
split, subdivision, combination or reclassification.
(c) Liquidation, Dissolution, Mergers, etc. In the event of any
liquidation, dissolution or winding up (either voluntary or involuntary) of the
Corporation, the holders of Class A Common Stock and the holders of Class B
Common Stock shall be entitled to receive the assets and funds of the
Corporation available for distribution, after payments to creditors and to the
holders of any Preferred Stock that may at the time be outstanding, in
proportion to the number of shares held by them, respectively, without regard to
class. In the event of any corporate merger, consolidation, purchase or
acquisition of property or stock, or other reorganization in which any
consideration is to be received by the holders of Class A Common Stock or the
holders of Class B Common Stock, the holders of Class A Common Stock and the
holders of Class B Common Stock shall receive the same consideration on a per
share basis; provided,
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however, that, if such consideration shall consist in any part of voting
securities (or of options or warrants to purchase voting securities, or of
securities convertible into or exchangeable for voting securities), the holders
of Class B Common Stock may receive, on a per share basis, voting securities
with ten (10) times the number of votes per share as those voting securities to
be received by the holders of Class A Common Stock (or options or warrants to
purchase, or securities convertible into or exchangeable for, voting securities
with ten (10) times the number of votes per share as those voting securities
issuable upon exercise of the options or warrants, or into which the convertible
or exchangeable securities may be converted or exchanged, received by the
holders of Class A Common Stock).
(d) Transfer Restriction; Change of Control of Holders. (1) No
person holding record ownership of shares of Class B Common Stock (hereinafter
called a "Class B Holder") may transfer, and the Corporation shall not register
the transfer of, such shares of Class B Common Stock, except to a Permitted
Transferee of such Class B Holder. For the purposes hereof, a "Permitted
Transferee" shall mean:
(i) In the case of a Class B Holder who is a natural
person, such Class B Holder's "Permitted Transferee" means (A) the present
or former spouse of such Class B Holder, a lineal descendant of such Class
B Holder or the present or former spouse of such Class B Holder, and the
present or former spouse of any such lineal descendent, (B) the trustee of
a trust (including a voting trust) principally for the benefit of such
Class B Holder and/or persons who are direct or indirect Permitted
Transferees of such Class B Holder, provided that such trust may grant a
general or special power of appointment to such Class B Holder and/or any
persons who are direct or indirect Permitted Transferees of such Class B
Holder, and may permit trust assets to be used to pay taxes, legacies and
other obligations of the trust or the estate of such Class B Holder and/or
any persons who are direct or indirect Permitted Transferees of such Class
B Holder, payable by reason of the death of such Class B Holder and/or any
persons who are direct or indirect Permitted Transferees of such Class B
Holder, and (C) the executor, administrator, guardian or personal
representative of the estate of such Class B Holder.
(ii) In the case of any Class B Holder, such Class B
Holder's "Permitted Transferee" means, in addition to any other Permitted
Transferee hereunder, (A) a corporation, limited liability company or
partnership controlled by such Class B Holder and/or persons who are
direct or indirect Permitted Transferees of such Class B Holder, provided
that if control of such a corporation, limited liability company or
partnership (or of any survivor of a merger or consolidation of such a
corporation, limited liability company or partnership), is acquired by any
person who is not within such class of persons, all shares of Class B
Common Stock then held by such corporation, limited liability company or
partnership, as the case may be, shall be deemed, without further act on
the part of the holder thereof or the Corporation, to be converted into
shares of Class A Common Stock, and stock certificates formerly
representing such shares of Class B Common Stock shall thereupon and
thereafter be deemed to represent such number of shares of Class A Common
Stock as equals the number of shares of Class A Common Stock into
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which such shares of Class B Common Stock could be converted pursuant to
the terms hereof, and (B) the estate of a bankrupt or insolvent Class B
Holder.
(iii) In the case of a Class B Holder which is a
trustee pursuant to a trust, such Class B Holder's "Permitted Transferee"
means (A) the person who contributed the shares of Class B Common Stock in
question to such trust (provided that there has been no change in control
of such person other than to a Permitted Transferee of such person), and
(B) a direct or indirect Permitted Transferee of the person (without
giving effect to any change in control of such person) who contributed the
shares of Class B Common Stock in question to such trust.
(iv) In the case of a Class B Holder which is a
corporation or limited liability company, such Class B Holder's "Permitted
Transferee" means any direct or indirect controlling stockholder of such
corporation or limited liability company (but not any other stockholder of
such corporation or limited liability company), and any direct or indirect
Permitted Transferee of such controlling stockholder, and the survivor of
any merger or consolidation of such corporation or limited liability
company, provided that if control of such a corporation or limited
liability company (or of any survivor of a merger or consolidation of such
a corporation or limited liability company) is acquired by any person who
is not within such class of persons, whether as a result of a merger or
consolidation or otherwise, all shares of Class B Common Stock then held
by such corporation or limited liability company shall be deemed, without
further act on the part of the holder thereof or the Corporation, to be
converted into shares of Class A Common Stock, and stock certificates
formerly representing such shares of Class B Common Stock shall thereupon
and thereafter be deemed to represent such number of shares of Class A
Common Stock as equals the number of shares of Class A Common Stock into
which such shares of Class B Common Stock could be converted pursuant to
the terms hereof.
(v) In the case of a Class B Holder which is a
partnership, such Class B Holder's "Permitted Transferee" means any direct
or indirect controlling partner of such partnership (but not any other
partner of such partnership), and any direct or indirect Permitted
Transferee of such controlling partner, and the survivor of a merger or
consolidation of such partnership, provided that if control of such a
partnership (or of any survivor of a merger or consolidation of such a
partnership) is acquired by any person who is not within such class of
persons, whether as a result of a merger or consolidation or otherwise,
all shares of Class B Common Stock then held by such partnership shall be
deemed, without further act on the part of the holder thereof or the
Corporation, to be converted into shares of Class A Common Stock, and
stock certificates formerly representing such shares of Class B Common
Stock shall thereupon and thereafter be deemed to represent such number of
shares of Class A Common Stock as equals the number of shares of Class A
Common Stock into which such shares of Class B Common Stock could be
converted pursuant to the terms hereof.
(vi) In the case of a Class B Holder which is the
estate of a deceased Class B Holder, or which is the estate of a bankrupt
or insolvent Class B Holder,
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such Class B Holder's "Permitted Transferee" means a direct or indirect
Permitted Transferee of such deceased, bankrupt or insolvent Class B
Holder.
(vii) In the case of any Class B Holder, such Class B
Holder's "Permitted Transferee" means, without limitation of the
foregoing, any direct or indirect Permitted Transferee of a Permitted
Transferee of such Class B Holder. For purposes hereof, whether a person
is a Permitted Transferee of a Permitted Transferee shall be determined in
the same manner as whether a person is a Permitted Transferee of a Class B
Holder.
(2) Notwithstanding anything to the contrary set forth
herein, but subject to the provisions of Section 4.2(d)(4), in the event of any
direct or indirect transfer of beneficial ownership of any Class B Common Stock
which, had such transfer also been a transfer of record ownership of such Class
B Common Stock, would not have been to a Permitted Transferee, all of such
shares of Class B Common Stock shall be deemed, without further act on the part
of the holder thereof or the Corporation, to be converted into shares of Class A
Common Stock, and stock certificates formerly representing such shares of Class
B Common Stock shall thereupon and thereafter be deemed to represent such number
of shares of Class A Common Stock as equals the number of shares of Class A
Common Stock into which such shares of Class B Common Stock could be converted
pursuant to the terms hereof.
(3) Notwithstanding anything to the contrary set forth
herein, any event which would result in the automatic conversion of Class B
Common Stock into Class A Common Stock shall not result in such conversion if
the record holder of such Class B Common Stock is a corporation, limited
liability company or partnership as to which both investment and voting
discretion with respect to the Class B Common Stock held by such corporation,
limited liability company or partnership is directly or indirectly exercised,
both before and after such event, by such record holder or any Permitted
Transferee of such record holder; provided that no transaction or event intended
to avoid the automatic conversion provisions of this Section 4.2(d) shall in any
event be entitled to the benefit of this Section 4.2(d)(3).
(4) Notwithstanding anything to the contrary set forth
herein, any Class B Holder may pledge such Class B Holder's shares of Class B
Common Stock to a pledgee pursuant to a bona fide pledge of such shares as
collateral security for any indebtedness or other obligation of any person,
provided that, even if such shares are registered in the name of the pledgee or
its nominee (which registration is hereby expressly permitted and shall not be
considered a transfer hereunder), such shares shall remain subject to the
provisions of this Section 4.2(d). In the event of foreclosure or other final
disposition by the pledgee (unless the transferee is otherwise a direct or
indirect Permitted Transferee of such Class B Holder), and from and after such
foreclosure, such pledged shares of Class B Common Stock shall be deemed,
without further act on the part of the holder thereof or the Corporation, to be
converted into shares of Class A Common Stock, and stock certificates formerly
representing such shares of Class B Common Stock shall thereupon and thereafter
be deemed to represent such number of shares of Class A Common Stock as equals
the number of shares of Class A Common Stock into which such shares of Class B
Common Stock could be converted pursuant to the terms hereof.
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<PAGE>
(5) For purposes of this Article IV:
(i) The term "Initial Public Offering" shall mean the
completion of a sale of shares of the Common Stock of the Corporation
pursuant to an effective registration statement under the Securities Act
of 1933, as amended (other than a registration statement relating to
shares of Common Stock issuable upon exercise of employee stock options or
in connection with an employee benefit plan of the Corporation or a
subsidiary or affiliate) following which either (x) 25% or more of the
issued and outstanding shares of Common Stock of the Corporation is
publicly held and freely transferable or (y) shares of Common Stock of the
Corporation with a market value of at least $100,000,000 are publicly held
and freely transferable or (z) the Board shall, in its discretion, deem an
Initial Public Offering to have occurred.
(ii) The relationship of any person that is derived by
or through legal adoption shall be considered a natural one.
(iii) Each joint owner of shares of Class B Common
Stock shall be considered a "Class B Holder" of such shares.
(iv) A minor for whom shares of Class B Common Stock
are held pursuant to a Uniform Gifts to Minors Act or similar law shall be
considered a Class B Holder of such shares.
(v) The term "beneficial ownership" (including, with a
correlative meaning, the term "beneficially own"), shall have the meaning
assigned such term in Rules 13d-3 and 13d-5 under the Securities and
Exchange Act of 1934, as amended, except that a person shall be deemed to
have "beneficial ownership" of all shares that any such person has the
right to acquire, whether such right is exercisable immediately or only
after the passage of time.
(vi) Unless otherwise specified, the term "person"
means both natural persons and legal entities.
(vii) The term "transfer" means any direct or indirect
transfer (including by sale, assignment, gift, bequest, appointment or
otherwise), and shall also include, with respect to any holder of Class B
Common Stock, any direct or indirect change in control of such person.
(viii) The term "control" (including, with correlative
meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the
management and policies of that person or entity, whether through the
ownership of voting securities, by contract or otherwise.
(6) Notwithstanding anything to the contrary herein, the
Corporation shall not register the transfer of any shares of Class B Common
Stock, unless the transferee
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and the transferor of such Class B Common Stock have furnished such affidavits
and other proof as the Corporation may reasonably request to establish that such
proposed transferee is a Permitted Transferee. In addition, upon any purported
transfer of shares of Class B Common Stock not permitted hereunder, all shares
of Class B Common Stock purported to be so transferred shall be deemed, without
further act on the part of the holder thereof or the Corporation, to be
converted into shares of Class A Common Stock, and stock certificates formerly
representing such shares of Class B Common Stock shall thereupon and thereafter
be deemed to represent such number of shares of Class A Common Stock as equals
the number of shares of Class A Common Stock into which such shares of Class B
Common Stock could be converted pursuant to the terms hereof, and the
Corporation shall register such shares of Class A Common Stock in the name of
the person to whom such shares of Class B Common Stock were purported to be
transferred.
(7) The Corporation shall include on the certificates for
shares of Class B Common Stock a legend referring to the restrictions on
transfer and registration of transfer imposed by this Section 4.2(d).
(e) Automatic Conversion of Class B Common Stock. In the event that
the number of shares of Class B Common Stock issued and outstanding at any time
shall constitute less than ten percent (10%) of the total number of shares of
Class A Common Stock and Class B Common Stock issued and outstanding at such
time, then, without further act on the part of the holder thereof or the
Corporation, all shares of Class B Common Stock then issued and outstanding
shall be deemed to be converted into shares of Class A Common Stock, and stock
certificates formerly representing such shares of Class B Common Stock shall
thereupon and thereafter be deemed to represent such number of shares of Class A
Common Stock as equals the number of shares of Class A Common Stock into which
such shares of Class B Common Stock could be converted pursuant to the terms
hereof. For purposes of the immediately preceding sentence, any shares of Class
A Common Stock and Class B Common Stock repurchased or otherwise acquired by the
Corporation shall no longer be deemed "outstanding" from and after the date of
repurchase.
(f) Optional Conversion of Class B Common Stock. If, at any time,
any holder of shares of Class B Common Stock shall request, upon notice by such
holder to the Corporation, that such holder's shares of Class B Common Stock be
converted into shares of Class A Common Stock, then, without further action on
the part of the holder thereof or the Corporation, all such shares of Class B
Common Stock which are the subject of such request shall thereupon and
thereafter be deemed to be converted into shares of Class A Common Stock, and
stock certificates formerly representing such shares of Class B Common Stock
shall thereupon and thereafter be deemed to represent an equal number of shares
of Class A Common Stock.
(g) Power to Sell and Purchase Shares. The Corporation shall have
the power, subject to any applicable agreements of the Corporation, to issue and
sell all or any part of any class of stock herein or hereafter authorized to
such persons, and for such consideration, as the Board shall from time to time,
in its discretion, determine, whether or not greater consideration could be
received upon the issue or sale of the same number of shares of another class,
and as otherwise permitted by law. The Corporation shall have the power to
purchase any class of stock herein or hereafter authorized from such persons,
and for such consideration, as the Board shall from time to time, in its
discretion, and with the consent of such persons, determine, whether or not less
consideration could be paid upon the purchase of the same number of shares of
another class, and as otherwise permitted by law.
(h) Rights Otherwise Identical. Except as expressly set forth
herein, the rights of the holders of Class A Common Stock and the rights of the
holders of Class B Common Stock shall be in all respects identical.
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Section 4.3 Preferred Stock. Shares of Preferred Stock may be
issued from time to time in one or more series. The Board of Directors of the
Corporation is hereby authorized to fix the voting rights, if any, designations,
powers, preferences and the relative, participation, optional or other rights,
if any, and the qualifications, limitations or restrictions thereof, of any
unissued series of Preferred Stock; and to fix the number of shares constituting
such series, and to increase or decrease the number of shares of any such series
(but not below the number of shares thereof then outstanding).
Section 4.4 Existing Preferred Stock. (a) The voting rights, if
any, designations, powers, preferences and the relative, participating, optional
or other rights, if any, and the qualifications, limitations or restrictions
thereof, of the 8% Senior Convertible Preferred Stock ("Senior Convertible
Preferred") and the 11 1/4% Senior Redeemable Exchangeable Preferred Stock due
2008 (the "Senior Redeemable Preferred"), each series of which is outstanding as
of the date of this Restated Certificate of Incorporation, shall continue as
previously fixed by the Board in the Certificates of Designations attached as
Exhibit A, with respect to the Senior Convertible Preferred (the "Senior
Convertible Preferred Certificate of Designations"), and Exhibit B, with respect
to the Senior Redeemable Preferred.
(b) After the filing of this Restated Certificate of Incorporation,
in accordance with the terms of the Senior Convertible Preferred Certificate of
Designations, (i) shares of the Senior Convertible Preferred shall cease to be
convertible into shares of Class A Common Stock but shall instead be convertible
into shares of Class B Common Stock and (ii) the Conversion Ratio (as defined in
Section 4 of the Senior Convertible Preferred Certificate of Designations) shall
cease to be equal to .8766 but shall instead be equal to 876.6 (the "New
Conversion Ratio"). All provisions of the Senior Convertible Preferred
Certificate of Designations, including anti-dilution provisions, which reference
the Class A Common Stock (defined in the Senior Convertible Preferred
Certificate of Designations as the "Common Stock"), the Conversion Ratio or any
particular number of shares of Class A Common Stock shall remain in full force
and effect except that such provisions shall henceforth reference the Class B
Common Stock, the New Conversion Ratio or a number of shares of Class B Common
Stock equal to 1,000 times the number of shares of Class A Common Stock
previously mentioned, respectively, and the other terms of the Senior
Convertible Preferred Certificate of Designations shall remain in full force and
effect, except to the extent that they contradict the foregoing.
ARTICLE V
Unless and except to the extent that the By-laws shall so require,
the election of directors of the Corporation need not be by written ballot.
ARTICLE VI
In furtherance and not in limitation of the powers conferred by law,
the Board may make, alter and repeal the By-laws as provided therein.
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ARTICLE VII
The Corporation reserves the right at any time from time to time to
amend, alter, change or repeal any provision contained in this Restated
Certificate of Incorporation, and any other provisions authorized by the laws of
the State of Delaware at the time in force may be added or inserted, 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 Restated Certificate of
Incorporation in its present form or as hereafter amended are granted subject to
the right reserved in this Article.
ARTICLE VIII
Section 8.1 Elimination of Certain Liability of Directors. 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, except for liability (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 General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the director derived an
improper personal benefit.
Section 8.2 Indemnification and Insurance.
(a) Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the General Corporation Law of the State of Delaware, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide prior
to such amendment), against all expense, liability and loss (including
attorneys' fees, judgment, fines, amounts paid or to be paid in settlement, and
excise taxes or penalties arising under the Employee Retirement Income Security
Act of 1974) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit of
his or her heirs, executors and administrators; provided, however, that, except
as provided in paragraph (b) hereof, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board. The right to indemnification conferred in this Section
shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in de-
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<PAGE>
fending any such proceeding in advance of its final disposition; provided,
however, that, if the General Corporation Law of the State of Delaware requires,
the payment of such expenses incurred by a director or officer in his or her
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the Corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this Section or
otherwise. The Corporation may, by action of the Board, provide indemnification
to employees and agents of the Corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
(b) Right of Claimant to Bring Suit. If a claim under paragraph (a)
of this Section is not paid in full by the Corporation within thirty days after
a written claim has been received by the Corporation, the claimant may at any
time thereafter bring suit against the Corporation to recover the unpaid amount
of the claim and, if successful in whole or in part, the claimant shall be
entitled to be paid also the expense of prosecuting such claim. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the Corporation) that the claimant has not met the standards of
conduct which make it permissible under the General Corporation Law of the State
of Delaware for the Corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including its Board, independent legal
counsel, or 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 or she has met the applicable standard of conduct
set forth in the General Corporation Law of the State of Delaware, nor an actual
determination by the Corporation (including its Board, 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.
(c) Non-Exclusivity of Rights. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, provision of
the Restated Certificate of Incorporation, By-law, agreement, vote of
stockholders or disinterested directors or otherwise.
(d) Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the General Corporation Law of the State of Delaware.
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IN WITNESS WHEREOF, said Nebco Evans Holding Company has caused this
certificate to be sign, by its Executive Officer this 19th day of May, 1998.
By: /s/ John V. Holten
John V. Holten
Chairman and Chief Executive
Officer
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EXHIBIT A
NEBCO EVANS HOLDING COMPANY
---------------------------------------
CERTIFICATE OF DESIGNATION
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
---------------------------------------
8% Senior Convertible Preferred Stock
---------------------------------------
The undersigned, A. Petter 0stberg, Secretary of Nebco Evans Holding
Company, a Delaware corporation (the "Corporation"), DOES HEREBY CERTIFY that
the following resolution has been duly adopted by the Board of Directors of the
Corporation:
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation (the "Board of Directors")
by the provisions of the Certificate of Incorporation of the Corporation (the
"Certificate of Incorporation"), there hereby is created, out of the shares of
Preferred Stock of the Corporation authorized in Article IV of the Certificate
of Incorporation (the "Preferred Stock"), a series of the Preferred Stock of the
Corporation consisting of 300 shares, which series shall have the following
powers, designations, preferences and relative, participating, optional and
other rights, and the following qualifications, limitations and restrictions (in
addition to the powers, designations, preferences and relative, participating,
optional and other rights, and the qualifications, limitations and restrictions,
set forth in the Certificate of Incorporation which are applicable to the
Preferred Stock):
1. Designation and Amount. This series of Preferred Stock shall be
8% Senior Convertible Preferred Stock (the "Senior Convertible
Preferred"), and the authorized number of shares constituting such series
shall be 300. The liquidation
<PAGE>
preference of the Convertible Preferred shall be $10,000 per share, plus
any accumulated and unpaid dividends as required pursuant to Section 3
hereof.
2. Dividends. The holders of record of shares of Senior Convertible
Preferred shall be entitled to receive when and as declared by the Board
of Directors out of funds legally available therefor, cash dividends at
the rate of $800 per share per annum, accruing and earned monthly, payable
annually on January 15, in preference to and in priority over dividends
upon the common stock or any other preferred stock of the Corporation
(collectively, the "Junior Stock"). Dividends on each share of Senior
Convertible Preferred shall accumulate, whether or not declared, from the
date of its issuance. The holders of shares of Senior Convertible
Preferred shall not be entitled to any dividends other than the cash
dividend provided for in this Section 2. During any period when the
Corporation has failed to pay a dividend on the Senior Convertible
Preferred for any preceding annual period and until all unpaid dividends
payable, whether or not declared, on the outstanding Senior Convertible
Preferred shall have been paid in full or declared and set apart for
payment, the Corporation shall not: (i) declare or pay dividends, or make
any other distributions, on any shares of Junior Stock, other than
dividends or distributions payable in Junior Stock, or (ii) redeem,
purchase or otherwise acquire for consideration any shares of Junior
Stock, other than redemptions, purchases or other acquisitions of shares
of Junior Stock in exchange for any shares of Junior Stock.
3. Liquidation. In the event of a liquidation, dissolution or
winding up of the Corporation, the holders of shares of Senior Convertible
Preferred shall be entitled to receive out of the assets of the
Corporation an amount in cash equal to $10,000.00 per share, plus any
accumulated and unpaid dividends thereon to the date fixed for
distribution, in preference to and in priority over any such distribution
upon shares of Junior Stock.
4. Conversion. Holders of shares of Senior Convertible Preferred
shall, after giving notice to the Corporation as required pursuant to this
Section 4, be entitled to convert each such share into 0.8766 (the
"Conversion Ratio") of a share of Class A Common Stock of the Corporation,
par value $0.01 per share (the "Common Stock") (i) in the event of an
initial registered public offering of the shares of Common Stock (an
"IPO"), (ii) in the event of the acquisition of a majority of the
outstanding shares of Common Stock by a person or entity other than (a)
Nebco Evans Distributors, Inc. ("Distributors"), (b) a person or entity
that directly, or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, Distributors or the
Corporation (an "Affiliate") or (c) a successor or assign of Distributors
or an Affiliate (any of (a) through (c), a "Sale," and, together with an
IPO, an "Extraordinary Transaction"), or (iii) on January 15, 2004. If as
of the date of the conversion there are any accrued but unpaid dividends
on the outstanding Senior Convertible Preferred (including any monthly
dividends that have accrued for the current annual period but are not
otherwise payable until the end of the annual period), such dividends
shall be paid in full to the holders of the Senior Convertible Preferred
as of the date of Conversion. A holder of shares of Senior Convertible
Preferred wishing to effect a
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conversion pursuant to Section 4(i) or 4(ii) hereof shall give notice to
the Corporation of such holder's decision to exercise the conversion
rights (a "Conversion Notice") at least twenty (20) days prior to the date
on which the relevant Extraordinary Transaction is scheduled to occur, as
set forth in the Corporation Notice issued pursuant to Section 9 hereof
(such date, the "Announced Transaction Date"), unless such holder receives
such Corporation Notice fewer than twenty-five (25) days prior to the
Announced Transaction Date, in which case the Conversion Notice must be
received by the Corporation at the earlier of (A) the day which is 5 days
after the date on which such holder received the Corporation Notice or
(B) 10 a.m. New York City time on the day before the Announced Transaction
Date. Any conversion effected pursuant to Section 4(i) or 4(ii) hereof
shall occur simultaneously with the consummation of the relevant
Extraordinary Transaction, provided that in the event such Extraordinary
Transaction does not occur within 120 days of the Announced Transaction
Date, the holder of shares who issued the Conversion Notice shall have the
right to rescind such notice by notification to the Corporation to that
effect. Any Conversion effected pursuant to Section 4(iii) shall occur at
5 p.m. New York City time on January 15, 2004.
In the event of a stock split or a declaration of a dividend payable
in the common shares of the Corporation, the Conversion Ratio shall be
equitably adjusted, but no adjustment shall be required in the event
additional common shares of the Corporation are issued due to the exercise
of stock options, warrants or pursuant to other arrangements or sales to
third parties, other than as set forth below. In case the Corporation
shall issue Common Stock (or options, rights or warrants to purchase
shares of Common Stock) (collectively, "Options") or other securities
convertible into or exchangeable or exercisable for shares of Common Stock
(such other securities, collectively, "Convertible Securities") at a price
per share (or having an effective exercise, exchange or conversion price
per share together with the purchase price thereof) less than the Fair
Market Value (as defined below) on the date such Common Stock (or Options
or Convertible Securities) is sold or issued (provided that no sale of
securities pursuant to an Extraordinary Transaction or any underwritten
public offering shall be deemed to be for less than Fair Market Value),
then in each such case the Conversion Ratio shall thereafter be adjusted
by multiplying the Conversion Ratio immediately prior to the date of
issuance of such Common Stock (or Options or Convertible Securities) by a
fraction, the numerator of which shall be (x) the sum of (i) the number of
shares of Common Stock on a fully diluted basis ("Common Share
Equivalents") represented by all securities outstanding immediately prior
to such issuance and (ii) the number of additional Common Share
Equivalents represented by all securities so issued multiplied by (y) the
Fair Market Value immediately prior to the date of such issuance, and the
denominator of which shall be (x) the product of (A) the Fair Market Value
immediately prior to the date of such issuance and (B) the number of
Common Share Equivalents represented by all securities outstanding
immediately prior to such issuance plus (y) the aggregate consideration
received by the Corporation for the total number of securities so issued
plus, (z) in the case of Options or Convertible Securities, the additional
consideration required to be received by the Corporation upon the
exercise, exchange or conversion of such securities; provided that no
adjustment shall be required in respect of issuances of
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Common Stock (or options to purchase Common Stock) pursuant to stock
option or other employee benefit plans in effect on the date hereof, or
approved by the Board of Directors of the Corporation after the date
hereof; provided further that in the event that issuances of Common Stock
(or options to purchase Common Stock) after the date hereof pursuant to
stock option or other employee benefit plans approved by the Board of
Directors of the Corporation after the date hereof exceed in the aggregate
eight (8) percent of the total Common Share Equivalents represented by all
securities outstanding immediately subsequent to the issuance of the
Senior Convertible Preferred (the "8 Percent Mark"), the Conversion Ratio
shall be adjusted according to the formula set forth in Section 4 hereof
for any such issuance in excess of the 8 Percent Mark. Notwithstanding
anything herein to the contrary, (1) no further adjustment to the
Conversion Ratio shall be made upon the issuance or sale of Common Stock
pursuant to (x) the exercise of any Options or (y) the conversion or
exchange of any Convertible Securities, if in each case the adjustment in
the Conversion Ratio was made as required hereby upon the issuance or sale
of such Options or Convertible Securities or no adjustment was required
hereby at the time such Option or Convertible Security was issued, (2) no
adjustment to the Conversion Ratio shall be made upon the issuance or sale
of Common Stock upon the exercise of any Options existing on the date
hereof, without regard to the exercise price thereof; and (3) no
adjustment to the Conversion Ratio shall be made upon the issuance or sale
of Common Stock (or Options or Convertible Securities) to any Person or
group that, at the time of such issuance or sale, is not (A) an Affiliate
or (B) a holder, directly or indirectly, of at least five percent (5%) of
the outstanding equity securities of the Corporation, provided that this
clause (B) shall be of no force or effect from and after an IPO. "Fair
Market Value" as at any date of determination shall mean the fair market
value of the Common Stock as determined in good faith by a nationally
recognized firm of investment bankers reasonably acceptable to the
Corporation and the holders of a majority of the outstanding shares of
Senior Convertible Preferred (the fees for which shall be shared equally
by the holders of the Senior Convertible Preferred and the Corporation);
provided however that if, at any date of determination of the fair market
value of the Common Stock, shares of Common Stock shall then be publicly
traded, the fair market value shall be the market price of the Common
Stock on such date.
The Corporation shall, so long as any share of this Series is
outstanding, reserve and keep available out of its authorized and unissued
common shares sufficient number of shares of Common Stock required to
effect conversion of all shares of this Series. The number of shares of
Common Stock into which shares of Senior Convertible Preferred are
convertible shall be rounded to the nearest whole share.
5. Mandatory Redemption. On January 15, 2004 (the "Redemption
Date"), all outstanding shares of Convertible Preferred shall be redeemed
at a redemption price, payable in cash, equal to the per share liquidation
preference thereof, plus, in each case, an amount equal to accrued and
unpaid dividends thereon (whether or not earned or declared), if any, to
the Redemption Date.
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6. Optional Redemption. If an Extraordinary Transaction has
occurred or is to occur, a Corporate Notice has been given in accordance
with Section 9 hereof and a Conversion Notice has not been given in the
required time pursuant to Section 4 hereof, then, at the option of the
Corporation, shares of Senior Convertible Preferred may be redeemed at any
time as a whole or in part from time to time, at a redemption price,
payable in cash, equal to the per share liquidation preference thereof,
plus, in each case, an amount equal to accrued and unpaid dividends
thereon (whether or not earned or declared) if any, to the date fixed for
redemption.
7. Voting Rights. No holder of shares of Senior Convertible
Preferred shall be entitled to vote on any matters brought to a vote
before the shareholders of the Corporation, except as otherwise provided
herein or by the General Corporation Law of the State of Delaware.
8. Consideration for Issuance of Shares. All shares of Convertible
Preferred shall be deemed to be fully paid and nonassessable upon the
issuance thereof.
9. Notice of Holders of Certain Transactions. The Corporation shall
cause a notice (the "Corporation Notice") to be mailed to the holders of
record of shares of Senior Convertible Preferred at their respective
addresses as the same shall appear on the books of the Corporation, in
case:
a. The Corporation shall declare a dividend (or any
other distribution) on its common stock;
b. Of any reclassification of capital stock of the
Corporation or of any consolidation or merger to which the
Corporation is a party and for which approval of any shareholders of
the Corporation is required, or of the sale or transfer of all or
substantially all of the assets of the Corporation;
c. Of the voluntary or involuntary dissolution, liquidation
or winding up of the Corporation;
d. Of an Extraordinary Transaction.
Such Corporation Notice shall be mailed at least twenty (20) days
prior to the applicable record date or other date hereinafter referred to,
and in the case of an Extraordinary Transaction, by the later of (i) sixty
(60) days prior to the date on which the Extraordinary Transaction is then
scheduled to occur or (ii) within two (2) days after such time as the
Board of Directors resolves to pursue the Extraordinary Transaction. The
Corporation Notice shall specify (A) the date on which a record is to be
taken for the purpose of such dividend, redemption, distribution of rights
or, if a record is not to be taken, the date as of which the holders of
shares of common stock of record to be entitled to such dividend,
distribution, redemption or rights are to be determined, (B) the date on
which, in connection with such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up or other
Extraordinary Transaction, it is expected
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that holders of shares of common stock of record shall be entitled to
exchange their shares of common stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up, and (iii) the date on
which an Extraordinary Transaction is scheduled to occur. Any Corporation
Notice delivered in connection with an Extraordinary Transaction shall be
accompanied by any proxy materials provided to holders of Common Stock at
such time as such materials are so provided.
10. No Other Rights. The shares of Senior Convertible Preferred
shall not have any relative, participating, optional or other special
rights or powers other than as set forth above and in the Certificate of
Incorporation.
11. Certificates. Each certificate for shares of Convertible
Preferred shall bear a legend incorporating a certified copy of this
Resolution which shall be authenticated by the President or Vice President
of the Corporation and appended to each such certificate.
12. Senior Stock. The Corporation shall not issue or create Senior
Stock without the consent of the holders of Senior Convertible Preferred.
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<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation to be signed by A. Petter 0stberg, its Secretary, this 20th day of
November, 1996.
NEBCO EVANS HOLDING COMPANY
By: /s/ A. Petter 0stberg
A. Petter 0stberg
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EXHIBIT B
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS OF PREFERRED
STOCK AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
OF
11 1/4% SENIOR REDEEMABLE EXCHANGEABLE
PREFERRED STOCK DUE 2008
OF
NEBCO EVANS HOLDING COMPANY
-------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
_________________________
Nebco Evans Holdings Company (the "Company"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, certifies
that pursuant to the authority contained in Article IV of its Amended and
Restated Certificate of Incorporation, as amended to date (the "Certificate of
Incorporation") and in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware, the Board of Directors, by
unanimous written consent dated February 27, 1998 duly approved and adopted the
following resolution (this "Certificate of Designations") which resolution
remains in full force and effect on the date hereof:
RESOLVED, that pursuant to the authority vested in the Board of Directors
by the Amended and Restated Certificate of Incorporation, as amended, the Board
of Directors does hereby designate, create, authorize and provide for the issue
of 11 1/4% Senior Redeemable Exchangeable Preferred Stock due 2008 (the
"Preferred Stock"), par value $0.01 per share, with a liquidation preference of
$100 per share, consisting of 8,000,000 shares of Preferred Stock: (i) 2,500,000
of which will be issued on March 6, 1998 and (ii) 5,500,000 shares to be
reserved for future issuance if the Company elects to pay dividends on the
Preferred Stock in additional shares of Preferred Stock in accordance with the
terms of the Certificate of Designations. Pursuant to the terms of the
Certificate of Designations the Corporation may exchange the Preferred Stock for
shares of new 11 1/4% Senior Redeemable Exchangeable Preferred Stock due 2008
(the "New Preferred Stock" and, together with the Preferred Stock, the
"Exchangeable Preferred Stock"), provided that no shares of the New Preferred
Stock may be issued, except upon the surrender and cancellation of such number
of shares of the Preferred Stock having an aggregate Liquidation Preference
equal to the aggregate Liquidation Preference of the shares of the New Preferred
Stock so issued. The Exchangeable Preferred Stock shall have the following
powers, preferences and relative, participating, optional and other special
rights, and qualifications, limitations and restrictions thereof as follows:
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1. CERTAIN DEFINITIONS
Unless the context otherwise requires, the terms defined in this Section 1
shall have, for all purposes of this resolution, the meanings herein specified
(with terms defined in the singular having comparable meanings when used in the
plural).
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise. For purposes of this
Certificate of Designations, beneficial ownership of 10% or more of the Voting
Stock of a Person shall be deemed to be control.
"Applicable Redemption Price" means a price per share equal to the
following redemption prices specified below (expressed as percentages of the
Liquidation Preference thereof), plus, in each case, without duplication,
accumulated and unpaid dividends (including an amount in cash equal to a
prorated dividend for any partial dividend period) and Liquidated Damages, if
any, thereon to the date of redemption if redeemed during the 12-month period
commencing on March 1 of each of the years set forth below:
2003................................... 105.625%
2004................................... 103.750%
2005 .................................. 101.875%
2006 and thereafter.................... 100.000%
"Asset Sale" means (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback) other than sales of inventory in the ordinary course of business
consistent with past practices and other than a Receivables Transaction
(provided that the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole will be governed by the provisions of Section 8 hereof and/or
Section 14 and not by the provisions of Section 9 hereof), and (ii) the issue or
sale by the Company or any of its Restricted Subsidiaries of Equity Interests of
any of the Company's Restricted Subsidiaries, in the case of either clause (i)
or (ii), whether in a single transaction or a series of related transactions (a)
that have a fair market value in excess of $3.0 million or (b) for net proceeds
in excess of $3.0 million.
<PAGE>
Notwithstanding the foregoing: (i) a transfer of assets by the Company to a
Wholly Owned Restricted Subsidiary or by a Wholly Owned Restricted Subsidiary to
the Company or to another Wholly Owned Restricted Subsidiary, (ii) an issuance
of Equity Interests by a Wholly Owned Restricted Subsidiary to the Company or to
another Wholly Owned Restricted Subsidiary, and (iii) a Restricted Payment that
is permitted by Section 11 hereof will not be deemed to be Asset Sales.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than one
year from the date of acquisition, (iii) certificates of deposit and eurodollar
time deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case, with any domestic commercial bank having
capital and surplus in excess of $500 million and a Thompson Bank Watch Rating
of "B" or better, (iv) repurchase obligations with a term of not more than seven
days or on demand for underlying securities of the types described in clauses
(ii) and (iii) above entered into with any financial institution meeting the
qualifications specified in clause (iii) above and (v) commercial paper having
the highest rating at acquisition obtainable from Moody's Investors Service,
Inc. or Standard & Poor's Corporation and in each case maturing within six
months after the date of acquisition and (vi) securities quoted by the Nasdaq
National Market or listed on a United States, Canadian or Western European
national securities exchange.
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"Certificated Securities" has the meaning set forth in Section 25 below.
"Change of Control" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange
Act) other than the Principals or their Related Parties (as defined below), (ii)
the adoption of a plan relating to the liquidation or dissolution of the
Company, (iii) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principals and their Related
Parties, becomes the "beneficial owner" (as such term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that a person shall be deemed to
have "beneficial ownership" of all securities that such person has the right to
acquire, whether such right is currently exercisable or is exercisable only
upon the occurrence of a subsequent condition), directly or indirectly, of more
than 50% of the Voting Stock of the Company (measured by voting power rather
than number of shares), (iv) the first day on which a majority of the members
of the Board of Directors of the Company are not Continuing Directors or (v)
the Company consolidates with, or merges with or into, any Person or sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates with,
or merges with or into, the Company, in any such event pursuant to a transaction
in which any of the outstanding Voting Stock of the Company is converted into
or exchanged for cash, securities or other property, other than any such
transaction where the Voting Stock of the Company outstanding immediately prior
to such transaction is converted into or exchanged for Voting Stock (other than
Disqualified Stock) of the surviving or transferee Person constituting a
majority of the outstanding shares of such Voting Stock of such surviving or
transferee Person (immediately after giving effect to such issuance).
"Change of Control Offer" has the meaning set forth in Section 8 below.
"Change of Control Payment" has the meaning set forth in Section 8 below.
"Change of Control Payment Date" has the meaning set forth in Section 8
below.
"Common Stock" of any Person means Capital Stock of such Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Closing Date" means the date on which shares of Preferred Stock are first
issued.
"Commission" means the Securities and Exchange Commission.
3
<PAGE>
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount
equal to any extraordinary loss plus any net loss realized in connection with an
Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Subsidiaries for such period, to the extent that
such provision for taxes was included in computing such Consolidated Net Income,
plus (iii) consolidated interest expense of such Person and its Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations), to the extent that any
such expense was deducted in computing such Consolidated Net Income, plus (iv)
depreciation, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) and other non-cash expenses (excluding any such non-cash
expense to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense that was
paid in a prior period) of such Person and its Subsidiaries for such period to
the extent that such depreciation, amortization and other non-cash expenses were
deducted in computing such Consolidated Net Income, plus (v) projected
quantifiable improvements in operating results (on an annualized basis) due to
cost reductions calculated in good faith by the Company or one of its Restricted
Subsidiaries, as evidenced by (A) in the case of cost reductions of less than
$10.0 million, an Officers' Certificate delivered to the Trustee and (B) in the
case of cost reductions of $10.0 million or more, a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the Trustee, minus
(vi) non-cash items increasing such Consolidated Net Income for such period.
Notwithstanding the foregoing, the provision for taxes on the income or profits
of, and the depreciation and amortization and other non-cash charges of, a
Subsidiary of the referent Person shall be added to Consolidated Net Income to
compute Consolidated Cash Flow only to the extent that a corresponding amount
would be permitted at the date of determination to be dividended to the Company
by such Subsidiary without prior governmental approval (that has not been
obtained), and without direct or indirect restriction pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Subsidiary or
its stockholders.
"Consolidated Net Income" means, with respect to any Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that (i) the Net Income (but not loss) of any
Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid in cash to the referent Person or a Wholly
Owned Restricted Subsidiary thereof, (ii) the Net Income of any Restricted
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental
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<PAGE>
approval (that has not been obtained) or, directly or indirectly, by operation
of the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that Subsidiary or
its stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded, (iv) the cumulative effect of a change in accounting principles
shall be excluded and (v) the Net Income of any Unrestricted Subsidiary shall be
excluded, whether or not distributed to the Company or one of its Restricted
Subsidiaries for purposes of Section 12 hereof.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the Closing Date or (ii) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election.
"Credit Agent" means the Bank of America, in its capacity as
Administrative Agent for the lenders party to the New Credit Facility or any
successor thereto or any person otherwise appointed.
"Depositary" has the meaning set forth in Section 25(a) below.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Preferred Stock mature; provided,
however, that any Capital Stock that would not qualify as Disqualified Stock but
for change of control provisions shall not constitute Disqualified Stock if the
provisions are not more favorable to the holders of such Capital Stock than the
provisions under Section 8 hereof applicable to the Holders of the Preferred
Stock.
"Dividend Payment Date" has the meaning set forth in Section 3 below.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities and Exchange Act of 1934, as amended.
"Exchange Debentures" means the Company's 11 1/4% Subordinated Exchange
Debentures due 2008 issuable in exchange for the Company's Exchangeable
Preferred Stock pursuant to Section 5.
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"Exchange Debenture Indenture" means that certain indentures under which
the Exchange Debentures would be issued and which shall be substantially in the
form approved by the Board of Directors, a form of which is attached hereto as
Exhibit B.
"Exchange Debenture Trustee" means the trustee under the Exchange Debenture
Indenture.
"Exchange Offer" means the exchange offer of the Preferred Stock for the
New Preferred Stock, or, if the Preferred Stock is exchanged for Exchange
Debentures in accordance with the provisions of the Certificate of Designations,
the exchange offer of the Exchange Debentures for the New Exchange Debentures,
as applicable, pursuant to the Registration Rights Agreement.
"Executive Officer" means any officer of the Company that would be deemed
to be an "executive officer" within meaning of the rules and regulations of the
Commission.
"Existing Indebtedness" means the Indebtednesss outstanding in respect of
the Senior Discount Notes and all other Indebtedness of the Company and its
Subsidiaries in existence on the Closing Date.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of (i) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued (including,
without limitation, original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Hedging
Obligations) and (ii) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period, and (iii) any
interest expense on Indebtedness of another Person that is Guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or one of its Restricted Subsidiaries (whether or not such Guarantee
or Lien is called upon) and (iv) the product of (a) all dividend payments,
whether or not in cash, on any series of preferred stock of such Person or any
of its Restricted Subsidiaries, other than dividend payments on Equity Interests
payable solely in Equity Interests of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for
any period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the Company or
any of its Restricted Subsidiaries incurs, assumes, Guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is
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<PAGE>
being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, Guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period. In addition, for
purposes of making the computation referred to above, (i) acquisitions that have
been made by the Company or any of its Restricted Subsidiaries, including
through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be deemed to have
occurred on the first day of the four-quarter reference period and Consolidated
Cash Flow for such reference period shall be calculated without giving effect to
clause (iii) of the proviso set forth in the definition of Consolidated Net
Income, and (ii) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, and (iii) the
Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the referent Person
or any of its Restricted Subsidiaries following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Closing Date.
"Global Certificates" has the meaning set forth in Section 25(a) below.
"Global Certificate Holder" has the meaning set forth in Section 25(a)
below.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency rates.
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"Holder" means the record holder of one or more shares of Exchangeable
Preferred Stock, as shown on the books and records of the Transfer Agent.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, as well as all indebtedness of others
secured by a Lien on any asset of such Person (whether or not such indebtedness
is assumed by such Person) and, to the extent not otherwise included, the
Guarantee by such Person of any indebtedness of any other Person. The amount of
any Indebtedness outstanding as of any date shall be (i) the accreted value
thereof, in the case of any Indebtedness that does not require current payments
of interest, and (ii) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Restricted Subsidiary of the Company, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Equity Interests of such
Restricted Subsidiary not sold or disposed of in an amount determined as
provided in the final paragraph of Section 11 hereof.
"Junior Securities" has the meaning set forth in Section 2 below.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including, without limitation, any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
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financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction).
"Liquidation Preference" means $100 per share of Exchangeable Preferred
Stock.
"Mandatory Redemption Date" has the meaning set forth in Section 5 below.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"New Credit Facility" means that certain Credit Facility, dated as of July
11, 1997, by and among AmeriServe and Bank of America, providing for up to
$150.0 million of revolving credit borrowings, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced or refinanced from time to time.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the Company
nor any of its Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise), or (c) constitutes the lender; (ii) no default with respect to which
(including any rights that the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to its stated maturity;
and (iii) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company or any of
its Restricted Subsidiaries.
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"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary, any Assistant Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company, that meets the requirements of Section 20
hereof.
"Parity Securities" has the meaning set forth in Section 2 below.
"Paying Agent" has the meaning set forth in Section 2(c)
below.
"Preferred Stock" for any Person means Capital Stock of such Person of any
class or classes (however designated) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of Capital
Stock of any other class of such Person.
"Permitted Investments" means (a) any Investment in the Company or in a
Wholly Owned Restricted Subsidiary of the Company that is engaged in a Permitted
Business; (b) any Investment in Cash Equivalents; (c) any Investment by the
Company or any Restricted Subsidiary of the Company in a Person, if as a result
of such Investment (i) such Person becomes a Wholly Owned Restricted Subsidiary
of the Company that is engaged in a Permitted Business or (ii) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Wholly Owned Restricted Subsidiary of the Company that is engaged in a Permitted
Business; (d) any Restricted Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant to and in
compliance with Section 9 hereof; (e) any acquisition of assets solely in
exchange for the issuance of Equity Interests (other than Disqualified Stock) of
the Company; (f) loans and advances made after the Closing Date to Holberg
Industries, Inc. not to exceed $12.0 million at any time outstanding; and (g)
other Investments made after the Closing Date in any Person having an aggregate
fair market value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken together with
all other Investments made pursuant to this clause (g) that are at the time
outstanding, not to exceed $12.0 million.
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"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that: (i) except for Indebtedness used to extend, refinance, renew,
replace, defease or refund the New Credit Facility, the principal amount (or
accreted value, if applicable) of such Permitted Refinancing Indebtedness does
not exceed the principal amount of (or accreted value, if applicable), plus
accrued interest on, the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses incurred
in connection therewith); (ii) such Permitted Refinancing Indebtedness has a
final maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in right of payment
to, the Notes on terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) such Indebtedness
is incurred either by the Company or by the Restricted Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including, without
limitation, any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"Principals" means Holberg Industries, Inc., John V. Holten, Orkla, Nebco
Evans Distributors, Inc. and DLJ Merchant Banking, L.P.
"Public Equity Offering" means a public offering of Equity Interests (other
than Disqualified Stock) of (i) the Company; or (ii) Holberg.
"Receivables" means, with respect to any Person or entity, all of the
following property and interests in property of such Person or entity, whether
now existing or existing in the future or hereafter acquired or arising: (i)
accounts, (ii) accounts receivable incurred in the ordinary course of business,
including without limitation, all rights to payment created by or arising from
sales of goods, leases of goods or the rendition of services no matter how
evidenced, whether or not earned by performance, (iii) all rights to any goods
or merchandise represented by any of the foregoing after creation of the
foregoing, including, without limitation, returned or repossessed goods, (iv)
all reserves and credit balances with respect to any such accounts receivable or
account debtors, (v) all letters of credit, security, or guarantees for any of
the foregoing, (vi) all insurance policies or reports relating to any of the
foregoing, (vii) all
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collection or deposit accounts relating to any of the foregoing, (viii) all
proceeds of the foregoing and (ix) all books and records relating to any of the
foregoing.
"Receivables Subsidiary" means an Unrestricted Subsidiary exclusively
engaged in Receivables Transactions and activities related thereto; provided,
however, that (i) at no time shall the Company and its Subsidiaries have more
than one Receivables Subsidiary and (ii) all Indebtedness or other borrowings of
such Unrestricted Subsidiary shall be Non-Recourse Debt.
"Receivables Transaction" means (i) the sale or other disposition to a
third party of Receivables or an interest therein, or (ii) the sale or other
disposition of Receivables or an interest therein to a Receivables Subsidiary
followed by a financing transaction in connection with such sale or disposition
of such Receivables (whether such financing transaction is effected by such
Receivables Subsidiary or by a third party to whom such Receivables Subsidiary
sells such Receivables or interests therein); provided that in each of the
foregoing, the Company or its Subsidiaries receive at least 80% of the aggregate
principal amount of any Receivables financed in such transaction.
"Related Party" with respect to any Principal means (A) any controlling
stockholder, 80% (or more) owned Subsidiary, or spouse or immediate family
member (in the case of an individual) of such Principal or (B) or trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more controlling
interest of which consist of such Principal and/or such other Persons referred
to in the immediately preceding clause (A).
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Discount Note Indenture" means the indenture relating to the Senior
Discount Notes.
"Senior Discount Notes" means the Company's 12 3/8% Senior Discount Notes
due 2007.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the Closing
Date.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not
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include any contingent obligations to repay, redeem or repurchase any such
interest or principal prior to the date originally scheduled for the payment
thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Transfer Agent" means the entity designated from time to time by the
Company to act as the registrar and transfer agent for the Exchangeable
Preferred Stock.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Unrestricted Subsidiary" means (i) any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution; but only to the extent that such Subsidiary: (a) has no Indebtedness
other than Non-Recourse Debt; (b) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of the Company; (c) is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (x) to subscribe for additional Equity Interests or (y) to maintain
or preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; (d) has not guaranteed or otherwise
directly or indirectly provided credit support for any Indebtedness of the
Company or any of its Restricted Subsidiaries; and (e) has at least one director
on its board of directors that is not a director or executive officer of the
Company or any of its Restricted Subsidiaries and has at least one executive
officer that is not a director or executive officer of the Company or any of its
Restricted Subsidiaries. Any such designation by the Board of Directors shall be
evidenced to the Transfer Agent by filing with the Transfer Agent a certified
copy of the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions and was permitted by Section 11 hereof. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of the Certificate of Designations and any Indebtedness
of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of
the Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 12 hereof, the Company shall be in
default of such covenant). The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any
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outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if (i) such Indebtedness is permitted under Section 12
hereof, and (ii) no Voting Rights Triggering Event would be in existence
following such designation.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person and one or
more Wholly Owned Subsidiaries of such Person.
2. RANKING
The Preferred Stock will, with respect to dividends and rights on the
liquidation, winding-up and dissolution of the Company, rank (i) senior to each
class of capital stock of the Company outstanding or established after the Issue
Date by the Board of Directors of the Company the terms of which do not
expressly provide that it ranks senior to, or on a parity with, the Preferred
Stock as to dividends and rights on the liquidation, winding-up and dissolution
of the Company (collectively referred to, together with the common stock of the
Company, as "Junior Securities") and (ii) subject to certain conditions, on a
parity with each other class of preferred stock established after the Issue Date
by the Board of Directors of the Company the terms of which expressly provide
that such class or series will rank on a parity with the Preferred Stock as to
dividends and rights on the liquidation, winding-up and dissolution of the
Company (collectively referred to as the "Parity Securities"). The Company may
not authorize or issue any Parity Securities (other than additional Preferred
Stock issued as dividends on the Preferred Stock and the New Preferred Stock)
without the approval of the holders of at least a majority of the Preferred
Stock then outstanding, voting or consenting as a separate class.
3. DIVIDENDS
The holders of shares of the Preferred Stock are entitled to receive,
whether or not dividends are declared by the Board of Directors out of funds of
the Company, cumulative preferential dividends from the Issue Date of the
Preferred Stock accruing at a rate of 11 1/4% per annum quarterly from the date
of issuance, payable per share on March 1, June 1, September 1,
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and December 1, or, if any such date is not a Business Day, on the next
succeeding Business Day (each, a "Dividend Payment Date"), to the holders of
record as of the next preceding February 15, May 15, August 15 and November 15,
(each, a "Record Date"). Dividends may be paid, at the Company's option, in cash
or by the issuance of additional shares of Preferred Stock (including fractional
shares) having an aggregate Liquidation Preference equal to the amount of such
dividends. The issuance of such additional shares of Preferred Stock will
constitute "payment" of the related dividend for all purposes of the Certificate
of Designations. The first dividend payment of Preferred Stock will be payable
on June 1, 1998. Dividends payable on the Preferred Stock will be computed on
the basis of a 360-day year consisting of twelve 30-day months and will be
deemed to accrue on a daily basis.
Dividends on the Preferred Stock will accrue whether or not the Company has
earnings or profits, whether or not there are funds legally available for the
payment of such dividends and whether or not dividends are declared. Dividends
will accumulate to the extent they are not paid on the Dividend Payment Date for
the period to which they relate. In the event that dividends on the Preferred
Stock are in arrears and unpaid for three or more quarterly dividend periods
(whether or not consecutive), holders of Preferred Stock will be entitled to
certain voting rights pursuant to Section 4 hereof. The Company shall take all
actions required or permitted under the Delaware General Corporation Law (the
"DGCL") to permit the payment of dividends on the Preferred Stock, including,
without limitation, through the revaluation of its assets in accordance with the
DGCL, to make or keep funds legally available for the payment of dividends.
Dividends on account of arrears for any past Dividend Period and dividends
in connection with any optional redemption may be declared and paid at any time,
without reference to any regular Dividend Payment Date, to holders of record of
Preferred Stock on such date, not more than forty-five (45) days prior to the
payment thereof, as may be fixed by the Board of Directors of the Company.
No dividend whatsoever shall be declared or paid upon, or any sum set apart
for the payment of dividends upon, any outstanding share of Preferred Stock with
respect to any dividend period unless all dividends for all preceding dividend
periods have been declared and paid, or declared and a sufficient sum set apart
for the payment of such dividend, upon all outstanding shares of Preferred
Stock. No full dividends may be declared or paid or funds set apart for the
payment of dividends on any Parity Securities for any period unless full
cumulative dividends shall have been or contemporaneously are declared and paid
(or are deemed declared and paid) in full or declared and, if payable in cash, a
sum in cash sufficient for such payment set apart for such payment on the
Preferred Stock. If full dividends are not so paid, the Preferred Stock will
share dividends pro rata with the Parity Securities. So long as any Preferred
Stock is outstanding and unless and until full cumulative dividends have been
paid (or are deemed paid) in full on the Preferred Stock: (i) no dividend (other
than a dividend payable solely in shares of additional Junior Securities) shall
be declared or paid upon, or any sum set apart for the payment of dividends
upon, any shares of Junior Securities; (ii) no other distribution shall be
declared or made upon, or any sum set apart for the payment of any distribution
upon, any shares of Junior Securities, other than a distribution consisting
solely of Junior Securities; (iii) no shares of Parity
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Securities or Junior Securities shall be purchased, redeemed or otherwise
acquired or retired for value (excluding an exchange for shares of other Junior
Securities) by the Company or any of its Subsidiaries; (iv) no warrants, rights,
calls or options to purchase any Parity Securities or Junior Securities shall be
directly or indirectly issued by the Company or any of its Subsidiaries; and (v)
no monies shall be paid into or set apart or made available for a sinking or
other like fund for the purchase, redemption or other acquisition or retirement
for value of any shares of Parity Securities or Junior Securities by the Company
or any of its Subsidiaries. Holders of the Preferred Stock will not be entitled
to any dividends, whether payable in cash, property or stock, in excess of the
full cumulative dividends as herein described.
4. VOTING RIGHTS; AMENDMENT
Holders of record of shares of the Preferred Stock shall have no voting
rights, except as required by law and as provided herein. Upon (a) the
accumulation of accrued and unpaid dividends on the outstanding Preferred Stock
in an amount equal to three or more quarterly dividend periods (whether or not
consecutive) in the aggregate; (b) the failure of the Company to make, pursuant
to any required Change of Control Offer or mandatory redemption obligation with
respect to the Preferred Stock or (c) the failure of the Company to comply with
any of the other covenants or agreements set forth in the Certificate of
Designations and the continuance of such failure for 30 consecutive days or more
after receipt of notice of such failure from the holders of at least 25% of the
Preferred Stock then outstanding, then the holders of a majority of the
outstanding shares of Preferred Stock and New Preferred Stock, with the holders
of shares of any Parity Securities, issued after the Closing Date, upon which
the voting rights have been conferred and are exercisable, voting as a single
class, will be entitled to elect lesser of the two directors or that number of
directors constituting at least 25% of the Company's Board of Directors (each of
the events described in clauses (a), (b) and (c) being referred to herein as a
"Voting Rights Triggering Event"). The voting rights provided for herein shall
be the holder's exclusive remedy at law or in equity.
The Company shall not, without the approval of the holders of at least a
majority of the Preferred Stock then outstanding amend, alter or repeal any of
the provisions of the Company's Certificate of Incorporation (including this
Certificate of Designations) or the bylaws of the Company so as to affect
adversely the powers, preferences or rights of the holders of the Preferred
Stock or reduce the time for any notice to which the holders of the Preferred
Stock may be entitled. Subject to Section 2 hereof, an amendment of the
Company's Certificate of Incorporation to authorize or create, or to increase
the amount of Junior Securities or Parity Securities shall not be deemed to
affect adversely the powers, preferences or rights of the holders of the
Preferred Stock.
5. EXCHANGE
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The Company may, at its option, on any Dividend Payment Date, exchange, in
whole, but not in part, the then outstanding shares of Preferred Stock for
Exchange Debentures with a principal amount equal to the liquidation preference
of the Preferred Stock; provided that (i) on the date of such exchange there are
no accumulated and unpaid dividends and Liquidated Damages, if any, on the
Preferred Stock (including the dividend payable on such date) or other
contractual impediments to such exchange; (ii) there shall be legally available
funds sufficient therefor; (iii) immediately after giving effect to such
exchange, no Default or Event of Default (each as defined in the Senior Discount
Note Indenture) would exist under the Senior Discount Note Indenture with
respect to the Senior Discount Notes or would be caused thereby; (iv) the
Exchange Indenture (as defined) has been qualified under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), if such qualification is
required at the time of exchange; and (v) the Company shall have delivered a
written opinion to the Trustee (as defined herein) to the effect that all
conditions to be satisfied prior to such exchange have been satisfied.
Upon any exchange pursuant to the preceding paragraph, holders of
outstanding Preferred Stock will be entitled to receive, subject to the second
succeeding sentence of this paragraph, $1.00 principal amount of Exchange
Debentures for each $1.00 of the aggregate Liquidation Preference, plus, without
duplication, accrued and unpaid dividends, plus any additional Exchange
Debentures issued from time to time in lieu of cash interest, of Preferred Stock
held by them. The Exchange Debentures will be issued in registered form, without
coupons and will contain terms substantially similar to the Company's
outstanding Senior Discount Notes. The Exchange Debentures will be issued in
principal amounts of $1,000 and integral multiples thereof to the extent
possible, and will also be issuable in principal amounts less than $1,000 so
that each holder of Preferred Stock will receive certificates representing the
entire amount of Exchange Debentures to which such holder's shares of Preferred
Stock entitle such holder; provided that the Company may pay cash in lieu of
issuing an Exchange Debenture having a principal amount less than $1,000. Notice
of the intention to exchange will be sent by or on behalf of the Company not
more than 60 days nor less than 30 days prior to the Exchange Date, by first
class mail, postage prepaid, to each holder of record of Preferred Stock at its
registered address. In addition to any information required by law or by the
applicable rules of any exchange upon which Preferred Stock may be listed or
admitted to trading, such notice will state: (i) the date of exchange (the
"Exchange Date"); (ii) the place or places where certificates for such shares
are to be surrendered for exchange, including any procedures applicable to
exchanges to be accomplished through book-entry transfers; and (iii) that
dividends on the shares of Preferred Stock to be exchanged will cease to accrue
on the Exchange Date. If notice of any exchange has been properly given, and if
on or before the Exchange Date the Exchange Debentures have been duly executed
and authenticated and deposited with the Transfer Agent, then on and after the
close of business on the Exchange Date, the shares of Preferred Stock to be
exchanged will no longer be deemed to be outstanding and may thereafter be
issued in the same manner as the other authorized but unissued preferred stock,
but not as Preferred Stock, and all rights of the holders thereof as
stockholders of the Company will cease, except the right of the holders to
receive upon surrender of their certificates the Exchange Debentures and all
accrued interest, if any, thereon.
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6. REDEMPTION
Mandatory Redemption
On the Mandatory Redemption Date, the Company will be required to redeem
(subject to the legal availability of funds therefor) all outstanding shares of
Preferred Stock at a price in cash equal to the Liquidation Preference thereof,
plus accrued and unpaid dividends (including an amount in cash equal to a
prorated dividend for any partial Dividend Period) and Liquidated Damages, if
any, to the date of redemption. The Company will not be required to make sinking
fund payments with respect to the Preferred Stock. The Company shall take all
actions required or permitted under Delaware law to permit such redemption.
Optional Redemption
The Preferred Stock may be redeemed, in whole or in part, at the option of
the Company on or after March 1, 2003, at the Applicable Redemption Price at
such time, together with accrued and unpaid dividends (including an amount in
cash equal to a prorated dividend for any partial dividend period) and
Liquidated Damages, if any, to the date of redemption, upon not less than 30 nor
more than 60 days' prior written notice.
Notwithstanding the foregoing, at any time the Company may, at its option,
redeem in whole or in part, outstanding shares of the Preferred Stock at a price
per share of $109.00, plus accrued and unpaid dividends to the redemption date
with the net cash proceeds from one or more Public Equity Offerings; provided
that any such redemption shall occur within 45 days of the date of the closing
of such Public Equity Offerings.
7. LIQUIDATION RIGHTS
Upon any voluntary or involuntary liquidation, dissolution or winding-up of the
Company or reduction or decrease in its capital stock resulting in a
distribution of assets to the holders of any class or series of the Company's
capital stock, each holder of shares of the Preferred Stock will be entitled to
payment out of the assets of the Company available for distribution of an amount
equal to the Liquidation Preference per share of Preferred Stock held by such
holder, plus accrued and unpaid dividends and Liquidated Damages, if any, to the
date fixed for liquidation, dissolution, winding-up or reduction or decrease in
capital stock, before any distribution is made on any Junior Securities,
including, without limitation, common stock of the Company. After payment in
full of the Liquidation Preference and all accrued dividends and
Liquidated Damages, if any, to which holders of Preferred Stock are entitled,
such holders will not be entitled to any further participation in any
distribution of assets of the Company. If, upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Company, the amounts payable with
respect to the Preferred Stock and all other Parity Securities are not paid in
full, the holders of the Preferred Stock and the Parity Securities will share
equally and ratably in any
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distribution of assets of the Company in proportion to the full liquidation
preference and accumulated and unpaid dividends and Liquidated Damages to which
each is entitled. However, neither the voluntary sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other consideration) of all
or substantially all of the property or assets of the Company nor the
consolidation or merger of the Company with or into one or more corporations
will be deemed to be a voluntary or involuntary liquidation, dissolution or
winding-up of the Company or reduction or decrease in capital stock, unless such
sale, conveyance, exchange or transfer shall be in connection with a
liquidation, dissolution or winding-up of the business of the Company or
reduction or decrease in capital stock.
8. CHANGE OF CONTROL
Upon the occurrence of a Change of Control, the Company shall make an offer
(the "Change of Control Offer") to each holder of shares of Preferred Stock to
repurchase all or any part (but not, in the case of any holder requiring the
Company to purchase less than all of the shares of Preferred Stock held by such
holder, any fractional shares) of such holder's Preferred Stock at an offer
price in cash equal to 101% of the aggregate Liquidation Preference thereof
plus, without duplication, all accrued and unpaid dividends per share to the
date of purchase (including an amount in cash equal to a prorated dividend for
the period from the Dividend Payment Date immediately prior to the date of
purchase (as defined below) to the date of purchase) (the "Change of Control
Payment"); provided that the Company shall not be required to repurchase or
redeem any shares of Preferred Stock pursuant to the foregoing provision prior
to the Company's repurchase of any Senior Discount Notes that are required to be
repurchased pursuant to the Change of Control covenant in the Senior Discount
Note Indenture.
Prior to complying with the foregoing paragraph, but in any event within 90
days following a Change of Control, the Company will either repay all
outstanding Senior Debt or obtain the requisite consents, if any, under all
agreements governing outstanding Senior Debt to permit the repurchase of the
Preferred Stock required by this covenant.
Within 30 days following any Change of Control, the Company shall mail a
notice to each holder describing the transaction or transactions that constitute
the Change of Control and offering to repurchase Preferred Stock on the date
specified in such notice, which date shall be no earlier than 30 days and no
later than 60 days from the date such notice is mailed (the "Change of Control
Payment Date"), pursuant to the procedures required by this Certificate of
Designations and described in such notice. The Company shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Preferred Stock as a result
of a Change of Control.
The Change of Control provisions described above shall be applicable
whether or not any other provisions hereof are applicable.
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The Company shall not be required to make a Change of Control Offer to the
holders of Preferred Stock upon a Change of Control if a third party makes the
Change of Control Offer described above in the manner, at the times and
otherwise in compliance with the requirements set forth and purchases all shares
of Preferred Stock validly tendered and not withdrawn under such Change of
Control Offer.
9. ASSET SALES
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale other than transfers of Receivables to
a Receivables Subsidiary in connection with a Receivables Transaction unless (i)
the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value (evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee) of the assets or Equity
Interests issued or sold or otherwise disposed of and (ii) at least 80% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of cash; provided that the amount of (x) any liabilities (as shown
on the Company's or such Restricted Subsidiary's most recent balance sheet) of
the Company or any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Preferred Stock or any
guarantee thereof) that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the Company or such
Restricted Subsidiary from further liability and (y) any securities, notes or
other obligations received by the Company or any such Restricted Subsidiary from
such transferee that are converted by the Company or such Restricted Subsidiary
into cash within 180 days (to the extent of the cash received), shall be deemed
to be cash for purposes of this provision.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds, at its option, to permanently repay
Indebtedness, the acquisition of a controlling interest in another business, the
making of a capital expenditure or the acquisition of other long-term assets, in
each case, in a Permitted Business. Pending the final application of any such
Net Proceeds, the Company may invest such Net Proceeds in any manner that is not
prohibited by the Certificate of Designations. Any Net Proceeds from Asset Sales
that are not applied or invested as provided in the first sentence of this
paragraph will be deemed to constitute "Excess Proceeds." When the aggregate
amount of Excess Proceeds exceeds $20.0 million, the Company will be required to
make an offer to all holders of Preferred Stock (an "Asset Sale Offer") to
purchase the maximum principal amount of Preferred Stock that may be purchased
out of the Excess Proceeds, at an offer price in cash in an amount equal to 100%
of the principal amount thereof plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date of purchase, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate amount
of Preferred Stock tendered pursuant to an Asset Sale Offer is less than the
Excess Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate liquidation preference of Preferred Stock
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select
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the Preferred Stock to be purchased on a pro rata basis. Upon completion of such
offer to purchase, the amount of Excess Proceeds shall be reset at zero.
10. REMEDIES FOR BREACH OF COVENANTS
The sole remedy to holders of Preferred Stock in the event of a breach of
any of the following covenants, including Section 6 hereof, will be the voting
rights arising from Section 4 hereof and such breach by the Company will not
cause any action taken by the Company to be invalid or unauthorized under its
charter documents.
11. RESTRICTED PAYMENTS
From and after the Issue Date, the Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly: (i) declare or
pay any dividend or make any other payment or distribution on account of the
Company's Junior Securities (including, without limitation, any payment in
connection with any merger or consolidation involving the Company) or to the
direct or indirect holders of the Company's Equity Interests in their capacity
as such (other than dividends or distributions payable in Junior Securities of
the Company); (ii) purchase, redeem or otherwise acquire or retire for value
(including without limitation, in connection with any merger or consolidation
involving the Company) any Junior Securities of the Company or any direct or
indirect parent of the Company; or (iii) make any Restricted Investment (all
such payments and other actions set forth in clauses (i) through (iii) above
being collectively referred to as "Restricted Payments"), unless, at the time of
and after giving effect to such Restricted Payment:
(a) no Voting Rights Triggering Event shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period,
have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 12 hereof; and
(c) such Restricted Payment, together with the aggregate amount
of all other Restricted Payments made by the Company and its
Subsidiaries after March 6, 1998 (excluding Restricted Payments
permitted by clause (ii) of the next succeeding paragraph), is less
than the sum of (i) 50% of the Consolidated Net Income of the Company
for the period (taken as one accounting period) from the beginning of
the first fiscal quarter commencing after March 6, 1998 to the end of
the Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is
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a deficit, less 100% of such deficit), plus (ii) 100% of the
aggregate net cash proceeds received by the Company from the issue or
sale since the Issue Date of Junior Securities of the Company, plus
(iii) to the extent that any Restricted Investment that was made after
the Issue Date is sold for cash or otherwise liquidated or repaid for
cash, the lesser of (A) the cash return of capital with respect to
such Restricted Investment (less the cost of disposition, if any) and
(B) the initial amount of such Restricted Investment plus (iv) if any
Unrestricted Subsidiary (A) is redesignated as a Restricted
Subsidiary, the fair market value of such redesignated Subsidiary (as
determined in good faith by the Board of Directors) as of the date of
its redesignation or (B) pays any cash dividends or cash distributions
to the Company or any of its Restricted Subsidiaries, 50% of any such
cash dividends or cash distributions made after the Issue Date.
The foregoing provisions will not prohibit (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at said date of
declaration such payment would have complied with the provisions here; (ii) the
redemption, repurchase, retirement, defeasance or other acquisition of any
Junior Securities of the Company in exchange for, or out of the net cash
proceeds of the substantially concurrent sale or issuance (other than to a
Restricted Subsidiary of the Company) of, other Junior Securities of the
Company; provided that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement, defeasance or other
acquisition shall be excluded from clause (c) (ii) of the preceding paragraph;
(iii) the defeasance, redemption, repurchase or other acquisition of Junior
Securities with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness; (iv) the payment of any dividend by a Restricted
Subsidiary of the Company to the holders of its Equity Interests on a pro rata
basis; (v) the declaration or payment of dividends to Holberg for expenses
incurred by Holberg in its capacity as a holding company that are attributable
to the operations of the Company and its Restricted Subsidiaries, including,
without limitation, (a) customary salary, bonus and other benefits payable to
officers and employees of Holberg, (b) fees and expenses paid to members of the
Board of Directors of Holberg, (c) general corporate overhead expenses of
Holberg, (d) foreign, federal, state or local tax liabilities paid by Holberg,
(e) management, consulting or advisory fees paid to Holberg not to exceed $1.0
million in any fiscal year, and (f) the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the Company or
Holberg held by any member of the Company's (or any of their Restricted
Subsidiaries') management pursuant to any management equity subscription
agreement or stock option agreement in effect as of the Issue Date; provided,
however, the aggregate amount paid pursuant to the foregoing clauses (a) through
(f) does not exceed $10.0 million in any fiscal year; (vii) Investments in any
Person (other than the Company or a Wholly-Owned Restricted Subsidiary) engaged
in a Permitted Business in an amount not to exceed $7.0 million; (viii) other
Investments in Unrestricted Subsidiaries having an aggregate fair market value,
taken together with all other Investments made pursuant to this clause (viii)
that are at that time outstanding, not to exceed $3.0 million; (ix) Permitted
Investments; (x) payments to Holberg pursuant to the tax sharing agreement among
Holberg and other members of the affiliated corporations of which Holberg is the
common parent, and (xi) other Restricted Payments in an aggregate amount not to
exceed $15.0 million.
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The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Voting Rights
Triggering Event; provided that in no event shall the business currently
operated by any Subsidiary Guarantor be transferred to or held by an
Unrestricted Subsidiary. For purposes of making such determination, all
outstanding Investments by the Company and its Restricted Subsidiaries (except
to the extent repaid in cash) in the Subsidiary so designated shall be deemed to
be Restricted Payments at the time of such designation and will reduce the
amount available for Restricted Payments under the first paragraph of this
covenant. All such outstanding Investments shall be deemed to constitute
Investments in an amount equal to the fair market value of such Investments at
the time of such designation (as determined in good faith by the Board of
Directors). Such designation shall only be permitted if such Restricted Payment
would be permitted at such time and if such Restricted Subsidiary otherwise
meets the definition of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Subsidiary, as the
case may be, pursuant to the Restricted Payment. The fair market value of any
non-cash Restricted Payment shall be determined in good faith by the Board of
Directors whose resolution with respect thereto shall be delivered to the
Trustee such determination to be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if such
fair market value exceeds $10.0 million. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by Section 11 hereof were
computed, together with a copy of any fairness opinion or appraisal required by
the Indenture.
12. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt) and that the
Company will not issue any Disqualified Stock and will not permit any of its
Subsidiaries to issue any shares of Preferred Stock; provided, however that the
Company may incur Indebtedness (including Acquired Debt) or issue shares of
Disqualified Stock if the Company's Fixed Charge Coverage Ratio for the most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock is issued would have been at
least 2.0 to 1, determined on a pro forma basis (including pro forma application
of the net proceeds therefrom), as if such Indebtedness had been incurred, or
such Disqualified Stock had been issued, as the case may be, at the beginning of
such four-quarter period.
The provisions of the first paragraph of this covenant will not apply to
the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
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(i) the incurrence by the Restricted Subsidiaries of the Company of term
Indebtedness under the New Credit Facility; provided that the aggregate
principal amount of all term Indebtedness outstanding under the New Credit
Facility after giving effect to such incurrence does not exceed the aggregate
amount of term Indebtedness borrowed under the New Credit Facility on the date
of the Indenture less the aggregate amount of all repayments, optional or
mandatory, of the principal of any Indebtedness under the New Credit Facility
(other than repayments that are immediately reborrowed) that have been made
since the Issue Date; provided, that the foregoing proviso shall not apply to
Permitted Refinancing Indebtedness incurred to refund, refinance or replace any
other Indebtedness incurred pursuant to this clause (i);
(ii) the incurrence by the Restricted Subsidiaries of the Company of
revolving credit Indebtedness and letters of credit pursuant to the New Credit
Facility; provided that the aggregate principal amount of all revolving credit
Indebtedness (with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the Restricted Subsidiaries of the
Company thereunder) outstanding under the New Credit Facility after giving
effect to such incurrence does not exceed the aggregate amount of term
Indebtedness borrowed under the New Credit Facility on the Issue Date; provided,
that the foregoing proviso shall not apply to Permitted Refinancing Indebtedness
incurred to refinance or replace any Indebtedness incurred pursuant to this
clause (ii);
(iii) the incurrence by the Company and its Restricted Subsidiaries of the
Existing Indebtedness;
(iv) the incurrence by the Company of Indebtedness represented by the
Exchange Debentures issuable in accordance with the terms of the Certificate of
Designations;
(v) the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case incurred for the purpose of financing
all or any part of the purchase price or cost of construction or improvement of
property, plant or equipment used in the business of the Company or such
Restricted Subsidiary (whether through the direct purchase of assets or the
Capital Stock of any Person owning such Assets), in an aggregate principal
amount not to exceed $150 million;
(vi) the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness in connection with the acquisition of assets or a new Restricted
Subsidiary; provided that such Indebtedness was incurred by the prior owner of
such assets or such Restricted Subsidiary prior to such acquisition by the
Company or one of its Subsidiaries and was not incurred in connection with, or
in contemplation of, such acquisition by the Company or one of its Subsidiaries;
provided further that the principal amount (or accreted value, as applicable) of
such Indebtedness, together with any other outstanding Indebtedness incurred
pursuant to this clause (vi), does not exceed $7.0 million;
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(vii) the incurrence by the Company or any of its Restricted Subsidiaries
of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to refund, refinance or replace Indebtedness that was permitted
by the Certificate of Designations to be incurred;
(viii) the incurrence by the Company or any of its Restricted Subsidiaries
of intercompany Indebtedness between or among the Company and any of its Wholly
Owned Restricted Subsidiaries; provided, however, that (A) any subsequent
issuance or transfer of Equity Interests that results in any such Indebtedness
being held by a Person other than the Company or a Wholly Owned Restricted
Subsidiary and (B) any sale or other transfer of any such Indebtedness to a
Person that is not either the Company or a Wholly Owned Restricted Subsidiary
shall be deemed, in each case, to constitute an incurrence of such Indebtedness
by the Company or such Restricted Subsidiary, as the case may be;
(ix) the incurrence by the Company or any of its Restricted Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
currency risk or interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of the Certificate of Designations
to be outstanding;
(x) the guarantee by the Company or any of its Restricted Subsidiaries of
Indebtedness of the Company or a Restricted Subsidiary of the Company that was
permitted to be incurred by another provision of this covenant;
(xi) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be
Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to
constitute an incurrence of Indebtedness by a Restricted Subsidiary of the
Company;
(xii) Asset Sales in the form of Receivables Transactions;
(xiii) Indebtedness incurred by the Company any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to letters of
credit issued in the ordinary course of business, including without limitation
to letters of credit in respect to workers' compensation claims or
self-insurance, or other Indebtedness with respect to reimbursement type
obligations regarding workers' compensation claims' provided, however, that upon
the drawing of such letters of credit or the incurrence of such Indebtedness,
such obligations are reimbursed within 30 days following such drawing or
incurrence;
(xiv) Indebtedness arising from agreements of the Company or a Restricted
Subsidiary providing for indemnification, adjustment of purchase price or
similar obligations, in each case, incurred or assumed in connection with the
disposition of any business, asset or a Subsidiary, other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or a Subsidiary for the purpose of financing such acquisition;
provided that the maximum aggregate liability of all such Indebtedness shall at
no time exceed 50% of the gross
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proceeds actually received by the Company and its Restricted Subsidiaries in
connection with such disposition;
(xv) obligations in respect of performance and surety bonds and completion
guarantees provided by the Company or any Restricted Subsidiary in the ordinary
course of business;
(xvi) guarantees incurred in the ordinary course of business in an
aggregate principal amount not to exceed $7.0 million at any time outstanding;
and
(xvii) the incurrence by the Company or any of its Restricted Subsidiaries
of additional Indebtedness, including Attributable Debt incurred after the Issue
Date, in an aggregate principal amount (or accreted value, as applicable) at any
time outstanding, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any other Indebtedness incurred pursuant to this
clause (xvii), not to exceed $30.0 million.
For purposes of determining compliance with this Section 12, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xvii) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this covenant and such item of Indebtedness will be
treated as having been incurred pursuant to only one of such clauses or pursuant
to the first paragraph hereof. Accrual of interest and the accretion of accreted
value will not be deemed to be an incurrence of Indebtedness for purposes of
this covenant.
13. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(a) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or
(2) with respect to any other interest or participation in, or measured by, its
profits, or (b) pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries or (iii) transfer any of its properties or assets to
the Company or any of its Restricted Subsidiaries, except for such encumbrances
or restrictions existing under or by reason of (a) Existing Indebtedness as in
effect on the Issue Date, (b) the New Credit Facility as in effect as of the
Issue Date, and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings thereof,
provided that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings are no more restrictive in
the aggregate (as determined by the Credit Agent in good faith) with respect to
such dividend and other payment restrictions than those contained in the New
Credit Facility as in effect on the Issue Date, (c) this Certificate of
Designations, the Preferred Stock, the New Preferred Stock, the Exchange
Debentures and the New Exchange Debentures (if issued), (d) any applicable law,
rule, regulation or order, (e) any instrument governing Indebtedness or Capital
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Stock of a Person acquired by the Company or any of its Restricted Subsidiaries
as in effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of the Certificate of
Designations to be incurred, (f) by reason of customary non-assignment
provisions in leases entered into in the ordinary course of business and
consistent with past practices, (g) purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in clause (iii) above on the property so acquired, (h)
Permitted Refinancing Indebtedness, provided that the material restrictions
contained in the agreements governing such Permitted Refinancing Indebtedness
are no more restrictive than those contained in the agreements governing the
Indebtedness being refinanced, (i) contracts for the sale of assets, including
without limitation customary restrictions with respect to a Subsidiary pursuant
to an agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Subsidiary, and (j)
restrictions on cash or other deposits or net worth imposed by customers under
contracts entered into in the ordinary course of business.
14. MERGER, CONSOLIDATION OR SALE OF ASSETS
The Company may not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions, to another corporation, Person or entity
unless (i) the Company is the surviving corporation or the entity or the Person
formed by or surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation organized or existing under
the laws of the United States, any state thereof or the District of Columbia;
(ii) the entity or Person formed by or surviving any such consolidation or
merger (if other than the Company) or the entity or Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the obligations of the Company under the Preferred Stock and
the Certificate of Designations; (iii) immediately after such transaction no
Voting Rights Triggering Event exists; and (iv) except in the case of a merger
of the Company with or into a Wholly Owned Restricted Subsidiary of the Company,
the Company or the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made will, at the time of such transaction and after giving pro forma effect
thereto as if such transaction had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 12 hereof.
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15. TRANSACTIONS WITH AFFILIATES
The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction") involving
consideration in excess of $5.0 million unless (i) such Affiliate Transaction is
on terms that are no less favorable to the Company or the relevant Restricted
Subsidiary than those that would have been obtained in a comparable transaction
by the Company or such Restricted Subsidiary with an unrelated Person and (ii)
the Company delivers to the Transfer Agent (a) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $7.5 million, a resolution of the Board of Directors
set forth in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (i) above and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the Board of Directors
and (b) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving either aggregate consideration in excess of $15.0 million
or an aggregate consideration in excess of $10.0 million where there are no
disinterested members of the Board of Directors, an opinion as to the fairness
to the Holders of such Affiliate Transaction from a financial point of view
issued by an accounting, appraisal or investment banking firm of national
standing; provided that the following shall not be deemed Affiliate
Transactions: (q) any employment agreement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business and consistent
with the past practice of the Company or such Restricted Subsidiary, (r)
transactions between or among the Company and/or its Restricted Subsidiaries,
(s) Permitted Investments and Restricted Payments that are permitted by Section
11 hereof, (t) customary loans, advances, fees and compensation paid to, and
indemnity provided on behalf of, officers, directors, employees or consultant of
the Company or any of its Restricted Subsidiaries, (u) annual management fees
paid to Holberg Industries, Inc. not to exceed $10.0 million in any one year,
(v) transactions pursuant to any contract or agreement in effect on the Issue
Date of the Certificate of Designations as the same may be amended, modified or
replaced from time to time so long as any such amendment, modification or
replacement is no less favorable to the Company and its Restricted Subsidiaries
than contract or agreement as in effect on the Issue Date or is approved by a
majority of the disinterested directors of the Company, (w) transactions between
the Company or its Restricted Subsidiaries on the one hand, and Holberg on the
other hand, involving the provision of financial or advisory services by
Holberg; provided that fees payable to Holberg do not exceed the usual and
customary fees for similar services, (x) transactions between the Company or its
Restricted Subsidiaries on the one hand, and Donaldson, Lufkin & Jenrette
Securities Corporation or its Affiliates ("DLJ") on the other hand, involving
the provision of financial, advisory, placement or underwriting services by DLJ;
provided that fees payable to DLJ do not exceed the usual and customary fees of
DLJ for similar services, (y) the insurance arrangements between the Company and
its Subsidiaries and an Affiliate of Holberg that are not less favorable to the
Company or any of its Subsidiaries than those that are in effect on the date
hereof provided such arrangements are conducted in the ordinary course of
business consistent with past practices; and (z) payments under the tax sharing
agreement among Holberg and other members of the affiliated group of
corporations of which it is the common parent.
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16. SALE AND LEASEBACK TRANSACTIONS
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company may enter into a sale and leaseback transaction if (i) the Company
could have incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to Section 12 hereof,
(ii) the gross cash proceeds of such sale and leaseback transaction are at least
equal to the fair market value (as determined in good faith by the Board of
Directors and set forth in an Officers' Certificate delivered to the Trustee) of
the property that is the subject of such sale and leaseback transaction and
(iii) the transfer of assets in such sale and leaseback transaction is permitted
by, and the Company applies the proceeds of such transaction in compliance with,
Section 9 hereof.
17. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED
RESTRICTED SUBSIDIARIES
The Company (i) will not, and will not permit any Wholly Owned Restricted
Subsidiary of the Company to, transfer, convey, sell, lease or otherwise dispose
of any Capital Stock of any Wholly Owned Subsidiary of the Company to any Person
(other than the Company or a Wholly Owned Restricted Subsidiary of the Company),
unless (a) such transfer, conveyance, sale, lease or other disposition is of all
the Capital Stock of such Wholly Owned Restricted Subsidiary and (b) the cash
Net Proceeds from such transfer, conveyance, sale, lease or other disposition
are applied in accordance with Section 9 hereof and (ii) will not permit any
Wholly Owned Restricted Subsidiary of the Company to issue any of its Equity
Interests (other than, if necessary, shares of its Capital Stock constituting
directors' qualifying shares) to any Person other than to the Company or a
Wholly Owned Restricted Subsidiary of the Company.
18. BUSINESS ACTIVITIES
The Company will not, and will not permit any Restricted Subsidiary to,
engage in any business other than a Permitted Business, except to such extent as
would not be material to the Company and its Restricted Subsidiaries taken as a
whole.
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19. REPORTS
Whether or not required by the rules and regulations of the Securities and
Exchange Commission (the "Commission"), so long as any Preferred Stock, New
Preferred Stock, Exchange Debentures or New Exchange Debentures (if issued) are
outstanding, the Company will furnish to the holders of Preferred Stock, New
Preferred Stock, Exchange Debentures or New Exchange Debentures, as applicable,
(i) all quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Company
were required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with respect to
the annual information only, a report thereon by the Company's certified
independent accountants; (ii) all current reports that would be required to be
filed with the Commission on Form 8-K if the Company were required to file such
reports. In addition, whether or not required by the rules and regulations of
the Commission, the Company will file a copy of all such information and reports
with the Commission for public availability (unless the Commission will not
accept such a filing) and make such information available to securities analysts
and prospective investors upon request. In addition, the Company has agreed
that, for so long as any Preferred Stock New Preferred Stock, Exchange
Debentures or New Exchange Debentures, as the case may be, remain outstanding,
it will furnish to the holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
20. OFFICERS' CERTIFICATE
Each Officers' Certificate provided for in this Certificate of Designations
shall include:
a. a statement that the Officers making such certificate or opinion
have read such covenant or condition;
b. a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
c. a statement that, in the opinion of each such Officer, he or she
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
d. a statement as to whether or not, in the opinion of each such
Officer, such condition or covenant has been satisfied.
21. PAYMENT
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a. All amounts payable in cash with respect to the Exchangeable Preferred
Stock shall be payable in United States dollars at the office or agency of the
Company maintained for such purpose within the City and State of New York or, at
the option of the Company, payment of dividends (if any) may be made by check
mailed to the Holders of the Exchangeable Preferred Stock at their respective
addresses set forth in the register of Holders of Exchangeable Preferred Stock
maintained by the Transfer Agent; provided that all cash payments with respect
to the Global Shares (as defined below) and shares of Exchangeable Preferred
Stock the Holders of which have given wire transfer instructions to the Company
shall be required to be made by wire transfer of immediately available funds to
the accounts specified by the Holders thereof.
b. Any payment on the Exchangeable Preferred Stock due on any day that is
not a Business Day need not be made on such day, but may be made on the next
succeeding Business Day with the same force and effect as if made on such due
date.
c. The Company has initially appointed the Transfer Agent to act as the
"Paying Agent." The Company may at any time terminate the appointment of any
Paying Agent and appoint additional or other Paying Agents; provided that until
the Exchangeable Preferred Stock has been delivered to the Company for
cancellation, or moneys sufficient to pay the Liquidation Preference of the
Exchangeable Preferred Stock plus, without duplication, accumulated and unpaid
dividends (including an amount in cash equal to a prorated dividend for any
partial Dividend Period) and Liquidated Damages, if any, on the Exchangeable
Preferred Stock shall have been made available for payment and either paid or
returned to the Company as provided in this Certificate of Designations, the
Company shall maintain an office or agency in the Borough of Manhattan, The City
of New York for surrender of Exchangeable Preferred Stock for payment and
exchange.
d. Dividends payable on the Exchangeable Preferred Stock on any redemption
date or repurchase date that is a Dividend Payment Date shall be paid to the
Holders of record as of the immediately preceding Record Date.
e. All moneys and shares of Exchangeable Preferred Stock deposited with any
Paying Agent or then held by the Company in trust for the payment of the
Liquidation Preference and accumulated and unpaid dividends and Liquidation
Damages, if any, on any shares of Exchangeable Preferred Stock which remain
unclaimed at the end of two years after such payment has become due and payable
shall be repaid to the Company, and the Holder of such shares of Exchangeable
Preferred Stock shall thereafter look only to Company for payment thereof.
22. EXCLUSION OF OTHER RIGHTS
Except as may otherwise be required by law, the shares of Exchangeable
Preferred Stock shall not have any powers, preferences and relative,
participating, optional or other special rights, other than those specifically
set forth in this Certificate of Designations (as
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this Certificate of Designations may be amended from time to time) and in the
Certificate of Incorporation. The shares of Exchangeable Preferred Stock shall
have no preemptive or subscription rights.
23. HEADINGS OF SUBDIVISIONS
The headings of the various subdivisions hereof are for convenience of
reference only and shall not affect the interpretation of any of the provisions
hereof.
24. SEVERABILITY OF PROVISIONS
If any powers, preferences and relative, participating, optional and other
special rights of the Exchangeable Preferred Stock and the qualifications,
limitations and restrictions thereof set forth in this Certificate of
Designations (as it may be amended from time to time) is invalid, unlawful or
incapable of being enforced by reason of any rule of law or public policy, all
other powers, preferences and relative, participating, optional and other
special rights of the Exchangeable Preferred Stock and the qualifications,
limitations and restrictions thereof set forth in this Certificate of
Designations (as so amended) which can be given effect without the invalid,
unlawful or unenforceable powers, preferences and relative, participating,
optional and other special rights of the Exchangeable Preferred Stock and the
qualifications, limitations and restrictions thereof shall, nevertheless, remain
in full force and effect, and no powers, preferences and relative,
participating, optional or other special rights of the Exchangeable Preferred
Stock and the qualifications, limitations and restrictions thereof herein set
forth shall be deemed dependent upon any other such powers, preferences and
relative, participating, optional or other special rights of Exchangeable
Preferred Stock and qualifications, limitations and restrictions thereof unless
so expressed herein.
25. FORM OF EXCHANGEABLE PREFERRED STOCK
(a) The Exchangeable Preferred Stock shall initially be issued in the form
of one or more Global Certificates ("Global Certificates"). The Global
Certificates shall be deposited on the Closing Date with, or on behalf of, The
Depository Trust Company (the "Depositary") and registered in the name of Cede &
Co., as nominee of the Depositary (such nominee being referred to as the "Global
Certificate Holder").
(b) The Exchangeable Preferred Stock offered and sold in reliance on Rule
144A shall be issued initially in the form of a Rule 144A Global Certificate
(the "Rule 144A Global Certificate"). Exchangeable Preferred Stock offered and
sold in reliance on Regulation S shall be issued initially in the form of a
Regulation S Temporary Global Certificate (the "Regulation S Temporary Global
Certificate"), which shall be deposited on behalf of the purchasers with the
Transfer Agent, at its New York office, as custodian for the Depositary, and
registered in the name of the Depositary or the nominee of the Depositary.
Following the termination of the 40-day Restricted Period (as defined in Rule
144A), beneficial interests in the Regulation S Temporary Global Certificate
shall be exchanged for beneficial interests in a Regulation S Permanent Global
Certificate pursuant to the applicable procedures of the Depositary.
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(c) So long as the Global Certificate Holder is the registered owner of any
Exchangeable Preferred Stock, the Global Certificate Holder shall be considered
the sole holder under this Certificate of Designations of the shares of
Exchangeable Preferred Stock evidenced by the Global Certificate. Beneficial
owners of shares of Exchangeable Preferred Stock evidenced by the Global
Certificate shall not be considered the owners or holders thereof under this
Certificate of Designations for any purpose.
(d) Payments in respect of the Liquidation Preference of and accumulated
and unpaid dividends and Liquidated Damages, if any, on any Exchangeable
Preferred Stock registered in the name of the Global Certificate Holder on the
applicable record date shall be payable by the Company to or at the direction of
the Global Certificate Holder in its capacity as the registered holder under
this Certificate of Designations. The Company may treat the persons in whose
names Exchangeable Preferred Stock, including, without limitation, the Global
Certificate, are registered as the owners thereof for the purpose of receiving
such payments.
(e) Any person having a beneficial interest in a Global Certificate may,
upon request to the Company, exchange such beneficial interest for Exchangeable
Preferred Stock in the form of registered definitive certificates (the
"Certificated Securities"). Upon any such issuance, the Company shall register
such Certificated Securities in the name of, and cause the same to be delivered
to, such person or persons (or the nominee of any thereof). If (i) the Company
notifies the holders in writing that the Depositary is no longer willing or able
to act as a depositary and the Company is unable to locate a qualified successor
within 90 days or (ii) the Company, at its option, notifies the holders in
writing that it elects to cause the issuance of Exchangeable Preferred Stock in
the form of Certificated Securities under this Certificate of Designations,
then, upon surrender by the Global Security Holder of its Global Certificate,
Exchangeable Preferred Stock in such form will be issued to each person that the
Global Certificate Holder and the Depositary identify as being the beneficial
owner of the related Exchangeable Preferred Stock.
(f) (i) Each Global Certificate shall bear a legend in substantially the
following form:
"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. THE DEPOSITARY TRUST COMPANY SHALL ACT AS
THE DEPOSITARY UNTIL A SUCCESSOR SHALL BE APPOINTED BY THE
COMPANY AND THE TRANSFER AGENT. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN
AUTHORIZED
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REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
(ii) In addition, the Regulation S Temporary Global Certificate shall bear
a legend in substantially the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL
CERTIFICATE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS
EXCHANGE FOR CERTIFICATED SECURITIES ARE AS SPECIFIED IN THE
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS OF PREFERRED
STOCK AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF OF
SENIOR CUMULATIVE EXCHANGEABLE PREFERRED STOCK OF NEBCO EVANS
HOLDING COMPANY DATED AS OF MARCH 6, 1998. NEITHER THE HOLDER NOR
THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL
CERTIFICATE SHALL BE ENTITLED TO RECEIVE CASH DIVIDEND PAYMENTS
HEREON. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT
DIVIDENDS FROM ACCRUING AND ACCUMULATING ON THIS SECURITY."
(g) All shares of Exchangeable Preferred Stock and the Debentures issuable
upon exchange thereof will bear a legend to the following effect, unless the
Company determines otherwise in compliance with applicable law:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, REGISTRATION."
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
(A) OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY ONLY
(1) TO THE COMPANY, (2) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (3)
TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
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INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A, (4) PURSUANT
TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, (5) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT) (AN "IAI") THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRANSFER AGENT A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRANSFER AGENT) OR
(6) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT (AND BASED ON
AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), SUBJECT IN
EACH OF THE FOREGOING CASES TO APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTIONS
AND (B) THAT IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
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IN WITNESS WHEREOF, the Company has caused this certificate to be duly
executed by A. Petter 0stberg, Vice President of the Company, and attested by
Gunnar E. Klintberg, its Assistant Secretary, this 5th day of March, 1998.
NEBCO EVANS HOLDING COMPANY
By: /s/ A.P. 0stberg
------------------------
Name: A. Petter 0stberg
Title: Vice President
ATTEST:
By: /s/ Gunnar E. Klintberg
- ----------------------------------
Name: Gunnar E. Klintberg
Title: Assistant Secretary
36
Exhibit 4.2
NEBCO EVANS HOLDING COMPANY
MANAGEMENT STOCK OPTION PLAN
1. Purpose of Plan. The purpose of the Plan is to provide the Employers
with a means of attracting and retaining highly qualified key employees and
consultants and of giving key employees and consultants additional incentives to
improve the Employers' performance by increasing such employees' and
consultants' financial interest in the growth in the Company's value and the
overall return to its shareholders.
2. Definitions. The following terms shall have the meanings set forth
below for purposes of the Plan:
Board: The Board of Directors of the Company.
Cause: As defined in the employment or consulting agreement between
a Participant and any Employer, if such an agreement exists and contains a
definition of "Cause;" otherwise, any conduct on the part of a Participant
that the Committee determines, in its sole discretion, has an adverse
effect on the Company or an Employer.
Code: The Internal Revenue Code of 1986, as amended, or any
successor thereto.
Company: Nebco Evans Holding Company, a Delaware corporation.
Compensation Committee: A committee of the Board designated by
the Board to administer the Plan.
Employee: Any individual who is employed by an Employer or who
renders services to an Employer as a consultant with the status of an
independent contractor.
<PAGE>
Employers: The Company and such subsidiaries and affiliates of
the Company as the Board may from time to time designate as "Employers."
Fair Market Value: The Fair Market Value of a Share as of a given
date shall be the value of a Share as of the last day of the most recently
ended fiscal year of the Company, as determined by the Independent
Appraisal Firm pursuant to Section 13 of the Plan.
Independent Appraisal Firm: A qualified firm unrelated to the
Company, selected by the Board or the Committee from time to time to
determine the Fair Market Value of a Share pursuant to Section 13 of the
Plan.
Initial Public Offering: The completion of a sale of shares of the
common stock of the Company pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the "Securities
Act") (other than a registration statement relating to shares of common
stock issuable upon exercise of employee stock options or in connection
with an employee benefit plan of the Company or a subsidiary or affiliate)
following which either (x) 25% or more of the issued and outstanding
shares of common stock of the Company is publicly held and freely
transferable or (y) shares of common stock of the Company with a market
value of at least $100,000,000 are publicly held and freely transferable
or (z) the Board shall otherwise have determined in its discretion that
the provisions hereof applicable upon the consummation of an Initial
Public Offering are otherwise desirable of effectuation.
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Option: A right granted pursuant to the Plan to purchase Shares
on terms and conditions provided for in the Plan and the relevant
Option Agreement.
Option Agreement: A written award agreement setting forth the terms
and conditions of an Option, in the form attached hereto as Exhibit A or
such other form as the Board may from time to time prescribe.
Option Term: The period beginning on the date of grant of an
Option and ending on the date the Option expires pursuant to the Plan
and the relevant Option Agreement.
Grant Price: The purchase price for each Share covered by an
Option.
Participant: Any Employee who receives a grant of an Option.
Plan: The Nebco Evans Holding Company Management Stock Option
Plan.
Shares: The shares of the Company's Class A common stock, par
value $0.01 per share.
Termination of Employment: A Participant shall be considered to have
experienced a Termination of Employment if he or she ceases, for any
reason, to be an Employee, including without limitation as a result of the
fact that the entity by which he or she is employed or for which he or she
renders services as a consultant, as applicable, has ceased to be
affiliated with the Company.
3. Tax Status of Options. No Options will be "incentive stock options"
within the meaning of Section 422 of the Code.
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4. Shares Available for Options. Subject to the provisions of Section 17
of this Plan, the maximum number of Shares that may be made subject to Options
shall be 1,000,000. Such Shares shall be conditionally reserved for issuance
upon the exercise of the Options described herein. Any Shares underlying Options
that expire without such Shares being purchased, and any Shares underlying
Options that are repurchased by the Company pursuant to the Call Right contained
in Section 15 hereof, shall again be available for grants of Options.
5. Effectiveness of Plan. This Plan shall be effective upon its adoption
by the Board. No Options may be granted under the Plan after the tenth
anniversary of such adoption.
6. Administration of Plan. The Plan shall be administered by the Board;
provided, that the Board may authorize the Compensation Committee to exercise
any and all of the powers and functions of the Board pursuant to the Plan. The
interpretation and construction by the Board or the Compensation Committee of
any provisions of the Plan or of any Options granted under it shall be final and
conclusive. No member of the Board or the Compensation Committee shall be liable
for any action taken or determination made with respect to the Plan or any
Options granted under it. No shareholder of the Company nor any employee or
former employee of the Company, or any beneficiary, shall have any claim or
cause of action against the Company, any Employer, an officer of the Company or
any member of the Board or the Compensation Committee on account of, by reason
of, or arising out of the exercise of the discretionary power granted hereunder.
7. Eligibility. All Employees shall be eligible to participate in the
Plan.
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8. Grant of Options. The Board may, from time to time, grant to any
Employee one or more Options for such number of Shares, and upon such terms and
conditions, as it may determine at the time of grant, subject to the provisions
and limitations set forth in this Plan. Each Option shall be evidenced by an
Option Agreement executed on behalf of the Company.
9. Grant Price. The Grant Price shall be the Fair Market Value of a Share
on the date of grant, except to the extent the Board provides otherwise at the
time of grant.
10. Option Term. Unless otherwise provided by the Board at the time of
grant or thereafter, the Option Term of each Option shall end on the earliest of
(i) the date when such Option has been exercised in full, (ii) the date the
Participant experiences a Termination of Employment for Cause, and (iii) ninety
days after the date the Participant experiences a Termination of Employment
other than for Cause; provided, that in no event may the Option Term exceed ten
(10) years from the date of grant of the Option.
11. Vesting. Options shall become vested as and when determined by the
Board at the time of grant; provided, that unless otherwise determined by the
Board at the time of grant, upon an Initial Public Offering, each
then-outstanding Option shall become vested as to one-half of the Shares as to
which it has not yet become vested. In addition, the Board shall have the power,
in its discretion, to accelerate the vesting of any Option at any time, in whole
or in part.
12. Non-Transferability. No Option and, before an Initial Public
Offering, no Shares purchased by exercise of an Option, may be transferred or
disposed of in any way by the Participant, except by will or by the laws of
descent and distribution. During the lifetime of a Participant, his or her
Options may be exercised only by him or her. If a Participant dies, his or
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<PAGE>
her Options shall be exercisable by the Participant's executor or administrator.
References in the Plan to "Participants" shall include persons who acquire any
interest in Options under this Section 12.
13. Appraisal. The Board shall engage an Independent Appraisal Firm to
determine the Fair Market Value of a Share for purposes of the Plan as of the
last day of each fiscal year of the Company that ends during the term of the
Plan, beginning with the fiscal year ended December 31, 1997. Such determination
shall be made within 90 days after the end of each such fiscal year.
14. Exercise of Options. An Option may be exercised and the underlying
Shares purchased in accordance with this Section 14 at any time after the Option
with respect to those Shares vests and before the expiration of the Option Term.
To exercise an Option, the Participant shall give written notice to the Company
at its principal office, in the form attached hereto as Exhibit B, stating the
number of Shares with respect to which the Option is being exercised and
accompanied by the Grant Price for such Shares, in cash, by cashiers' check or
certified check or such other means as the Board shall in its discretion accept.
If the Company may not then issue Shares, the effectiveness of such exercise
shall be delayed until such time as the Company may issue Shares. Upon the
exercise of any Option in compliance with the provisions of this Section 14, the
Company shall deliver or cause to be delivered to the Participant a certificate
or certificates (or other evidence of ownership), registered in the name of the
exercising Participant, for the number of Shares with respect to which the
Option is so exercised.
15. Call Rights. Unless otherwise provided in the Option Agreement at the
time of grant or thereafter, the Company shall have the right (the "Call
Right"), upon the occurrence of a
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<PAGE>
Call Event (as defined below) with respect to any Participant, to require such
Participant (or such Participant's legal guardian or the executor or
administrator of such Participant's estate, or any other person, entity,
authority, or agency which shall have control over or ownership of any Shares
owned by such Participant or any Options held by such Participant), as the case
may be, to sell all of the Shares owned by such Participant and any Options held
by such Participant that had vested on or before the date of the Call Event, at
the relevant Call Price (as defined below) less, in the case of an Option, the
Grant Price. Except as otherwise determined by the Board at the time of grant
and set forth in an Option Agreement, upon the occurrence of a Call Event, all
outstanding Options that are unvested as of the date of such Call Event shall
thereupon terminate and be forfeited immediately.
For the purposes of the Plan, a "Call Event" shall mean:
(a) with respect to any Participant, the Termination of
Employment of such Participant, and the Call Right triggered
thereby shall be exercisable by giving notice to such Participant
(or such Participant's legal guardian or the executor or
administrator of such Participant's estate, or any other person,
entity, authority, or agency which shall have control over or
ownership of any Shares owned by such Participant or any Options
held by such Participant), at any time before the earlier of (i)
the first anniversary of the Termination of Employment or (ii)
the date of an Initial Public Offering, and the Call Price shall
mean the Fair Market Value of a Share as of the date the Call
Right is exercised; or
(b) with respect to all Participants, the execution by the
Company and/or its controlling shareholders of an agreement
pursuant to which, or the consummation of any transaction in
which, a controlling interest in the Company will be or is sold,
transferred or conveyed, in one or a number of related
transaction, directly or indirectly, to one or more persons or
entities (whether by merger, stock purchase, or pursuant to any
reorganization or extraordinary transaction, and including any
sale of all or substantially all of the assets of the Company, or
otherwise, or any other change of control of the Company;
collectively, a "Sale"), and the Call Rights triggered thereby
shall be exercisable by giving notice to all Participants (or
such Participant's legal guardian or the executor or
administrator of such Participant's estate, or any other person,
en-
-7-
<PAGE>
tity, authority, or agency which shall have control over or
ownership of any Shares owned by such Participant or any Options
held by such Participant) no later than thirty business days
following the consummation of the Sale, and the Call Price shall
mean the average price per Share being paid pursuant to the Sale
(or such other amount as shall, in the judgment of the Board, be
equivalent to the value per Share reflected by the Sale in the
event the Sale shall not take the form of a sale of Shares).
The Company shall be entitled to assign any Call Right to any of its
affiliates.
16. Requirements of Law and of Certain Agreements. If any law or any
regulation of any commission or agency having jurisdiction shall require the
Company or the exercising Participant to take any action with respect to the
Shares acquired by the exercise of an Option, then the date upon which the
Company shall issue or cause to be issued the certificate or certificates (or
other evidence of ownership) for the Shares shall be postponed until full
compliance has been made with all such requirements of law or regulation,
provided that the Company shall use its reasonable efforts to take all necessary
action to comply with such requirements of law or regulation. Further, if
requested by the Company, at or before the time of the issuance of the Shares
with respect to which a notice of exercise of an Option has been made, the
exercising Participant shall deliver to the Company a written statement
satisfactory in form and content to the Company, that he or she intends to hold
the Shares so acquired on exercise of his or her Option for investment and not
with a view to resale or other distribution thereof to the public in violation
of the Securities Act, and to such other matters as the Company may request.
Moreover, in the event that the Company shall determine that, in compliance with
the Securities Act or other applicable statutes or regulations, it is necessary
to register any of the Shares with respect to which a notice of exercise of an
Option has been made, or to qualify any such Shares for exemption from any of
the requirements of the Securities Act or any other applicable statute or
-8-
<PAGE>
regulation, no Options may be exercised and no Shares shall be issued to the
exercising Participant until the required action has been completed, provided
that the Company shall use its reasonable efforts to take all necessary action
to comply with such requirements of law or regulation. The Company reserves the
right to legend any certificate for Shares issued upon the exercise of an
Option, conditioning the sale of such Shares upon compliance with applicable
federal and state securities laws and regulations.
17. Adjustments. In the event of the declaration of any stock or other
dividend with respect to the Shares or in the event of any reorganization,
merger, consolidation, acquisition, separation, recapitalization, spinoff,
split-up, combination or exchange of the Shares or other similar transaction,
the Board may, but shall not be required to, adjust the number of Shares
available pursuant to this Plan, the number of Shares subject to Options, and
the Grant Prices of Options, and/or make such other changes in this Plan and in
any Options then outstanding (including without limitation the substitution of
cash, other securities or other property for Shares) as the Board may, in its
discretion, determine to be appropriate.
18. Amendment or Discontinuance of the Plan. The Board may amend or
terminate this Plan and any Option Agreement at any time; provided, however,
that no such amendment or termination shall adversely affect a Participant's
rights to or interest in any Option previously granted, unless such Participant
shall have agreed thereto in writing. Notwithstanding the foregoing or anything
else contained herein or in any Option Agreement to the contrary, if the Company
proposes to effect an Initial Public Offering, and if the appropriate securities
regulatory authority or stock exchange determines that in order for the Initial
Public Offering to proceed, it would be necessary to reduce the number of issued
Options or the term of such issued Options,
-9-
<PAGE>
then this Plan and any then-outstanding Option Agreements may be amended by the
Board to: (i) require the Participants, on a pro rata basis based on the number
of Shares subject to their then-outstanding Options, to either exercise Options
or cancel such Options so that after such exercise or cancellation the number of
issued Options is no more than the maximum number permitted by such appropriate
regulatory authorities; or (ii) shorten the term of any Option to the extent
necessary to comply with applicable law or stock exchange requirements, as the
case may be. To the extent that any such Options shall be required to be
exercised or cancelled, the determination as to whether to exercise or cancel
such Options shall be made by the appropriate Participant in his or her sole
discretion.
19. No Rights as Stockholder or Employee. No Participant shall have any
privileges of a stockholder of the Company with respect to the Shares subject to
an Option, nor shall the Company have any obligation to issue any dividends or
otherwise afford any rights to which Shares are entitled with respect to any
such Option, until the date of the issuance to the Participant of a stock
certificate or certificates (or other evidence of ownership) evidencing such
Shares. The granting of an Option under the Plan shall not confer upon a
Participant any right to continue as an Employee or to interfere in any way with
the Employer's right to terminate such Participant's employment or consulting
services.
20. Withholding. No later than the date as of which an amount first
becomes includible in the gross income of the Participant for Federal income tax
purposes with respect to Shares acquired pursuant to the exercise of any Option
hereunder, such Participant shall pay to the Company, or make arrangements
satisfactory to the Company regarding the payment of, any Federal, state, local
or foreign taxes of any kind required by law to be withheld with respect to
-10-
<PAGE>
such amount. The obligations of the Company hereunder shall be conditional on
such payment or arrangements, and the Company shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment otherwise due to
the Participant (in the form of cash or Shares). With respect to a Participant
who is an independent contractor, he or she shall be solely responsible for the
payment of all Federal, state, local or foreign taxes of any kind required by
applicable law with respect to the exercise of an Option hereunder, except as
otherwise required by law.
21. Governing Law. The Plan shall be governed by the law of Delaware
without regard to the conflicts of law principles thereof.
-11-
<PAGE>
THIS IS A FORM OF THE OPTION AGREEMENT.
INDIVIDUAL GRANTS WILL BE EVIDENCED BY A
PERSONALIZED OPTION AGREEMENT
EXHIBIT A
FORM OF OPTION AGREEMENT
PURSUANT TO
NEBCO EVANS HOLDING COMPANY
MANAGEMENT STOCK OPTION PLAN
1. GENERAL. This Option Agreement evidences the grant to [INSERT NAME]
(the "Participant"), effective as of _____ (the "Grant Date"), of an Option (the
"Option") pursuant to the Nebco Evans Holding Company Management Stock Option
Plan (the "Plan"). Capitalized terms used in this Option Agreement and not
defined herein shall have the meanings ascribed to them in the Plan. This Option
Agreement and the Option to which it relates are subject to the terms and
conditions of the Plan, a copy of which is attached hereto as Exhibit A. The
Option is not an incentive stock option, as defined in Section 422 of the Code.
2. NUMBER OF SHARES; GRANT PRICE[; OPTION TERM]. The Option shall
represent the right to acquire [INSERT NUMBER] of Shares (the "Option Shares")
at a Grant Price of $_____ per Option Share. [IF THE OPTION TERM WILL BE
DIFFERENT FROM THAT SPECIFIED IN SECTION 10 OF THE PLAN, SPECIFY HERE.]
3. VESTING OF OPTION. (a) The Option shall vest and become exercisable in
[TWO, THREE OR FOUR] equal installment upon each of the [FIRST, SECOND, THIRD
AND FOURTH] anniversaries of the Grant Date, provided, that the Participant
remains, as of each anniversary date, an Employee of an Employer. [IF THE OPTION
WILL NOT VEST UPON AN IPO AS SET FORTH IN SECTION 11 OF THE PLAN, SPECIFY HERE.]
<PAGE>
4. STOCKHOLDERS' AGREEMENT. The Participant acknowledges that
concurrently with the entering into of this Option Agreement, he/she is becoming
a party to the Stockholders' Agreement and that as a result, the Options and the
Option Shares are subject to the provisions of the Stockholders' Agreement as
well as the provisions of the Plan.
IN WITNESS WHEREOF, the Participant has hereunto set the Participant's
hand and, pursuant to due authorization in accordance with the Plan, an officer
of the Company has executed this Option Agreement on behalf of the Company, all
as of the day and year first above written.
NEBCO EVANS HOLDING COMPANY
By:
------------------------------------
[INSERT NAME OF DESIGNATED OFFICER OF THE
COMPANY]
------------------------------------
[PARTICIPANT]
-2-
<PAGE>
EXHIBIT B
Date:_____________________
Attention: Secretary
Re: Exercise of Stock Option
Ladies and Gentlemen:
Pursuant to the terms of the Option Agreement between us dated
_______________, in which you have granted to me an Option to purchase a certain
number of the shares of Class A Common Stock, par value $0.01 per share (the
"Shares") of Nebco Evans Holding Company (the "Company"), on certain terms and
conditions, I hereby give notice that I elect to exercise such Options to the
extent of ___ Shares (the "Option Shares") at $[ ] per share. In full payment of
the Grant Price for the Option Shares provided in the Option Agreement, I
herewith deliver a certified or cashier's check to the order of the Company or
cash, in each case, in the amount of $______ for such exercise. I agree to pay
an additional amount equal to any withholding obligation the Company may have as
a result of this exercise or with respect to the Option Shares.
I hereby covenant and agree that I am acquiring the Option Shares for
investment purposes only and not with a view to resale or other distribution
thereof to the public in violation of the Securities Act of 1933, as amended
(the "Securities Act"). I further covenant and agree that I shall not dispose of
any of the Option Shares in any transaction or transactions which, in the
opinion of counsel to the Company, may violate the Securities Act, or the rules
and regulations thereunder or any applicable state securities, or "blue sky,"
laws, or otherwise in contravention of the terms of the Company's Management
Stock Option Plan.
I further covenant and agree that, if any of the Option Shares are
registered under the Securities Act, no public offering (otherwise than on a
national securities exchange, as defined in the Securities Exchange Act of 1934,
as amended) of any of the Option Shares will be made by me or by any successor
under such circumstances that I or such successor may be deemed an underwriter,
as defined in the Securities Act.
<PAGE>
I understand that the Company may endorse upon the certificate or
certificates representing the Option Shares legends referring to the
restrictions on such Option Shares as it may deem appropriate.
Very truly yours,
_________________________________________
(Signature)
_________________________________________
(Print Name)
_________________________________________
(Address)
_________________________________________
_________________________________________
B-2
Exhibit 5.1
NEBCO EVANS HOLDING COMPANY
545 Steamboat Road
Greenwich, Connecticut 06830
203-661-2500
May 14, 1998
Nebco Evans Holding Company
545 Steamboat Road
Greenwich, Connecticut 06830
Gentlemen:
I am Vice President and Secretary of Nebco Evans Holding Company, a
Delaware corporation (the "Company"), and have acted as counsel to the Company
in connection with the Company's Registration Statement on Form S-8 (the
"Registration Statement") filed under the Securities Act of 1933 (the "Act")
relating to the issuance of up to 1,000,000 shares of Class A common stock, par
value $0.01 per share (the "Class A Common Shares"), of the Company pursuant to
the Nebco Evans Holding Company 1998 Management Stock Option Plan (the "Plan").
In connection with the foregoing, I have examined: (a) the Amended
and Restated Certificate of Incorporation, and the Amended and Restated By-Laws,
as amended, of the Company (each of which has been incorporated by reference in
the Registration Statement), (b) the Plan, and (c) and originals or copies
certified or otherwise identified to my satisfaction of such other documents,
corporate records and other instruments as I have deemed necessary or
appropriate for the purposes of the opinion set forth herein.
I have, with your approval, assumed the genuineness of all
signatures, the authenticity of all documents submitted to me as originals, the
conformity to authentic original documents of all documents submitted to me as
certified, facsimile, conformed, electronic, or photostatic copies and the
authenticity of the originals of such copies, and I have assumed the legal
capacity of all individuals executing such documents. In addition, as to all
questions of fact material to this opinion that have not been independently
established, I have relied upon certificates or comparable documents, and oral
and written statements and representations of, officers and representatives of
the Company and its subsidiaries. I have not independently verified such
information and assumptions.
Based on such examination, I am of the opinion that the Class A
Common Shares available for issuance under the Plan, when issued, delivered and
paid for in accordance with the terms and conditions of the Plan, will be
legally issued, fully paid and nonassessable.
<PAGE>
I hereby consent to the filing of this Opinion as Exhibit 5.1 to the
Registration Statement and the reference to me in Item 5 of Part II of the
Registration Statement. In giving such consent, I do not hereby admit that I am
in the category of persons whose consent is required under Section 7 of the
Securities Act.
Very truly yours,
/s/ Kevin J. Rogan
Kevin J. Rogan
-2-
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Management Stock Option Plan of Nebco Evans Holding
Company of our report dated March 24, 1998, with respect to the consolidated
financial statements and schedule of Nebco Evans Holding Company included in
this Annual Report (Form 10-K) for the year ended December 27, 1997, filed with
the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Dallas, Texas
May 14, 1998
