Exhibit 3.14
AMENDED AND RESTATED COMBINED
LIMITED LIABILITY COMPANY AGREEMENT
of
MINERAL RESOURCE TECHNOLOGIES, L.L.C.
and
STOCKHOLDERS AGREEMENT
of
MRT MANAGEMENT CORP.
This Agreement (this "Agreement"), dated as of June 30, 1999, by and
among Philipp Brothers Chemicals, Inc., a New York corporation ("PBC"), MRT
Management Corporation, a Delaware corporation (the "Company"), and the other
parties whose names are set forth on Schedule A attached hereto, and each other
person who shall become party to this Agreement (whether by counterpart,
separate signature page or otherwise) as a "Member" of Mineral Resource
Technologies, L.L.C. or as a "Stockholder" of the Company.
W I T N E S S E T H:
WHEREAS, this Agreement constitutes for all purposes an amendment
and restatement of the Limited Liability Company Agreement, dated as of November
21, 1995, among the original members of Mineral Resource Technologies, L.L.C., a
Delaware limited liability company ("MRT"), as heretofore amended (the "Original
LLC Agreement"), and is being executed and delivered in connection with and as
part of the exchange by the Executive Stockholders (as hereinafter defined) of
their Membership Interests (as hereinafter defined) in MRT for shares of capital
stock of the Company, with MRT, as a result of such exchange, becoming a wholly
owned subsidiary of the Company;
WHEREAS, consistent with the foregoing, the Stockholders (as
hereinafter defined) desire to reflect their amended and restated combined
agreement with respect to the organization of and membership interests in MRT,
and their Shares of and interests in or with respect to the Company, and their
respective rights and obligations with respect thereto;
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NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
GENERAL PROVISIONS
1.1 Certain Basic Definitions. For purposes of this Agreement:
The term "Act" means the Delaware Limited Liability Company Act, as
the same may be amended from time to time.
The term "GCL" means the General Corporation Law of the State of
Delaware, as the same may be amended from time to time.
The term "affiliate" means with reference to any person, any
partner, officer, director, shareholder, trustee, employee or agent of such
person or any person directly or indirectly controlling, controlled by or under
common control with such person, or any person who is a member of the family of
any such partner, officer, director, shareholder, trustee, employee or agent, or
a trustee or beneficiary of any trust for the benefit of any such person or any
such partner, officer, director, shareholder, employee or agent or any such
family member.
The term "Certificate of Formation" means the Certificate of
Formation of MRT filed under the Act, as the same may be amended or restated
from time to time.
The term "Certificate of Incorporation" means the Certificate of
Incorporation of the Company filed under the GCL, as the same may be amended or
restated from time to time.
The term "Executive Stockholder" shall mean each individual who
shall be or become a stockholder of the Company with the designation of, and
become a party hereto as, an "Executive Stockholder", and who in each case
continues to be a Stockholder hereunder.
The term "Employment Agreements" shall mean the respective
Employment Agreements between MRT (or any successor thereto) and each of the
respective Executive Stockholders, as the same may be amended or restated from
time to time.
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The term "Member" means the Company, those other persons, if any,
whose names are set forth on Schedule B hereto, as the same may be amended from
time to time, and each other person, if any, who is admitted as a member of MRT
and a party hereto, and acquires a Membership Interest in MRT, with the rights,
obligations, preferences and limitations specified herein.
The term "Membership Interest" means a Member's aggregate rights in
MRT, including, without limitation, the Member's right to shares of various
categories of Net Income and Net Loss (as such terms are hereinafter defined),
the right to receive distributions from MRT and the right to vote, grant
consents and participate in the management of MRT.
The term "Stockholder" means each of PBC, those persons whose names
are set forth on Schedule A hereto, as the same may be amended from time to
time, and each other person, if any, who becomes a stockholder of the Company
and a party hereto.
The term "PBC" means Philipp Brothers Chemicals, Inc., a New York
corporation.
The term "person" means any association, corporation, estate,
general partnership, limited partnership, limited liability company, joint
venture, natural person, real estate investment trust, business or other trust,
custodian, or nominee, or any individual or other entity in its own or any
representative capacity.
The term "Shannonhouse" means Hugh P. Shannonhouse, an individual.
1.2 Continuation of MRT; Effect.
With respect to MRT:
(a) The Company hereby continues MRT as a limited liability company
under the provisions of the Act.
(b) Except to the extent a provision of this Agreement is expressly
prohibited or ineffective under the Act, this Agreement shall govern, even when
inconsistent with, or different than, the provisions of the Act. To the extent
any provision of this Agreement is prohibited or ineffective under the Act, this
Agreement shall be considered amended to the smallest degree possible in order
to make it effective under the Act. In the event the Act is subsequently amended
or interpreted in such a way to make any provision of this Agreement that was
formerly
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invalid valid, such provision shall be considered to be valid from the effective
date of such interpretation or amendment.
1.3 Name. The name of MRT shall be "Mineral Resource Technologies,
L.L.C.". The business of MRT may be conducted upon compliance with all
applicable laws under any other name designated by the Managing Member(s) (as
hereinafter defined).
1.4 Principal Office; Registered Agent and Office.
(a) The principal office of MRT shall be located in such place as
shall be determined by the Managing Member(s).
(b) The registered agent of MRT for the service of process and the
registered office of MRT shall be that person and location reflected in the
Certificate of Formation. The Managing Member(s), may, from time to time, change
the registered agent or registered office through appropriate filings with the
Secretary of State of Delaware. In the event the registered agent ceases to act
as such for any reason or the registered office shall change, the Managing
Member(s) shall promptly designate a replacement registered agent or file a
notice of change of address as the case may be.
(c) The Managing Member(s) are authorized to cause MRT to be
qualified, formed or registered under assumed or fictitious name statutes or
similar laws in any jurisdiction in which MRT transacts business in which such
qualification, formation or registration is required or desirable. The Managing
Member(s), as authorized persons within the meaning of the Act, are authorized
to execute, deliver and file any certificates (and any amendments and/or
restatements thereof) necessary for MRT to qualify to do business in a
jurisdiction in which MRT may wish to conduct business.
1.5 Purposes. The purposes of MRT are: (a) the providing of management,
removal and recycling services for coal fly ash and municipal solid waste ash
and related by-products and residues for and/or generated by public utilities
and other combustion and mineral by-product producers; (b) to engage in any
other lawful act or activity for which limited liability companies may be formed
under the Act; and (c) to do any and all other acts and things which may be
necessary, appropriate or incidental to the carrying out of such purposes.
1.6 Powers of MRT. MRT shall have the power and authority to take any and
all actions necessary, appropriate, proper, advisable, convenient or incidental
to or for the furtherance of the purposes set forth in Section 1.5 hereof,
including, but not limited to the power:
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(a) to conduct its business, carry on its operations and have and
exercise the powers granted to a limited liability company by the Act in any
jurisdiction that may be necessary, convenient or incidental to the
accomplishment of the purpose of MRT;
(b) to acquire by purchase, lease, contribution of property or
otherwise, own, hold, operate, maintain, finance, improve, lease, sell, convey,
mortgage, transfer, demolish or dispose of any real or personal property that
may be necessary, convenient or incidental to the accomplishment of the purpose
of MRT;
(c) to enter into, perform and carry out contracts of any kind,
including, without limitation, contracts with any Member or any affiliate
thereof, or any agent of MRT necessary to, in connection with, convenient to, or
incidental to the accomplishment of the purpose of MRT;
(d) to purchase, take, receive, subscribe for or otherwise acquire,
own, hold, vote, use, employ, sell, mortgage, lend, pledge, or otherwise dispose
of, and otherwise use and deal in and with, shares or other interests in or
obligations of domestic or foreign corporations, associations, general or
limited partnerships; (including, without limitation, the power to be admitted
as a partner thereof and to exercise the rights and perform the duties created
thereby), trusts, limited liability companies (including, without limitation,
the power to be admitted as a member or appointed as a manager thereof and to
exercise the rights and perform the duties created thereby), or individuals or
direct or indirect obligations of the United States or of any government, state,
territory, governmental district or municipality or of any instrumentality of
any of them;
(e) to lend money for any proper purpose, to invest and reinvest its
funds, and to take and hold real and personal property for the payment of funds
so loaned or invested;
(f) to sue and be sued, complain and defend, and participate in
administrative or other proceedings, in its name;
(g) to appoint employees and agents of MRT, and define their duties
and fix their compensation;
(h) to indemnify any Person in accordance with the Act and to obtain
any and all types of insurance;
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(i) to cease its activities and cancel its Certificate of Formation;
(j) to negotiate, enter into, renegotiate, extend, renew, terminate,
modify, amend, waive, execute, acknowledge or take any other action with respect
to any lease, contract or other agreement in respect of any assets and/or
operations of MRT;
(k) to borrow money and issue evidence of indebtedness, and to
secure the same by one or more mortgages, pledges or other liens on or of the
assets of MRT;
(l) to pay, collect, compromise, litigate, arbitrate or otherwise
adjust or settle any and all other claims or demands of or against MRT or to
hold any proceeds and/or other sums or assets against the payment of contingent
liabilities; and
(m) to make, execute, acknowledge and file any and all documents or
instruments necessary, convenient or incidental to the accomplishment of the
purpose of MRT.
1.7 Consolidations and Mergers. MRT may merge with, or consolidate into,
another Delaware limited liability company or other business entity (as defined
in Section 18-209(a) of the Act) upon the approval of the Managing Member(s).
1.8 Member's Interest. A Member's Membership Interest shall for all
purposes be personal property. A Member has no interest in specific property of
MRT.
ARTICLE II
MANAGEMENT OF MRT
The following provisions of this Article 2 relate solely to MRT:
2.1 Meetings of Members.
(a) There shall be no requirement that MRT hold annual or other
meetings of Members, provided, however, that meetings of Members shall be held
to approve all acts which, pursuant to the Act, expressly require the approval
of the Members (in their capacities as Members, as opposed to their respective
capacities as manager(s) or Managing Member(s)).
(b) Except as expressly required by the Act or by this Agreement, no
vote, consent or authorization of the Members
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(acting in their respective capacities as Members as opposed to acting in their
respective capacities as managers or as Managing Member(s)) shall be required
for the taking of any action on behalf of or with respect to MRT.
(c) Meetings of the Members may be called by the Managing Member(s)
and shall be held at such place as shall be designated from time to time by the
Managing Member(s).
(d) Written notice (which need not state the purpose or purposes for
which the meeting is called) of any meeting of the Members, stating the place,
date and hour of the meeting, shall be mailed or given by or at the direction of
the Managing Member(s) to each Member entitled to vote at the meeting at least
two days prior to the meeting.
(e) At any meeting of the Members, every Member entitled to vote may
vote or attend in person or by proxy.
(f) For each one percentage point (or fraction thereof) of a
Member's MRT Percentage Interest from time to time, such Member shall be
entitled to one vote (or a corresponding fractional vote).
(g) Except as otherwise provided in this Agreement, all limited
liability company action required to be approved by vote of the Members (acting
in their respective capacities as Members as opposed to their respective
capacities as managers or Managing Member(s)) shall be authorized if Members
whose then MRT Percentage Interests constitute, singly or in the aggregate, a
majority of the aggregate MRT Percentage Interests of all the Members at such
time (a "Majority in Interest" of all Members) affirmatively vote in favor of or
consent to said authorization. Except as provided in Section 4.1 hereof, in
every instance where this Agreement requires the consent or authorization of a
Majority in Interest of Members or of any particular group of Members, such
consent or authorization need not be in writing.
2.2 Managing Member(s).
(a) The business and affairs of MRT shall be managed by the Company
so long as the Company's MRT Percentage Interest shall constitute a Majority in
Interest of all Members, or in the absence thereof, by the Member or the Members
acting together whose MRT Percentage Interest(s) constitute a Majority in
Interest of all Members, and such Member(s) when so acting shall be deemed to be
the manager(s) of MRT (individually or collectively a "Manager") and shall be
referred to herein as the "Managing Member" or the "Managing Members", as the
case may be. It is expressly acknowledged that the Company, so long as its MRT
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Percentage Interest constitutes a Majority in Interest of all Members, is the
sole Managing Member. The Managing Member(s) shall, except as expressly provided
in this Agreement, have the exclusive power and authority to authorize and cause
to be taken any action, in the name of and/or by or on behalf of MRT, of any
kind and to authorize and cause to be done anything and everything, in the name
of and/or by or on behalf of MRT, which the Managing Member(s) shall deem
necessary or appropriate to carry on the business and affairs of MRT.
(b) Except as otherwise provided in this Agreement, the Managing
Member(s) shall have all of the rights, powers and obligations of a class of
managers as provided in the Act and as otherwise provided by law.
(c) No Member shall enter into any agreement or transaction or take
any action in the name and/or by or on behalf of MRT or otherwise carry on the
business or affairs of MRT without the consent or authorization of the Managing
Member(s) or unless such Member is itself the Managing Member.
(d) Each Managing Member shall be an authorized agent of MRT for the
purpose of MRT's business, and all authorized actions of the Managing Member(s)
shall bind MRT.
(e) The Managing Member(s) shall be entitled to designate one or
more persons from time to time to act as authorized officers or agents of MRT,
and to execute, deliver and perform agreements, instruments and documents in the
name and on behalf of MRT (each an "Authorized Agent"), consistent with the
powers and authority of the Managing Member(s). In furtherance of the foregoing,
the Managing Member shall be entitled to appoint a Chief Executive Officer, a
President and one or more Vice Presidents (including Executive, Senior and/or
Assistant Vice Presidents), and such other officers and agents as are desired.
The Chief Executive Officer, President and each Vice President shall be an
Authorized Agent of MRT and shall have the following powers and authority:
(i) The Chief Executive Officer shall be the chief executive
officer of MRT.
(ii) The President shall be the chief operating officer of
MRT.
(iii) Each Vice President shall have such powers and perform
such duties as the Managing Member(s) may prescribe. Unless the Managing
Member(s) shall otherwise determine, in the absence or inability of the
President to act, the Vice Presidents (in the order determined by the Managing
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Member(s), or if there be no such determination, in the order of appointment of
Executive Vice Presidents, then of Senior Vice Presidents, then of Vice
Presidents, and finally of Assistant Vice Presidents) may perform all the duties
and may exercise any of the powers of the President.
(f) The Managing Member(s) may remove any Authorized Agent at any
time for cause or without cause.
(g) Persons dealing with MRT are entitled to rely conclusively upon
the power and authority of the Managing Member(s) and/or any Authorized
Agent(s), and upon the certificate of the Managing Member(s) and/or any
Authorized Agent(s), to the effect that such Managing Member(s) is (are) then
acting as manager(s) of MRT or that such Authorized Agent(s) is (are) acting as
Authorized Agent(s), as the case may be, with authority to act by and/or in the
name or on behalf of MRT.
(h) During the continuance of MRT, the Managing Member(s) shall
devote such time and effort to MRT as the Managing Member(s) may determine in
their sole discretion. Nothing contained in this Section 2.2 or elsewhere in
this Agreement shall preclude the Managing Member(s), or any affiliate thereof,
from acting as a director, officer or employee of any corporation, member of any
limited liability company, a trustee of any trust, an executor or administrator
of any estate, a partner of any partnership, or an administrative official of
any other entity, or from receiving any compensation or participating in any
profits in connection with any of the foregoing.
2.3 Limitations on Personal Liability.
(a) The Members shall not have any liability for any obligations or
liabilities of MRT whatsoever except if and then only to the extent expressly
provided in the Act.
(b) No Managing Member, nor any affiliate of any Managing Member,
shall have any personal liability to MRT or any of the Members for damages for
any breach of duty as a manager of MRT or as a Managing Member or as an
Authorized Agent, as the case may be, and/or when acting with the consent of the
Managing Member(s); provided that the foregoing provision shall not eliminate or
limit the liability of any Managing Member if a judgment or other final
adjudication adverse thereto establishes that acts or omissions thereto were in
bad faith or involved intentional misconduct or a knowing violation of law or
that such person personally gained in fact a financial profit or other advantage
to which such person was not legally entitled thereto.
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(c) No Member or Managing Member shall be personally liable for the
return or payment of all or any portion of the capital of or profits allocable
to or loans to MRT by any Member (or any successor, assignee or transferee
thereof), it being expressly agreed that any such return of capital or payment
of profits made pursuant to this Agreement, or any payment or repayment in
respect of any such loan, shall be made solely from the assets of MRT (which
shall not include any right of contribution from any Member or Managing Member).
2.4 Expenses. The Managing Member(s) shall have the right to incur, or
cause MRT to incur, costs, fees and expenses for MRT (including fees and
expenses of attorneys and accountants) in connection with the formation,
organization, management, financing, administration and operation of MRT, and
MRT shall reimburse the Managing Member(s) or the provider of such services
therefor in accordance with the provisions of Section 6.4 hereof.
2.5 Tax Matters Member. The Managing Member(s) shall be, or may designate
from time to time one Member to be, the tax matters partner of MRT for purposes
of Subchapter C of Chapter 63 of Subtitle F of the Code.
2.6 Inclusion. Except as otherwise stated, references in this Agreement to
one or more Members shall be deemed to include Managing Member(s).
ARTICLE III
SHARES
The following provisions of this Article 3 relate solely to the Company:
3.1 Introductory Provisions.
(a) "Basic Shares" shall mean those Shares of capital stock of the
Company designated as "Basic Shares" held by or issued to Stockholders whether
or not vested at the time. Basic Shares shall include, without limitation, any
shares of the Company's voting Class A Common Stock, par value $.001 ("Class A
Common Stock"), and non-voting Class B Common Stock, par value $.001 ("Class B
Common Stock" and together with the Class A Common Stock, "Common Shares" or
"Common Stock"), and any class or series of the Company's Preferred Stock, par
value $.001 ("Preferred Stock"). The rights, preferences and entitlements of the
Basic Shares shall be set forth from time to time in the Certificate of
Incorporation.
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(b) The "Equity Investments" of a Stockholder shall be the sum of
the amounts which such Stockholder invests or is deemed to have invested in the
equity of the Company in respect of Shares as provided in Section 3.3 hereof.
(c) The "Code" shall mean the Internal Revenue Code of 1986, as
amended and as the same may be amended or restated from time to time.
(d) A "Company Year" shall mean the fiscal year of the Company for
federal income tax purposes.
(e) "Phantom Shares" shall mean those "phantom share" units
allocated to Stockholders pursuant to this Agreement and governed by Article 3
and Section 6.1 hereof.
(f) [intentionally omitted]
(g) The term "Initial Public Offering" shall mean the initial
underwritten public offering, pursuant to an effective registration statement
under the Securities Act of 1933, as amended, of equity securities of the
Company or, if PBC then owns at least a majority of the capital stock of the
Company (the "Controlling Stockholder"), PBC or a Parent Entity of PBC, as the
case may be.
(h) "Stockholder Compensation" shall mean the amount paid or accrued
by the Company and/or any of its subsidiaries (including MRT), to or for any of
the Stockholders in connection with their employment with or services to or for
the Company and/or any of its subsidiaries (including MRT), whether pursuant to
any of their respective Employment Agreements, Section 6.4 hereof, or otherwise,
and whether in the nature of severance or termination of employment compensation
or otherwise, which is not treated for income tax purposes as deductible
compensation expense or as guaranteed payments.
(i) [intentionally omitted]
(j) "NIBT" for any fiscal period shall mean the consolidated net
income of the Company and its subsidiaries (including MRT), for such fiscal
period as determined in accordance with generally accepted accounting principles
("GAAP"), less, on a consolidated basis, all Stockholder Compensation paid or
accrued for such fiscal period (to the extent not otherwise deducted in
computing net income under GAAP), plus , to the extent included in the
calculation of such net income for such fiscal period, the sum of the income and
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franchise taxes, if any, of the Company and its subsidiaries for such fiscal
period plus unusual and non-recurring losses (as determined in accordance with
GAAP) of the Company and it subsidiaries for such fiscal period, minus unusual
and non- recurring gains (as determined in accordance with GAAP) of the Company
and its subsidiaries for such fiscal period, in each case under this clause (ii)
net of tax effect, if any.
(k) A "Parent Entity" of PBC shall mean any corporation owning,
directly or through intermediate subsidiaries thereof, at least 50% of the then
issued and outstanding shares of capital stock of PBC.
(l) The "Percentage Interest" of any Stockholder shall mean from
time to time the percentage which the sum of the number of Vested Basic Common
Shares, plus the number of Vested Phantom Shares, plus the number of Unvested
Basic Common Shares, then held by or allocated to such Stockholder represents of
the aggregate number of Vested Basic Common Shares, Vested Phantom Shares and
Unvested Basic Common Shares then held by or allocated to all Stockholders.
(m) "Proportionate Share" of a Stockholder shall mean that
proportion which the number of Common Shares and Phantom Shares then held by or
allocated to such Stockholder, as the case may be, bears to the aggregate number
of Common Shares and Phantom Shares then held by or allocated to all
Stockholders.
(n) [intentionally omitted]
(o) "Shares" shall mean all of the shares of each class of capital
stock of the Company that may be held of record and/or beneficially by any of
the Stockholders from time to time, including any share of capital stock
acquired pursuant to a stock split, stock dividend, combination or shares,
recapitalization, merger, consolidation or sale or exchange of shares or assets
of or by the Company, including any Basic Shares, and in all events excluding
Phantom Shares.
(p) "Unrecovered Equity Investment" shall mean, as to a particular
Stockholder at a particular time, the excess, if any, of the aggregate Equity
Investments of such Stockholder made or deemed made pursuant to this Article 3
(including amounts deemed invested pursuant to Section 3.3(a)) up to such time
over all amounts theretofore distributed or paid by the Company in respect of
such Stockholder's Basic Shares, in all cases other than in respect of accrued
dividends on any shares of Preferred Stock. .
(q) The "Unvested Basic Common Shares" of any Stockholder from time
to time shall mean those Common Shares then
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held by such Stockholder which are not and have not become designated Vested
Basic Shares of such Stockholder pursuant to this Agreement.
(r) The "Unvested Phantom Shares" of any Stockholder from time to
time shall mean those Phantom Shares then allocated to such Stockholder which
are not and have not become designated as Vested Phantom Shares of such
Stockholder pursuant to this Agreement.
(s) The "Vested Basic Common Shares" of any Stockholder from time to
time shall mean Basic Shares, which are not shares of any class or series of
preferred stock issued by the Company, held by such Stockholder which are or
shall become designated as Vested Basic Shares pursuant to this Agreement.
(t) The "Vested Basic Shares" of any Stockholder from time to time
shall mean Basic Shares held by such Stockholder which are or shall become
designated as Vested Basic Shares pursuant to this Agreement.
(u) The "Vested Phantom Shares" of any Stockholder from time to time
shall mean those Phantom Shares allocated to such Stockholder which are or shall
become Vested Phantom Shares of such Stockholder pursuant to this Agreement.
(v) The "Vested Shares" of any Stockholder from time to time shall
mean those Basic Shares then held by such Stockholder which are or have become
designated as Vested Basic Shares pursuant to this Agreement plus those Phantom
Shares allocated to such Stockholder which have become Vested Phantom Shares of
such Stockholder pursuant to this Agreement.
3.2 Issuance, Allocation and Vesting of Shares
(a) Each Stockholder shall be deemed to have issued or to have
allocated to it or him the respective numbers of shares of Preferred Stock,
Vested Basic Common Shares, Unvested Basic Common Shares, Vested Phantom Shares
and Unvested Phantom Shares set forth on Schedule A hereto, as the same may be
amended from time to time; provided that no Shares shall be issued to any of the
Executive Stockholders until such time as each of the Executive Stockholders
commences full-time employment with the Company or MRT pursuant to his
respective Employment Agreement. All shares of Preferred Stock issued by the
Company shall be deemed to be Vested Basic Shares. Unless otherwise determined
by the Company's Board of Directors (the "Board of Directors"), no Executive
Member nor any other person, other than PBC or any transferee of PBC, shall be
issued any shares of Common Stock other than Class B Common Stock.
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(b) All Basic Shares issued to PBC shall be deemed Vested Basic
Shares for all purposes.
(c) A portion of the Basic Common Shares issued to a particular
Executive Stockholder (other than in respect of an Equity Investment by such
Executive Stockholder after November 21, 1995) shall become Vested Basic Common
Shares if and only at such time, and only from and after the time, that the
Executive Stockholder shall have completed the applicable number of full years
of continuous employment service with the Company or MRT as indicated below:
Portion of Basic Common
Shares which shall become
Years of Employment Service Vested Basic Common Shares
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One (1) 33-1/3%
Two (2) 70%
Three (3) 100%
In other words, and by way of example, if an Executive Stockholder completes one
(1) year, two (2) years or three (3) years of continuous employment service with
the Company, then 33-1/3%, 70% or 100%, respectively, of the Basic Common Shares
then issued to him shall be considered Vested Basic Common Shares, and 66-2/3%,
30% and 0%, respectively, of the Basic Common Shares then issued to him shall be
henceforth considered Unvested Basic Common Shares.
(d) If an Executive Stockholder's employment with the Company or MRT
shall terminate, and such termination shall be a termination for "Cause" (as
such term is defined in his Employment Agreement), then all of his Shares and
Phantom Shares other than Vested Shares shall be and be deemed for all purposes
canceled, relinquished and terminated and shall be surrendered to the Company.
(e) If an Executive Stockholder's employment with the Company or MRT
shall terminate and such termination shall be a termination due to the
Executive's Stockholder's death or "Disability" (as such term is defined in his
Employment Agreement), or a termination in the context of "Inadequate Company
Performance" (as such term is then defined in his Employment Agreement), then
all of his Shares and Phantom Shares other than Vested Shares shall be and be
deemed for all purposes canceled, relinquished and terminated and shall be
surrendered to the Company.
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(f) If an Executive Stockholder shall elect to terminate his
employment with the Company or MRT (a "Voluntary Termination") prior to the end
of the then scheduled expiration date of the "Initial Term" (as such term is
then defined under his Employment Agreement), or any then current "Additional
Term" (as such term is then defined in his Employment Agreement), then all of
his Shares and Phantom Shares other than Vested Shares shall be and be deemed
for all purposes canceled, relinquished and terminated and shall be surrendered
to the Company.
(g) If an Executive Stockholder's employment with the Company shall
be terminated by the Company or MRT under any circumstance other than one
referred to in paragraph (d), (e) or (f) above, all of his then Unvested Basic
Shares shall become Vested Basic Shares, and all of his Unvested Phantom Shares
which have not previously become Vested Phantom Shares shall be deemed canceled,
relinquished and terminated.
(h) In the event any of the Unvested Basic Shares or any of the
Unvested Phantom Shares of an Executive Stockholder (other than any of the
Shares or Phantom Shares issued or allocated originally to Shannonhouse) shall
be canceled, relinquished and terminated under any of the circumstances set
forth in clauses (d) through (g) above (the "Terminated Shares" or "Terminated
Phantom Shares", as the case may be), then a number of Unvested Basic Shares
equal to 50% of the number of said Terminated Shares which were Unvested Basic
Shares, and a number of said Unvested Phantom Shares equal to 50% of the number
of Terminated Phantom Shares which were Unvested Phantom Shares, shall be issued
or allocated among the then remaining Executive Stockholders who are then in the
full-time employ of the Company or MRT, in proportion to the respective numbers
of Common Shares held by and the respective numbers of Vested and Unvested
Phantom Shares then allocated to such remaining Executive Stockholders. It is
expressly understood that no such issuance or allocation of Shares or Phantom
Shares corresponding to Terminated Shares or Terminated Phantom Shares shall be
made in the event of the termination of employment of Shannonhouse. Without
limiting any rights which MMC or the Company may have whether under Section 3.4
hereof, or otherwise, the Company may elect to reserve for issuance or grant to
other or future executives of the Company or any of its subsidiaries (including
MRT) a number of Shares and Phantom Shares equal to 50% of the aggregate number
of Terminated Shares and Terminated Phantom Shares (the "Reserved Shares" and
"Reserved Phantom Shares", respectively); it being further understood that, by
virtue of a termination of employment prior to the date hereof of a former
employee of MRT, the number of
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Reserved Shares and Reserved Phantom Shares as of the date hereof are deemed to
be 1.5 shares of Class B Common Stock and 0.9476 Phantom Shares, respectively.
(i) If NIBT for a particular Company Year shall be such that
it meets any of the NIBT Performance Targets set forth below (and as the same
shall be increased as hereinafter provided), the portion of the Unvested Phantom
Shares which are originally allocated to any particular Executive Stockholder
who is then in the full-time employ of the Company or MRT (and which are not
canceled, relinquished or terminated under any of the circumstances set forth
above), corresponding to the applicable NIBT Performance Target achieved, shall
become Vested Phantom Shares of such Executive Stockholder in accordance with
the following cumulative vesting percentages set forth below, so that once a
portion of an Executive Stockholder's Unvested Phantom Shares become Vested
Phantom Shares, no additional portion of his remaining Unvested Phantom Shares
will become Vested Phantom Shares unless and until a higher NIBT Performance
Target is achieved for a subsequent Company Year, and then only to extent of the
additional percentage portion to which such Performance Target shall apply:
Cumulative Portion of Unvested
NIBT Phantom Shares Which Shall
Performance Target Become Vested Phantom Shares
------------------ ----------------------------
At least $3,000,000,but
less than $4,000,000 50%
At least $4,000,000, but
less than $5,000,000 62.5%
At least $5,000,000, but
less than $6,000,000 75%
At least $6,000,000, but
less than $7,000,000 87.5%
At least $7,000,000, or more 100%
For each Company Year ending on or after June 30, 2001, the NIBT
Performance Targets set forth above shall be increased by five percent (5%) of
the corresponding NIBT Performance Targets then in effect. By way of example, if
NIBT for a Company Year (ending before June 30, 2001) shall equal $5,100,000,
then 75% of the Unvested Phantom Shares originally allocated to a particular
Executive Stockholder who is then in
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the full-time employ of the Company or MRT (and which are not canceled,
relinquished or terminated) shall be considered Vested Phantom Shares, and no
additional portion of such Unvested Phantom Shares shall become Vested Phantom
Shares until NIBT for any subsequent Company Year (ending before June 30, 2001)
equals or exceeds $6,000,000 (in which event an additional 12.5% of such
original Unvested Phantom Shares shall become Vested Phantom Shares); and if, in
this example, the subsequent Company Year in question were the Company Year
ending June 30, 2002, then no additional portion of such Unvested Phantom Shares
(in excess of said 75%) shall become Vested Phantom Shares unless for said year
NIBT were to equal or exceed $6,615,000.
(j) If the Company, or, if PBC is then the Controlling Stockholder,
PBC or a Parent Entity of PBC, shall consummate an Initial Public Offering prior
to November 21, 1999 and none of the Unvested Phantom Shares shall then have
become Vested Phantom Shares, then 50% of such Unvested Phantom Shares then
allocated to each of the then Executive Stockholders who shall then be in the
full-time employ of the Company (and which were not theretofore canceled,
relinquished or terminated) shall become Vested Phantom Shares, and the
remaining balance of all Unvested Phantom Shares shall be deemed canceled,
relinquished and terminated. If the Company, or, if PBC is then the Controlling
Stockholder, PBC or a Parent Entity of PBC, shall consummate an Initial Public
Offering at any other time, or after any of the Unvested Phantom Shares shall
have become Vested Shares, then all Unvested Phantom Shares which shall not have
theretofore become Vested Phantom Shares shall be deemed canceled, relinquished
and terminated.
3.3 Equity Investments; Stockholder Loans.
(a) Each of the parties hereto acknowledges that, prior to the date
hereof, PBC and/or its affiliates have loaned to the Company in excess of
$3,000,000, and that all loans by PBC and/or any of its affiliates remain
outstanding, have not been repaid and represent bonafide indebtedness of the
Company senior in all respects to any interest in or rights in respect of shares
of capital stock of the Company.
(b) If, (i) at any time PBC and/or any of its affiliates shall (in
its sole discretion) have previously loaned to the Company or MRT, on an
interest-free basis or made Equity Investments in the Company or MRT of not less
than $3,000,000 in the aggregate (the "Threshold Investment"), and (ii) the
aggregate amount of Unrecovered Equity Investment, plus the remaining balance of
all interest-free loans to the Company or
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MRT by PBC and/or any of its affiliates, shall then equal or exceed $3,000,000,
and PBC shall reasonably determine that funds (in addition to the Threshold
Investment), are required by the Company or MRT after taking into account such
institutional credit facilities as the Company shall be able to obtain without
any requirement of personal guarantees by any of the Stockholders or any of
their affiliates, PBC shall be entitled to give notice from time to time to the
Stockholders setting forth the amount so required (the "Additional Equity
Investments") and each such Stockholder shall have within 60 days after the
giving of such notice to make Additional Equity Investments in the Company of
its or his Percentage Interest of such amount. In consideration for such Equity
Investments, each Stockholder so investing shall be entitled to receive shares
of Preferred Stock having an aggregate liquidation preference equal to the
aggregate amount to be so invested by such Stockholder (and having such other
terms as PBC and the Board of Directors of the Company shall mutually agree
upon), plus a number of Vested Basic Common Shares reasonably established by PBC
and the Company based on the relationship of the aggregate amount to be so
invested in relation to the then fair market value of the Company and the
aggregate number of Common Shares then held by all stockholders of the Company
(any such new Shares to be so issued in respect of such Additional Equity
Investments being referred to herein as "Additional Vested Shares"). For
purposes hereof, it is hereby acknowledged that the conditions specified in
clauses (i) and (ii) have been met as of the date hereof.
(c) If a Stockholder fails to contribute his or its Percentage
Interest of any Additional Equity Investments (the "Uninvested Amount") when
required under clause (b) above, the other Stockholders (the "Investing
Stockholders") may (but shall not be required to) invest such Uninvested Amount
and shall be issued the Additional Vested Shares corresponding to such
Uninvested Amount. The fraction of the Uninvested Amount which may be
contributed by any particular Investing Stockholder shall be determined on the
basis of the then Percentage Interest of each Investing Stockholder in relation
to the aggregate Percentage Interests of all such Investing Stockholders, all as
established by notices of election to make such applicable portions of the
contributions, followed by the making of the applicable portions of the
Additional Equity Investment within sixty (60) days after the expiration of the
original sixty (60) days period.
(d) Anything to the contrary contained herein notwithstanding, in
lieu of making any Equity Investment, PBC shall be entitled to determine, if it
deems appropriate, to
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advance, or to cause one or more of its affiliates to advance, as loan(s) to the
Company such funds, in addition to or in lieu of any Threshold Investment, as it
shall reasonably determine the Company or MRT to require and as it shall be
willing in its discretion to so advance or to have so advanced, each such loan
to be on such terms as to repayment and otherwise, and to bear interest at such
rate, as PBC shall reasonably establish from time to time, each such loan being
herein called a "Stockholder Loan." Notwithstanding the foregoing, the amount of
first Stockholder Loans of PBC or any of its affiliates (whether prior to or
after the date hereof) which in the aggregate, when added to Equity Investments
of PBC or any of its affiliates, do not exceed $1,000,000 shall bear no
interest, and thereafter, the interest rate charged by PBC or any of its
affiliates to the Company or MRT for any Stockholder Loans shall not exceed the
highest rate of interest from time to time charged to PBC or any Parent Entity
of PBC by any of its then institutional lender(s).
(e) Anything to the contrary contained in this Agreement
notwithstanding, any and all Equity Investments which may be made by PBC, Jack
C. Bendheim, or any person, trust or entity affiliated with or related to PBC or
Mr. Bendheim or any member(s) of his family (each a "Bendheim Party"), shall be
governed by this Section 3.3 and not by Section 5.3 of this Agreement.
(f) The Company, shall be entitled, without the consent or approval
of any Stockholder, to amend Schedule A hereto from time to time to reflect any
issuance of Shares and/or other matters contemplated by this Section 3.3.
3.4 New Stockholders. The Company, may, without the consent of any
Stockholder, issue or permit the transfer of Shares of its capital stock to any
other Person(s). The terms and conditions, including the Equity Investment, of
each such issuance shall be fixed by the Board of Directors at the time of such
admission; provided, however, that if any Shares are issued to any Person not
theretofore a Stockholder, the terms and conditions of such issuance shall not
materially reduce the rights and entitlements of any then Stockholder without
such Stockholder's consent thereto, unless such reduction is a reduction
affecting all the Stockholders on a pro rata basis. The Company shall be
entitled, without the consent or approval of any Stockholder, to amend Schedule
A hereto from time to time to reflect the issuance or transfer of Shares and/or
any person becoming a party to this Agreement (if such issuance or transfer is
permitted under the provisions of this Agreement) and to reflect any
corresponding changes to the Shares or Phantom Shares owned by or allocated
among the Stockholders.
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ARTICLE IV
MRT CAPITAL; UNITS; PERCENTAGE INTERESTS;
INCOME AND LOSSES; DISTRIBUTIONS;
DISSOLUTIONS; LIQUIDATIONS; TRANSFERS
4.1 Introductory Provisions.
(a) "Units" shall mean those Units allocated to Members pursuant to
this Article 4.
(b) The "Capital Contributions" of a Member shall be the sum of the
amounts which such Member contributes to the capital of the Company as provided
in Section 4.3 hereof.
(c) The "Code" shall mean the Internal Revenue Code of 1986, as
amended, and as the same may be amended or restated from time to time.
(d) A "MRT Year" shall mean the fiscal year of the Company for
federal income tax purposes.
(e) The term "guaranteed payments" shall mean guaranteed payments
within the meaning of Code Section 707(c).
(f) "Member Compensation" shall mean the amount paid or accrued by
MRT to or for any of the Members in connection with their employment with or
services to or for MRT, and whether in the nature of severance or termination of
employment compensation or otherwise, which is not treated for income tax
purposes as deductible compensation expense or as guaranteed payments.
(g) "Net Income" or "Net Loss" for any MRT Year shall mean the net
income or loss of MRT for such year, determined in accordance with Code Section
703(a), increased by any income exempt from federal income tax and decreased by
any expenditure of MRT described in Code Section 705(a)(2)(B), or treated as
such pursuant to Regulations Section 1.704-1(b)(2)(iv)(i). Without limiting the
generality of the foregoing, Net Income and Net Loss shall reflect any gains or
losses realized by MRT on the sale, exchange or other disposition of MRT assets
and all deductible MRT expenses, including, without limitation, (i) any
deduction or amortization of expenses incurred in connection with the formation
and organization of MRT, (ii) any guaranteed payments, (iii) any taxes imposed
on MRT, (iv) interest payable by MRT, and (v) general operating expenses of MRT.
Net Income and Net Loss
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shall be determined net of items of MRT gross income, gain, loss, or deduction
specially allocated pursuant to Sections 4.6(a) and 4.10.
(h) The "MRT Percentage Interest" of any Member shall mean from time
to time the percentage which the number of Units (other than Unvested Contingent
Units) then allocated to such Member bears to the aggregate number of Units
(other than Unvested Contingent Units) then allocated to all Members.
(i) "MRT Proportionate Share" of a Member shall mean that proportion
which the number of Units then allocated to such Member bears to the aggregate
number of Units then allocated to all Members.
(j) "Regulations" shall mean the income tax regulations promulgated
under the Code, as such regulations may be amended from time to time.
(k) "Unrecovered Capital" shall mean, as to a particular Member at a
particular time, the excess, if any, of the aggregate Capital Contributions of
such Member pursuant to this Article 4 up to such time over all amounts
theretofore distributed in respect of such Member's interest in the Company
pursuant to Section 4.9(b)(iii) hereof.
(l) The "Unvested Contingent Units" of a Member from time to time
shall mean those Units then allocated to such Member which are then, or then
similar in form and substance to, "Unvested Contingent Units" under the terms of
the Original LLC Agreement, or are designated as such by the Managing Member(s)
upon the original issuance or allocation thereof.
4.2 Issuance, Allocation and Vesting of Units
Each Member shall be allocated the respective number of Units set
forth on Schedule B hereto, as the same may be amended from time to time. As of
the date hereof, MMC is the sole Member and accordingly the sole Managing
Member.
4.3 Contributions; Member Loans.
(a) The Company has contributed to the capital of MRT and/or lent to
MRT (on an interest-free basis) a minimum of $1,000,000 (the "Threshold MRT
Investment").
(b) Anything to the contrary contained herein notwithstanding, in
lieu of making any contribution of capital,
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the Company shall be entitled to determine, if it deems appropriate, to advance,
or to cause one or more of its affiliates to advance, as loan(s) to MRT such
funds, in addition to or in lieu of any Threshold MRT Investment, as it shall
reasonably determine MRT to require and as it shall be willing in its discretion
to so advance or to have so advanced, each such loan to be on such terms as to
repayment and otherwise, and to bear interest at such rate, as the Company shall
reasonably establish from time to time, each such loan being herein called a
"Member Loan." Notwithstanding the foregoing, the amount of the Company's first
Member Loans which in the aggregate, when added to the Company's capital
contributions, do not exceed $1,000,000 shall bear no interest, and thereafter,
the interest rate charged by the Company to MRT for any Member Loans shall not
exceed the highest rate of interest from time to time charged to the Company or
PBC or any Parent Entity of PBC by any of its then institutional lender(s).
(c) The Managing Member(s) shall be entitled, without the consent or
approval of any other Member, to amend Schedule B hereto from time to time to
reflect any allocations of Units and/or other matters contemplated by this
Section 4.3.
4.4 New Members. The Managing Member(s), acting on behalf of MRT, may
admit one or more additional Members at any time into MRT. The terms and
conditions, including the capital contribution, of each such admission shall be
fixed by the Managing Member(s) at the time of such admission. The Managing
Member(s) shall be entitled, without the consent or approval of any other
Member, to amend Schedule B hereto from time to time to reflect the admission of
any additional Members and to reflect any corresponding changes to the Units
allocated among the Members.
4.5 Capital Accounts.
The provisions of Sections 4.5 through 4.8 and 4.10 shall apply to
the extent MRT is treated as a separate entity taxable as a partnership for
federal, state or local income tax purposes.
(a) A separate capital account ("Capital Account") shall be
established and maintained for each Member in accordance with the substantial
economic effect and special rule provisions of Regulations Sections
1.704-1(b)(2) and 1.704-2. The Members' respective Capital Accounts shall be
kept separate and apart from the books in which MRT maintains records of MRT's
adjusted tax basis in its assets and the Members' adjusted tax bases in their
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MRT interests. Each Member's Capital Account shall be (i) increased by the
amount of such Member's Capital Contributions and any Net Income and items of
gross MRT income and gain allocated to such Member pursuant to this Article 4
and (ii) reduced by the amount of all distributions made to such Member in
respect of its interest in MRT, whether pursuant to this Article 4 or otherwise,
and any Net Loss and items of gross MRT deduction and loss allocated to such
Member pursuant to this Article 4. In addition, the Members' Capital Accounts
are to be adjusted in accordance with Section 4.5(b) hereof, if applicable.
Allocations under Section 4.5(d) hereof shall affect the Members' Capital
Accounts only to the extent provided in such Section. Distributions and/or
payments to Members constituting guaranteed payments shall not be considered a
distribution in respect of such Member's interest in MRT, and will not affect
such Member's Capital Account other than by reason of the effect of such
guaranteed payments on the Net Income of MRT allocated to such Member.
(b) The assets of MRT shall be revalued on the books of MRT to equal
their fair market values in accordance with Regulations Section
1.704-1(b)(2)(iv)(f) at the following times: (i) the acquisition of an
additional interest in MRT by any new or existing Member in exchange for more
than a de minimis contribution to the capital of MRT; (ii) the distribution by
MRT to a Member of more than a de minimis amount of Company assets (other than
money) as consideration for an interest in MRT; and (iii) the liquidation of MRT
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); provided,
however, that adjustments pursuant to clauses (i) and (ii) above shall be made
only if required by and in the sole discretion of the Managing Member(s). Upon a
revaluation of MRT's assets pursuant to this Section 4.5(b), and before giving
effect to any of the then applicable events discussed in any of clauses (i)
through (iii) above, the fair market values of such assets shall be determined
in accordance with Section 4.14 hereof and each Member's Capital Account shall
be increased or decreased in accordance with Regulations Section
1.704-1(b)(2)(iv)(f).
(c) When property is reflected in the Capital Accounts at a book
basis different from the basis of such property for federal income tax purposes,
all Net Income, Net Loss and items of gross MRT income, gain, deduction and loss
with respect to such property shall be determined for purposes of adjusting
Capital Accounts based on the book basis of such property in accordance with
Regulations Section 1.704-1(b)(2)(iv)(g).
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(d) For federal income tax purposes, all gain, loss, depreciation or
amortization with respect to property which is reflected in the Capital Accounts
at a basis different from the tax basis of such property shall be allocated
among the Members in a manner that takes into account such difference in
accordance with the principles of Code Section 704(c) and Regulations Section
1.704-3. Allocations pursuant to the previous sentence are solely for federal,
state, and local income tax purposes and shall not affect or in any way be taken
into account in computing a Member's Capital Account or share of distributions
pursuant to any provision of this Agreement. Similarly, items of tax credit and
tax credit recapture shall be allocated to the Members in accordance with
Regulations Section 1.704-1(b)(4)(ii), but shall not be credited or charged to
their respective Capital Accounts except to the extent required under
Regulations Section 1.704-1(b)(2)(iv)(j).
4.6 Allocations of Net Income. Items of MRT gross income (but not gain)
and Net Income for each MRT Year shall be allocated as follows:
(a) First, items of MRT gross income (but not gain) shall be
allocated to each Member to the extent that the aggregate amount of Member
Compensation paid or accrued to such Member for such MRT Year and all prior MRT
Years exceeds the items of MRT gross income previously allocated to such Member
pursuant to this Section 4.6(a).
(b) Second, any Net Income (after giving effect to the allocations
under Section 4.6(a) above) shall be allocated to the Members in the ratio of
their respective, MRT Percentage Interests.
4.7 Allocations of Net Loss. Net Loss for each MRT Year shall be allocated
as follows:
(a) First, to the Members in the ratio of their respective MRT
Percentage Interests to the extent of their respective positive Capital Account
balances.
(b) Second, to the Members in the ratio and to the extent of their
respective then outstanding Member Loans (if any).
(c) Thereafter, to the Members in the ratio of their respective MRT
Percentage Interests.
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4.8 Limitation on Net Loss Allocations. Notwithstanding any provisions of
this Article 4 to the contrary, and in accordance with Section
1.704-1(b)(2)(ii)(d) of the Regulations, no Member shall be allocated Net Loss
to the extent such allocation would cause or increase a deficit balance in such
Member's Capital Account in excess of such Member's then Permissible Capital
Account Deficit (as defined in Section 4.10(a)(iii) below). Solely for purposes
of the limitation in the previous sentence, the Members' Capital Accounts shall
be deemed reduced by the reasonably expected adjustments, allocations and
distributions described in paragraphs (4), (5), and (6) of Regulations Section
1.704-1(b)(2)(ii)(d). Allocations of Net Loss that would be made to a Member but
for such limitation shall be made to the other Members to the extent not
inconsistent with such limitation.
4.9 Distributions.
(a) Except as provided in clause (b)(i) and clause (b)(ii) of this
Section 4.9 or in Section 4.17 hereof, no distributions, whether in respect of
the Net Income of MRT or otherwise, shall be made to the Members, except if, as
and then only to the extent, determined from time to time by the Managing
Member(s)in the sole and absolute discretion of the Managing Member(s).
(b) Distributions, other than distributions upon the liquidation of
MRT, and guaranteed payments, if and when made, shall be made as follows and in
the following order of priority:
(i) After the end of each calendar year, to the extent
permissible pursuant to financing agreements to which MRT is now or hereafter
may become a party, MRT shall distribute to each Member the aggregate amount by
which federal income taxes that would be payable by an individual in the highest
tax bracket applicable from time to time to an individual (and taking into
account the character of such income), with respect to the taxable income and
gains of MRT allocated to such Member for the MRT Year ending in such calendar
year and for all prior MRT Years, and after giving effect to all deductions and
losses of MRT allocated to such Member for such MRT Year and prior MRT Years, if
applicable (and in each case applying such highest applicable tax brackets
thereto), exceeds all amounts previously distributed (or deemed distributed) to
such Member pursuant to clause (i) above or this clause (ii). Subject to the
limitations set forth above, the Company will, where reasonably practicable,
make distributions required by this clause (ii) (and not made or deemed made
under clause (i) above), to the extent of the greater
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of (x) 75% thereof, and (y), if for any calendar year Net Income is reasonably
expected to exceed by more than 10% the Net Income for the immediately preceding
calendar year, and if tax rates are not reduced, 110% of the amount distributed
to such Member in respect of such preceding calendar year pursuant to this
clause (ii), on a quarterly basis to facilitate the payment of quarterly
estimated income taxes by the Members, subject to adjustment at or following the
end of such calendar year, as MRT may deem appropriate (including the right of
MRT to require prompt repayment of amounts distributed under this sentence in
excess of that ultimately determined to be required to be distributed for such
calendar year).
(ii) Thereafter, distributions to the Members will be made in
the ratio of their respective amounts of Unrecovered Capital, up to the amount
of each such Member's Unrecovered Capital.
(iii) Thereafter, if all Member Loans are repaid in full,
distributions to the Members will be made in the ratio of their respective
positive Capital Account balances.
(c) Distributions in connection with the liquidation of the Company
shall be made as provided in Section 4.17 hereof.
4.10 Regulatory Allocations and Related Matters.
(a) The following allocations shall be made in accordance with and
to the extent required by Regulations Sections 1.704-2(f), 1.704-2(i), and
1.704-1(b)(2)(ii)(d). References in this Section 4.10 to "partner" and
"partnership" are intended to relate to the characterization of the Members and
MRT, respectively, for income tax purposes.
(i) If there is a net decrease in partnership minimum gain
during a MRT Year (determined in accordance with Regulations Section
1.704-2(d)), items of MRT gross income and gain shall be allocated to the
Members as quickly as possible in the amounts and manner described in Section
1.704-2(f) of the Regulations. This clause (i) is intended to comply with the
minimum gain chargeback requirement relating to any nonrecourse liability of MRT
set forth in Regulation Section 1.704-2(f) and shall be interpreted consistently
therewith.
(ii) If there is a net decrease in partner nonrecourse debt
minimum gain during a MRT Year (determined in accordance with Regulation Section
1.704-2(i)(3)), items of MRT gross income and gain shall be allocated as quickly
as possible
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to those Members who had a share of such partner nonrecourse debt minimum gain
at the end of the preceding MRT Year (determined in accordance with Regulation
Section 1.704-2(i)(5)) in the amounts and manner described in Regulation Section
1.704-2(i)(4). This clause (ii) is intended to comply with the minimum gain
chargeback requirement relating to nonrecourse debt set forth in Regulation
Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(iii) If a Member unexpectedly receives an adjustment,
allocation or distribution described in Section 1.704- 1(b)(2)(ii)(d) of the
Regulations which creates or increases a deficit balance in his or its Capital
Account in excess of the sum (with respect to each Member, such Member's
"Permissible Capital Account Deficit") of such Member's share of the partnership
minimum gain (as determined at the end of such MRT Year in accordance with
Regulation Section 1.704-2(g)), such Member's share of the partner nonrecourse
debt minimum gain (as determined at the end of such MRT Year in accordance with
Regulation Section 1.704-2(i)(3)), and such Member's deficit Capital Account
restoration obligation under this Agreement, if any, then items of MRT gross
income and gain shall be allocated to such Member as quickly as possible to
eliminate such excess, as required by Regulation Section 1.704-1(b)(2)(ii)(d),
provided that an allocation pursuant to this clause (iii) shall be made only if
and to the extent such excess would exist after all other allocations provided
for in this Section 4.10 have been tentatively made for such Company Year as if
this clause (iii) were not in this Section 4.10. This clause (iii) is intended
to comply with the qualified income offset requirement set forth in Regulation
Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
(iv) Notwithstanding anything in this Agreement to the
contrary, all items of MRT gross deduction and loss attributable to a partner
nonrecourse debt (as defined in Regulations Section 1.704-2(b)(4)) shall be
allocated to the Member or Members that bear the economic risk of loss for such
partner nonrecourse debt in accordance with Regulations Section 1.704-2(i)(1).
(b) The allocations required by Section 4.8 hereof and in clause
(a)(iii) of this Section 4.10 (the "QIO Allocations") are intended to comply
with certain requirements of the Regulations. It is the intent of the Members
that, to the extent permissible under the Regulations, all QIO Allocations shall
be offset either with other QIO Allocations or with special allocations of other
items of MRT gross income, gain, loss or
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deduction pursuant to this clause (b). Therefore, notwithstanding any other
provision of this Article 4 (other than clause (a) of this Section 4.10), the
Managing Member(s) shall make such offsetting special allocations of MRT gross
income, gain, loss or deduction in whatever manner the Managing Member(s) shall
reasonably determine appropriate so that, after such offsetting allocations are
made, each Member's Capital Account balance is, to the extent possible, equal to
the Capital Account balance such Member would have had if the QIO Allocations
were not part of the Agreement and all MRT items were allocated pursuant to
Sections 4.6 and 4.7 of this Agreement.
(c) The provisions of this Agreement shall be amended and the manner
in which tax items are allocated shall be modified to the extent necessary to
comply with Regulations Sections 1.704-1(b) and 1.704-2; provided, however, that
any such amendment shall be made only if it is not likely to have a material
effect on the amounts distributable to any Member pursuant to Section 4.17 of
the Agreement upon the liquidation of MRT.
4.11 Determination by Managing Member(s) of Certain Matters.
(a) All matters concerning the determination and allocation among
the Members of the amounts to be determined and allocated pursuant to Article 4
hereof, including the taxes thereon and accounting procedures applicable
thereto, shall be determined by the Managing Member(s) in all cases unless
expressly otherwise provided for by the provisions of this Agreement.
(b) The Managing Member(s) may, without the consent of any other
Member, amend the provisions of this Agreement relating to the manner in which
tax items are allocated to the extent necessary to comply with Regulations
Sections 1.704-1(b) and 1.704-2; provided, however, that any such amendment may
be made only if it is not likely to have a material effect on the amounts
distributable to any Member pursuant to Section 4.17 hereof upon the liquidation
of MRT.
4.12 No Interest on Capital. Except as provided in this Agreement, no
Member shall be entitled to receive any interest on or in respect of any amount
allocated to such Member's Capital Account or on or in respect of any
distribution or withdrawal therefrom or thereof permitted under this Agreement.
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4.13 Withdrawals by Members. Except as provided in this Agreement, no
Member shall have the right to withdraw any funds or other assets from MRT or
such Member's Capital Account without the prior written consent of the Managing
Member(s).
4.14 Fair Market Value Determinations. For purposes of determining the
fair market value of securities and other assets pursuant to this Article 4,
such securities or assets shall be valued as of the then most recent practicable
date prior to the event for which such valuation is made by the Managing
Member(s) or by an appraiser selected by the Managing Member(s).
4.15 Grounds for Dissolution. MRT shall be dissolved and its affairs shall
be wound up upon the earliest to occur of the following: (a) December 31, 2045,
(b) upon the election of the Managing Member(s), (c) except as otherwise
provided in this Agreement, the death, insanity, bankruptcy, dissolution or
withdrawal of a Managing Member or the occurrence of any other event which
terminates the continued membership of a Managing Member in the Company, and (d)
subject to the terms of this Agreement, any other event causing the dissolution
of MRT under the Act, unless in the case of clauses (c) and (d) immediately
above, only, within 90 days after such event, a Majority in Interest of the
remaining Members agree in writing to continue the business of MRT.
4.16 No Right to Cause Dissolution. Notwithstanding the provisions of
Section 4.15 hereof, no Member shall have the right to retire, resign or
withdraw (as such terms are used in the Act) as a Member or otherwise cause,
voluntarily or involuntarily, a dissolution of MRT other than as expressly
permitted pursuant to clause (b) of said Section 4.15, or in connection with a
transfer permitted pursuant to this Article 4, and any such action or any such
dissolution caused by a Member, other than as so permitted, shall constitute a
breach by such Member of its obligations under this Agreement.
4.17 Liquidation. Upon dissolution of MRT, the Managing Member(s) shall
within a reasonable time cause MRT's assets to be liquidated in an orderly and
business-like manner so as not to involve undue sacrifice, and take the
following actions and make the following distributions out of the assets of MRT
in the following manner and order:
(a) first, pay or establish adequate reserves for all debts and
liabilities of MRT to persons other than Members and expenses of liquidation in
the order of priority provided by law;
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(b) then, establish any reserves which the Managing Member(s)
reasonably deems necessary to provide for contingent liabilities or obligations
of MRT; provided, however, that, at the expiration of such period of time as the
Managing Member(s) may reasonably deem advisable, the balance of any reserves
shall be paid or distributed as provided in clauses (c) through (e) of this
Section 4.17 (in the order of priority thereof), it being agreed that such
reserves may, at the election of the Managing Member(s), be paid over to an
independent escrow agent to be held by it as escrowee for the purpose of
disbursing such reserves in payment of any of the aforesaid contingencies;
(c) then, pay out of the balance of such assets, if any, the
outstanding balance of all remaining debts and liabilities of MRT to the Members
to whom the same are owed, pro rata;
(d) then pay the Members who have Unrecovered Capital, pro rata, to
the extent of their respective amounts of Unrecovered Capital, the balance, if
any, of such assets;
(e) then, pay the Members, pro rata, to the extent of their
respective positive Capital Account balances (determined after giving effect to
all allocations called for by this Article 4), the balance, if any, of such
assets; and
(f) then pay the balance, if any, of such assets to the Members in
the ratio of their respective MRT Percentage Interests.
Except as otherwise expressly provided herein, upon such distribution, no Member
shall have any rights or claims against MRT or any other Member with respect to,
and notwithstanding any imbalance in, the respective Capital Accounts of the
Members.
4.18 Deferral of Distribution. Notwithstanding the provisions of Section
4.17(c) immediately above, if, upon dissolution of MRT, the Managing Member(s)
shall reasonably determine that sale of part or all of MRT's assets would cause
undue loss to the Members, the Managing Member(s) may, in order to avoid such
losses, defer the liquidation of, and withhold from distribution for a
reasonable time, any assets of MRT.
4.19 No Restoration Obligations. No Member shall have any obligation to
restore any deficit balance in its capital account following the "liquidation"
(as such term is defined in Regulations Section 1.704-1(b)(2)(ii)(g)) of its
interest in MRT.
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4.20 No Right to Partition. The Members, on behalf of themselves and their
heirs, personal representatives, successors and assigns, hereby specifically
renounce, waive and forfeit all rights, whether arising under contract or
statute or by operation of law, to seek, bring or maintain any action in any
court of law or equity for partition of MRT, or any interest which is considered
to be MRT assets, regardless of the manner in which title to any such assets may
be held.
4.21 Restrictions on Transfer. A Member shall not have the right to sell,
assign, pledge, transfer or otherwise dispose of all or any part of its
Membership Interest (each, a "Transfer"), and no Member shall have any right to
substitute a transferee in its place as a Member, except as expressly consented
to by the Managing Member(s) and then only upon such terms and conditions as the
Managing Member(s) shall specify, subject, however to the provisions of this
Article 4. Any such unpermitted purported Transfer shall be null and void ab
initio and of no force or effect. Notwithstanding the foregoing, the Company and
any transferees or successors in interest thereto designated by it shall be
expressly permitted to Transfer its (their) Membership Interests and to cause
any such transferee or successor to be admitted as a Member and as a party
hereto.
ARTICLE V
RESTRICTIONS ON TRANSFER OF SHARES
5.1 Restrictions on Transfer. A Stockholder shall not have the right to
sell, assign, pledge, transfer or otherwise dispose of all or any part of its
Shares or its Phantom Shares (each, a "Transfer"), and no Stockholder shall have
any right to substitute a transferee in its place as a Stockholder, except as
expressly consented to by the Board of Directors and then only upon such terms
and conditions as the Board of Directors shall specify, subject, however to the
provisions of this Article 5. Any such unpermitted purported Transfer shall be
null and void ab initio and of no force or effect. PBC and any transferees or
successors in interest thereto designated by it shall be expressly permitted to
Transfer its (their) Shares and any such transferee or successor shall be
entitled to become a party to this Agreement and to be a Stockholder so long as
it complies with the provisions of Section 5.2 below.
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5.2 Tag-Along Right and Drag-Along Right in Certain Third Party Sales.
(a) If PBC desires to Transfer, in a transaction which shall be a
bona fide transaction on arm's length terms, any Minimum Portion (as hereinafter
defined) of the Shares held by it, or all of the Shares held by it if such
Shares are a Minimum Interest (as hereinafter defined), to a Person other than
any of its affiliates (a "Third Party") (such a Transfer being referred to as a
"Third Party Sale"), the Executive Stockholders shall have, under the
circumstances described below, the right or obligation to participate in such
Third Party Sale by selling all or a portion (as applicable) of the Shares and
Phantom Shares held by or allocated to such Executive Stockholders, in each case
on the terms and conditions provided herein. A "Minimum Portion" of PBC's
Shares, or a "Minimum Interest," as the case may be, means a portion of, or all
of, such Shares corresponding to a number of Vested Shares equal to at least 35%
of the aggregate number of Vested Basic Common Shares and Unvested Basic Common
Shares then held by or allocated to all Stockholders.
(b) PBC shall notify the Executive Stockholders as soon as
practicable of the intent to engage in a Third Party Sale and shall provide the
Executive Stockholders with written notice (a "Sale Notice") at least 15
business days prior to the proposed closing of any Third Party Sale. Such Sale
Notice shall set forth: (i) the name and address of the Third Party, (ii) the
portion of the Shares of each class proposed (based on the number of Vested
Basic Shares of each class represented by each such portion of PBC's Shares) to
be sold (such portion being referred to herein as a the "Sale Interest") to the
Third Party and the applicable percentage (the applicable "Percentage") that
such Sale Interest represents (based on the number of such Vested Basic Shares
of each class) of each class of Vested Basic Shares held by PBC, (iii) whether
PBC is exercising its right under this Agreement to require the other Executive
Stockholders to sell all or a portion of their Shares in accordance with Section
5.2(d) below, (iv) the proposed amount and form of consideration to be paid for
such Sale Interest by the transferee and the terms and conditions of payment,
and (v) the proposed closing date for the Third Party Sale.
(c) (i) If any Executive Stockholder wishes to sell all or a portion
of such Executive Stockholder's Shares and Vested Phantom Shares (excluding for
this purpose any Unvested Phantom Shares) in the Third Party Sale (a "Tag-Along
Participant"), the Tag-Along Participant shall provide written notice to PBC
within 10 business days of the date the Sale Notice
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is given (the "Tag-Along Acceptance Notice"). The Tag-Along Acceptance Notice
shall indicate that the Tag-Along Participant wishes to participate in the Third
Party Sale and the portion of the Shares and Vested Phantom Shares thereof which
the Tag-Along Participant proposes to sell in the Third Party Sale. If the Sale
Interest represents less than 50% of the aggregate Shares issued to all of the
Stockholders, a Tag-Along Participant shall be entitled to sell in the Third
Party Sale the portion of his Shares and Vested Phantom Shares (excluding for
this purpose any Unvested Phantom Shares) not to exceed (x) the number of each
class of Vested Basic Shares and Vested Phantom Shares then issued or allocated
to the Tag-Along Participant (treating Vested Phantom Shares for this purpose
only as if they were Class B Stock Common Shares), multiplied by (y) the
applicable Percentage. If the Sale Interest represents 50% or more of the
aggregate Shares allocated to all of the Stockholders (a "Change of Control
Transaction"), a Tag-Along Participant shall be entitled to sell in the Third
Party Sale the portion of his Shares and Vested Phantom Shares equal to 100% of
the number of Vested Shares and Unvested Basic Shares and Vested Phantom Shares
(but not the Unvested Phantom Shares) then held by or allocated to the Tag-Along
Participant. Any sale of the Shares and Vested Phantom Shares of a Tag-Along
Participant in a Third Party Sale shall be first out of such Participant's
Vested Basic Shares, and, to the extent that the applicable Percentage reflected
in the Shares of any class sold by such Tag-Along Participant in such Third
Party Sale is of more than the aggregate number of Vested Basic Shares of such
class of such Tag-Along Participant, shall next be out of such Tag-Along
Participant's Unvested Basic Shares, and next out of such Tag-Along
Participant's Vested Phantom Shares. The sale of Shares and Vested Phantom
Shares by any Tag-Along Participant in a Third Party Sale shall be for the same
consideration per Share for the applicable class of Shares to be sold (and
treating Vested Phantom Shares as if they were shares of Class B Common Stock),
as the case may be, and on the same other terms and conditions, as the sale of
the Sale Interest by PBC to such Third Party; provided, however, that, if such
Sale is pursuant to a Change of Control Transaction and the consideration
payable includes an installment note obligation of the purchaser, then, the Tag
Along Participant shall be entitled to elect in the Tag Along Notice to receive,
in lieu thereof, payment in two equal installments, the first at the closing and
the second on the first anniversary thereof, in an amount such that the present
value of such two payments equals the present value of such installment note
obligation, all as reasonably determined by PBC For purposes of computing
present value, the discount factor shall be the then prevailing yield for
corporate bonds with a remaining term to maturity similar to the
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installment note obligation term and a rating similar to that which could
reasonably be expected for such installment note obligation if a rating therefor
were obtained, as published by The Wall Street Journal or, if not available
therein, another recognized source for such information, all as reasonably
determined by PBC
(ii) If no Tag-Along Acceptance Notice is received by PBC
within the 10 business day period specified above, PBC shall have the right,
during the period of 180 days following expiration of such 10 business day
period, to Transfer the Sale Interest without any participation by the Executive
Stockholders, to the Person(s) identified in the Sale Notice for the Specified
Price (as hereafter defined) or any lower price and on the same terms and
conditions as set forth in the Sale Notice or any terms which are not
economically superior thereto. For purposes of this Section 5.2, the term
"Specified Price" shall mean the sum of (i) the amount of cash consideration per
Share for the applicable class or series of Shares to be sold (and treating
Vested Phantom Shares as if they were shares of Class B Common Stock), as the
case may be, included in the price set forth in the Sale Notice and (ii) the
then present market value of any non-cash consideration per Share of such class
or series included in the price set forth in the Sale Notice (as determined by a
nationally recognized accounting or investment banking firm selected by PBC.
(iii) If one or more Tag-Along Acceptance Notices are received
by PBC within the 10 business day period specified above, then the portion of
the Shares which PBC and each Tag-Along Participant shall be entitled to sell at
the closing of the Third Party Sale shall be (A) the aggregate Shares of each
class (and treating Phantom Shares as if they were shares of Class B Common
Stock) the Third Party is willing to purchase, multiplied by (B) a fraction, the
numerator of which is equal to the applicable Percentage reflected in the
portion of the Shares of such class proposed to be sold by PBC or such Tag-Along
Participant, as the case may be, and the denominator of which is equal to the
aggregate Percentages reflected in the portion of the Shares of such class
proposed to be sold by PBC and all Tag-Along Participants, in each case subject
to the fifth sentence of Section 5.2(c)(i) above.
(d) PBC, at its option, may require that the Executive Stockholders
sell the applicable Percentage(s) of their respective Shares and Phantom Shares
to the Third Party as part of the Third Party Sale (including, for purposes of
this paragraph (d), the Executive Stockholders' Unvested Phantom
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Shares). If PBC so requires the Executive Stockholders to sell the applicable
Percentage(s) of their respective Shares and Phantom Shares to the Third Party
as part of the Third Party Sale, then such Executive Stockholders shall sell the
applicable Percentage(s) of their respective Shares and Phantom Shares to the
Third Party on the same terms and conditions as the sale by PBC of the Sale
Interest to such Third Party and as if the fifth sentence of Section 5.2(c)(i)
above applied thereto.
(e) The closing of a Third Party Sale involving Tag-Along
Participants shall take place on such date and at such time as PBC specifies to
the Tag-Along Participants on not less than three (3) business days prior
notice.
(f) At any closing of the Transfer of Shares and/or Phantom Shares
pursuant to this Agreement by an Executive Stockholder to a Third Party in
connection with a Third Party Sale, each party Transferring all or any portion
of such party's Shares and/or Phantom Shares (each, a "Transferor") shall
Transfer, convey and deliver all right, title and interest in and to such Shares
being Transferred by such party, which shall constitute (and, at the closing,
the Transferor shall certify the same in writing) good and unencumbered title to
such Shares and/or Phantom Shares, free and clear of all Liens, subject to the
restrictions of this Agreement. In addition, each Transferor shall deliver to
the party to which such Shares and/or Phantom Shares are being Transferred (the
"Transferee") at such closing any opinions of counsel (relating to
transferability) and certificates that the Transferee may reasonably request.
(g) If any Executive Stockholder Transfers all or any portion of
such Executive Stockholder's Shares and/or Phantom Shares in a Third Party Sale,
such Executive Stockholder shall be responsible for his Proportionate Share of
the liabilities and obligations (including, for example, liabilities and
obligations for indemnification amounts and post-closing purchase price
adjustments) of the Executive Stockholders who participate in the Third Party
Sale (and which are not paid by the Company), in each case, other than any such
liability or obligation which is particular to PBC and from which such Executive
Stockholder derives no benefit. In addition, in the event any such Transfer by
an Executive Stockholder gives rise (in the opinion of counsel to the Company
chosen by the Board of Directors) to an obligation on the part of the Company or
MRT to deduct and withhold income taxes for which the Executive Stockholder is
liable as a result of such Transfer, the Company and MRT shall have a lien
against the proceeds of such Transfer for the amount of such withholding
obligations. To the extent the cash proceeds of such Transfer
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immediately due on such Transfer are insufficient for this purpose, the Company
and MRT shall be entitled to deduct and withhold the necessary amount from any
amounts then and in the future owing to the Executive Stockholder by the Company
or MRT.
5.3 Participation Right.
(a) Subject to the limitations and exceptions set forth herein, if
the Board of Directors shall determine to allow a Third Party to make an Equity
Investment in the Company and become a Stockholder thereof (a "Third Party
Investment"), at least ten (10) days prior to any such proposed Third Party
Investment to which a participation right applies as aforesaid, the Company
shall give to each then Executive Stockholder a written notice of such proposed
Third Party Investment, together with particulars thereof, including the
proposed amount and form of consideration to be paid by, and the numbers and
class of Shares to be issued to, the Third Party and the terms and conditions of
payment, and, in such notice, the Company shall offer to each then Executive
Stockholder, subject to consummation of such proposed investment, for twenty
(20) days commencing on the giving of such notice, at the same price per Share
and on the same terms and conditions, the opportunity to purchase from the
Company all or a portion of such Shares as would, if such participation right
were exercised, preserve the Percentage Interest of such Executive Stockholder.
Anything contained herein to the contrary notwithstanding, the written notice of
the proposed Third Party Investment to which a participation right applies as
aforesaid need not be given prior to such proposed Third Party Investment so
long as such offer is sent within five (5) days thereafter and remains open for
a twenty (20) day period from receipt thereof.
(b) If an Executive Stockholder elects to accept such offer, such
Executive Stockholder shall so signify by written notice to the Company given
within such ten-day period, indicating the portion of the Shares offered in
consideration for the proposed Third Party Investment which such Executive
Stockholder elects to purchase, and deliver the purchase price to the Company
upon or within ten (10) days after the proposed closing date of the Third Party
Investment. If the amount of the proposed Third Party Investment or any of the
price or the material terms or conditions thereof is changed, the Company shall
notify each then Executive Stockholder of any such change and such Executive
Stockholder shall have the later to expire of five (5) days after such Executive
Stockholder's receipt of such notice of change or twenty (20) days after receipt
of the initial offer within which to accept the initial offer as so changed or
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to rescind or modify such Executive Stockholder's prior acceptance.
(c) The provisions of this Section 5.3 shall not be applicable to
the sale or issuance by the Company of Shares and other securities of the
Company issued or issuable upon conversion or exercise of any interests,
securities, options or rights theretofore sold, issued or granted by the
Company, Shares or other securities issued pursuant to a merger, consolidation
or reorganization of the Company, Shares or other securities of the Company
issued for consideration other than cash, Shares or options, warrants or like
securities, granted or issued to employees of or consultants to the Company (or
any subsidiary thereof) reflecting the allocation of a number of Shares not
exceeding 10% of the total number of Shares then held by all stockholders of the
Company, Shares or other securities issued in connection with any split or
combination or reclassification of the Shares or other securities of the Company
not affecting relative equity interests, or securities issued in connection with
an Initial Public Offering.
5.4 Purchase and Sale of Shares upon Termination of Employment. The
following provisions shall be applicable in the event that an Executive
Stockholder's employment with the Company or MRT is terminated (such terminated
Executive Stockholder being referred to herein as a "Terminated Stockholder",
with all references in this Section 5.4 to a "Terminated Stockholder" being
deemed to include such Terminated Stockholder's guardian or other legal
representatives, if any, and transferees under the laws of descent and
distribution, if any, unless the context otherwise requires).
(a) Right to Purchase. If an Executive Stockholder's employment with
the Company and MRT shall terminate for any reason whatsoever, the Company shall
have the right, but not the obligation, to purchase all, but not less than all,
of the Shares of the Terminated Stockholder (such Shares being referred to
herein as the "Call Shares") at a price equal to the Appraised Value (as
hereinafter defined) thereof as of the date such Terminated Stockholder's
employment with the Company and MRT is terminated (such date being referred to
herein as the "Termination Date"). The rights of the Company set forth in this
subsection may be exercised by a written notice from the Company to the
Terminated Stockholder at any time no later than ninety (90) days following the
Termination Date (the "Call Notice"). The Call Notice shall specify the time
(which shall not be more than twenty-one (21) days following the determination
of the Appraised Value) and place for closing the purchase of the Call
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Shares. The purchase of such Call Shares shall take place in accordance with,
and at the time and place specified in, the Call Notice.
(b) Obligation to Purchase. If an Executive Stockholder's employment
with the Company and MRT shall terminate for any reason other than Cause (as
then defined in such Stockholder's Employment Agreement) or a voluntary
termination by such Executive Stockholder, the Terminated Stockholder shall have
the right, but not the obligation, to cause the Company to purchase all, but not
less than all, of the Shares of the Terminated Stockholder (the same being
referred to herein as the "Put Shares") and at a price equal to the Appraised
Value thereof as of the Termination Date. The rights of the Terminated
Stockholder set forth in this subsection may be exercised by a written notice
from the Terminated Stockholder to the Company at any time no later than ninety
(90) days following the Termination Date (the "Put Notice"). The Put Notice
shall specify the time (which shall not be more than twenty-one (21) days
following the determination of the Appraised Value) and place for closing the
purchase of the Put Shares. The purchase of such Put Shares shall take place in
accordance with, and at the time and place specified in, the Put Notice.
(c) Determination of Appraised Value; Terms of Payment; Other
Provisions.
(i) For purposes hereof, the "Appraised Value" of any Call
Shares or Put Shares to be purchased and sold pursuant to the provisions of this
Section 5.4 shall be equal to the fair value thereof, taking into account only
the Vested Shares held by and the Vested Phantom Shares allocated to the
Terminated Stockholder, and not attributing any value to any Unvested Basic
Shares or any Unvested Phantom Shares theretofore held by or allocated to such
Terminated Stockholder, such value to be determined by an independent appraiser
mutually agreeable to the Company and the Terminated Stockholder, which
appraiser shall be appointed within fifteen (15) days following the date of the
Call Notice or Put Notice, as the case may be. The Company and the Terminated
Stockholder shall use their best efforts to cause the appraiser to determine the
Appraised Value within thirty (30) days from the date of such appointment. If
the Company and the Terminated Stockholder are unable to agree upon an
independent appraiser, then the Company and the Terminated Stockholder shall
each promptly select a recognized independent appraiser, and each of the
appraisers so appointed shall be instructed to jointly select, within seven (7)
days of their appointment, a third independent appraiser, who shall then be
instructed to determine
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such fair value within fifteen (15) days after his appointment. The
determination of Appraised Value in accordance with this Section 5.4 shall be
final and binding upon the Company and the Terminated Stockholder. The cost of
determining the Appraised Value in the case of the purchase and sale of Call
Shares the purchase and sale of Put Shares shall be borne 50% by the Company and
50% by the Terminated Stockholder.
(ii) The purchase price for the purchase and sale of the Call
Shares or the Put Shares, as the case may be, pursuant to the provisions of this
Section 5.4 shall be paid out of the net cash flow of the Company and MRT to the
extent that such purchase price balance plus the purchase price balance
resulting from any other purchase by the Company of Shares, plus all amounts
payable in respect of Phantom Shares by reason of the occurrence of any Payment
Event(s) (as hereinafter defined), does not exceed 50% of such net cash flow. In
the event the Company shall have any such purchase price payment obligations
and/or Phantom Share payment obligations to two or more Stockholders, the amount
payable out of such net cash flow for any given Company Year shall be allocated
pro rata among such Stockholders. The remaining purchase price balance for any
such purchase and sale shall be due and payable on the fifth (5th) anniversary
of the closing date of the purchase, and shall bear interest at a rate equal to
the rate announced from time to time by the principal lending bank to the
Company, PBC or PBC's Parent Entities, as its prime rate, or in the absence
thereof at the prime rate published in The Wall Street Journal or an analogous
publication selected by the Board of Directors.
(iii) On the closing date of the purchase, such Terminated
Stockholder shall pay to the Company any and all liabilities and monetary
obligations of the Terminated Stockholder to the Company, and the Company shall
be entitled to deduct from the purchase price payable hereunder the full amount
of such liabilities and obligations, as well as any income tax which the Company
is obligated (in the opinion of counsel chosen by the Board of Directors) to
deduct and withhold as a result of the subject purchase and sale. At the
closing, the Terminated Stockholder shall transfer, convey and deliver all
right, title and interest in and to such Call Shares or Put Shares being
transferred by such party, which shall constitute (and, at the closing, the
Terminated Stockholder shall certify the same in writing) good and unencumbered
title to such Call Shares or Put Shares, free and clear of all Liens. In
addition, the Terminated Stockholder shall deliver to the Company at such
closing any opinions of counsel (relating to transferability) and certificates
that the Company may reasonably request.
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(iv) In each case where the Company is entitled or required to
exercise an option to purchase Call Shares or Put Shares pursuant to this
Section 5.4, each Stockholder (including the Terminated Stockholder) shall, at
the request of the Company, take such action as is necessary and lawful to
permit the Company's exercise of such option and such purchase, including, but
not limited to, the incurrence of indebtedness and, if applicable, the creation
of legally available surplus (whether by reduction of capital, revaluation of
assets or otherwise).
ARTICLE VI
CERTAIN OTHER AGREEMENTS
6.1 Phantom Shares.
(a) The grant by the Company of Phantom Shares to the Executive
Stockholders is governed by this Section 6.1. The number of Phantom Shares
allocated to each Executive Stockholder are as set forth on Exhibit A hereto
opposite the name of such Executive Stockholder. Such Phantom Shares shall be
Unvested Phantom Shares until they have become Vested Phantom Shares pursuant to
Article 3 hereof. Each Phantom Share constitutes a "phantom share unit"
corresponding to one share of Class B Common Stock and shall, upon and only upon
such Phantom Share becoming a Vested Phantom Share, entitle the grantee thereof
to a non-transferable right to receive from the Company the following:
(i) If, as and when a cash dividend or distribution shall be
made to the holders of the Company's Common Stock, but only if no Payment Event
shall have occurred, cash in an amount equal to the per share amount of such
dividend or distribution.
(ii) Upon the termination of the grantee's employment with the
Company and MRT, or any other event which would entitle the grantee to have his
Shares purchased by the Company pursuant to this Agreement (other than pursuant
to Section 6.2 hereof)(a "Payment Event"), an amount (the "Redemption Amount")
equal to the sum of (i) the fair market value per share of Common Stock on the
date of issuance thereof (the "Base Value"), plus (ii) the applicable Phantom
Share Percentage (as hereinafter defined), multiplied by the amount, if any, by
which the fair market value per share of Common Stock on the date of the Payment
Event (the "Payment Event Value"), exceeds the Base Value; provided, however,
that if the Base Value
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exceeds the Payment Event Value, then the Redemption Amount shall be equal to
the Payment Event Value; in all cases as appropriately adjusted for stock
splits, stock dividends and stock combinations affecting the Common Stock
between the date of such issuance and the date of the Payment Event. The fair
market value per share of Common Stock on the date in question shall be
determined, on a fully diluted basis, treating as if they were issued and
outstanding shares of Common Stock all share equivalents of each Unvested
Phantom Share and each other phantom share or stock appreciation right that may
be granted by the Company (that is, reflecting the aggregate number of shares of
Common Stock to or upon which each phantom share or stock appreciation right is
equivalent or based). Such fair market value shall be determined in a manner
consistent with the determination of Appraised Value in Section 5.4(c) hereof,
unless the Common Stock is then publicly traded, in which event fair market
value will be determined as the most recent closing market price per share of
the Common Stock. The "Phantom Share Percentage" applicable to a particular
grantee shall be 108% (or 111% if such grantee is at the time of such payment a
full time resident of the State of Georgia). Upon the occurrence of the first
Payment Event to occur after the date hereof with respect to a particular
grantee of Phantom Shares, the entitlement of the grantee to payment in respect
thereof pursuant to this Section 6.1(a)(ii) shall be deemed the constitute the
sole right of payment in respect of such Phantom Shares and such Phantom Shares
shall thenceforth be deemed canceled and terminated. No Phantom Share, whether
or not a Vested Phantom Share, shall constitute or entitle the grantee to any
share of capital stock of the Company or any right as a stockholder of the
Company in respect thereof. If the Company shall so require, Phantom Shares
shall be evidenced by separate written agreements between the Company and the
grantee thereof consistent with the provisions of this Section 6.1(a) and
otherwise in form and substance reasonably required by the Company.
(b) Any payment required to be made by the Company in respect of
Phantom Shares by reason of the occurrence of a Payment Event shall be made in a
manner consistent with the provisions of clauses (ii) and (iii) of Section
5.4(c) hereof as if in respect of the purchase price for Call Shares or Put
Shares thereunder.
(c) At any time after the date hereof, the Company shall have the
right to issue in cancellation thereof for all or any portion of any Vested or
Unvested Phantom Shares granted by it, shares of Class B Common Stock equal in
number to the number of such Phantom Shares to be so canceled. Upon any such
issuance
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<PAGE>
and cancellation, Shares issued in respect of Vested Phantom Shares shall be
deemed Vested Basic Shares and Shares issued in respect of Unvested Phantom
Shares shall be deemed Unvested Basic Shares and shall only become Vested Basis
Shares at such time as the corresponding Unvested Phantom Shares so cancelled
would have become Vested Phantom Shares pursuant to this Agreement. In the event
that the issuance of Shares pursuant to this paragraph (c) results in income tax
liability to such Executive Stockholder to whom such shares shall be issued, the
Company will offer to such Executive Stockholder a loan in a principal amount
equal to 50% of such tax liability, with the amount of such tax liability being
mutually determined by the accountants for the Company and the accountants for
such Executive Stockholder. Any such loan pursuant to this paragraph (c) shall
bear interest at the lowest rate permitted by the Code and the Regulations to
avoid the imputation of interest, with all principal thereon being repayable on
the earlier of (i) the third anniversary of its issuance and (ii) the
termination of such Executive Stockholder's employment with the Company, and
with accrued interest to be payable quarterly. The terms of such loan and of the
notes and instruments evidencing the same shall provide for the grant to the
Company of a first priority security interest in and pledge of the shares of
capital stock of the Company issued to the holder of the shares in question as
security for the loan, and shall otherwise be in form and substance reasonably
required by the Company.
(d) Any purchase or sale of Phantom Shares contemplated by Article 5
of this Agreement shall be deemed to include the purchase and sale of all
entitlements of the grantee to payment in respect thereof, and upon such
purchase or sale, the selling grantee shall cease to have any right to payment
in respect thereof.
6.2 Exchange for Equity of Public Entity. In the event that PBC is then
the Controlling Stockholder, and in the event that the Board of Directors of PBC
or any Parent Entity of PBC determines to sell to the public equity securities
of PBC or a Parent Entity of PBC (the entity whose equity securities are to be
sold being referred to herein as the "Public Entity") pursuant to an Initial
Public Offering, then, if the Initial Public Offering shall be consummated, the
Executive Stockholders shall have the right and the obligation to exchange their
Shares and Phantom Shares for common share equity in the Public Entity (the
"Exchange") in accordance with the following:
(a) In order for the Exchange to be effected at the option of the
Executive Stockholders, Executive Stockholders
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<PAGE>
holding at least a majority of the Common Shares and Vested Phantom Shares owned
by or allocated to all Executive Stockholders (the "Majority Executive
Stockholders") must give PBC written notice of their intention to effect the
Exchange (an "Exchange Notice") within fifteen (15) days following the date that
the Executive Stockholders are given written notice from PBC of the expected
occurrence of such an Initial Public Offering (an "IPO Notice"). In the Event
that the Majority Executive Stockholders elect to effect the Exchange, all of
the Executive Stockholders will be required to effect the Exchange.
(b) PBC shall have the right to cause the Exchange to occur and to
require the Executive Stockholders to effect the Exchange in accordance with
this Section 6.2 by setting forth in the IPO Notice its demand that the
Executive Stockholders effect the Exchange.
(c) Pursuant to the Exchange, each Executive Stockholder shall be
entitled to receive in exchange for his Shares and Phantom Shares that number of
shares of common stock of the Public Entity ("Public Entity Stock") that have a
fair value which is equivalent to the fair value of the Shares and Phantom
Shares of such Stockholder as of the date of the Exchange (the "Exchange Date"),
based upon the fair value per share of the Public Entity Stock and the fair
value of such Shares and Phantom Shares as of the Exchange Date (after giving
effect to the provisions of Section 3.2 hereof and to the remaining provisions
of this paragraph (c)), as determined by a recognized investment banking firm
appointed by PBC and reasonably acceptable to the Majority Executive
Stockholders (which may be the lead underwriter retained in connection with the
Initial Public Offering). In determining the fair value of an Executive
Stockholder's Shares and Phantom Shares, the fair value of the Company as an
entity (net of indebtedness) shall be determined as of the Exchange Date (the
"Company Value") and the fair value of the Executive Stockholder's Shares and
Phantom Shares shall be deemed to be the portion of the Company Value which
would be allocable and distributable to such Executive Stockholder upon the
liquidation of the Company in accordance with the GCL (after giving effect to
the provisions of Section 3.2(j) hereof as if the Initial Public Offering had
occurred).
(d) The closing of the Exchange shall take place on such date and at
such time as PBC specifies to the Executive Stockholders on not less than three
(3) business days prior notice, and shall only be deemed to be effective if and
when the Initial Public Offering giving rise thereto is consummated.
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<PAGE>
(e) Upon the closing of the Exchange, all of the Executive
Stockholders' rights under this Agreement shall terminate, and the Executive
Stockholders shall no longer be Stockholders of, or have any Shares or any
Phantom Shares or any other equity or other interest in, the Company.
6.3 Outside Businesses of PBC. PBC and/or any affiliate thereof may engage
in and/or possess interests in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Company or any of its subsidiaries (provided, that, for so long as PBC is
the Controlling Stockholder, such business venture is not directly competitive
with a substantial portion of the principal operations of the Company and its
subsidiaries and the Company and the Stockholders shall have no rights, by
virtue of this Agreement or otherwise, in or to such ventures or interests, or
the income or profits derived therefrom, and the pursuit or acquisition of any
such venture or interest, shall not be deemed wrongful or improper in any
manner. Neither PBC nor any affiliate thereof shall be obligated to present any
particular investment or business opportunity to the Company or any of its
subsidiaries even if such opportunity is of a character that, if presented to
the Company and any of its subsidiaries, could be taken by or considered a
business opportunity of the Company or any of its subsidiaries, and PBC or any
affiliate thereof shall have the right to take for its own account and benefit
(individually or as a partner, shareholder, fiduciary or otherwise) or to
recommend to others any such particular venture, investment or business
opportunity.
6.4 Relationship with Affiliates.
(a) Each of the Stockholders hereby acknowledges and agrees that
certain affiliates of PBC may elect to provide various management and support
services to the Company (including for purposes of this Section 6.4, as included
within the definition of the Company, the Company's subsidiaries, including
MRT), including, without limitation, accounting and financial services,
insurance, personnel and human resources services, benefit plan administration,
purchasing services, computer support services, shipping and receiving services
and safety and health training services (collectively, the "Services"). The
Company shall pay the provider(s) of those Services for which costs can
reasonably be established a fair allocable portion of such costs, as determined
based upon relevant factors, including, without limitation, actual costs
attributed to the Company and, where appropriate, the number of employees of the
Company or its consolidated gross sales in relation to the number of employees
44
<PAGE>
or gross sales of those entities sharing such Services with the Company. In
addition to and without limiting the foregoing, PBC (or its affiliates) shall be
entitled to be paid a continuing fee by the Company, for general management and
overhead services for which allocation of costs is not possible, equal to 1.5%
of the consolidated gross revenues of the Company, such fee to be payable
monthly. All determinations as to actual costs, allocations of costs and the
amount to be paid by the Company in respect of the Services shall be made in
good faith by PBC.
(b) Each of the Stockholders hereby acknowledge and agree that the
Company and its subsidiaries ( including MRT) shall be entitled to enter into
such reasonable commercial relationships with PBC and its affiliates, on such
terms and conditions as PBC shall determine.
6.5 Termination of Certain Rights. The rights granted to the Executive
Stockholders pursuant to Sections 5.2, 5.3, 5.4 and 6.2 hereof shall not be
applicable to, and shall terminate and be of no further force and effect upon
the closing of, an Initial Public Offering.
6.6 Individual Obligations. Each of the respective obligations of the
Members, the Stockholders or the Executive Stockholders under this Agreement
shall be the respective obligations individually of each Member, Stockholder or
Executive Stockholder and shall be and remain binding on each such Member,
Stockholder or Executive Stockholder notwithstanding the failure of any other
Member, Stockholder or Executive Stockholder to comply with such obligation as
its applies to him or it.
6.7 Legend on Certificates. So long as this Agreement shall remain in
effect, the following statement shall be inscribed on all certificates
representing Shares held by any of the parties hereto (and their successors and
assigns) and upon all certificates issued in lieu or in substitution therefor:
"The shares represented by this certificate are subject to a certain
Agreement dated as of January ___, 1999, as the same may be amended
or supplemented from time to time, a copy of which is on file at the
principal office of the Corporation. Any attempted transfer of the
shares represented by this certificate, or any interest therein, in
violation of said agreement shall be invalid."
6.8 Failure to Transfer. In the event that a Stockholder or any heir,
personal representative, successor or assign of
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<PAGE>
such Stockholder (the "Seller"), having become obligated to Transfer Shares
pursuant to this Agreement, shall fail to deliver such Shares in accordance with
the terms of this Agreement, the person entitled to acquire such Shares pursuant
to such Transfer (the "Purchaser") may, at its option (and if applicable), in
addition to all other remedies it may have, send to the Seller by registered or
certified mail, return receipt requested, the purchase price for such Shares as
determined pursuant to this Agreement. In the event of such failure, and if
applicable the Purchaser's compliance with the preceding sentence, the Company,
upon written notice to the Seller, (i) shall cancel on its books the certificate
or certificates representing the Shares to be Transferred, (ii) shall issue, in
lieu thereof, a new certificate in the name of the Purchaser representing such
Shares and (iii) shall deliver such new certificate or certificates to the
Purchaser and thereupon all of the Seller's rights in and to said Shares shall
terminate.
ARTICLE VII
BOOKS AND RECORDS
7.1 Books, Records and Financial Statements of the Company.
(a) At all times during the existence of the Company, the Company
shall maintain, at its principal place of business, separate books of account
for its operations in accordance with generally accepted accounting principles
and in accordance with applicable tax accounting principles.
(b) The following financial information shall be transmitted by the
Company to each Stockholder within four (4) months after the close of each
Company Year:
(i) consolidated balance sheet of the Company and its
subsidiaries as of the beginning and close of such Company Year;
(ii) consolidated income statement of the Company and its
subsidiaries as of the close of such Company Year.
(c) As and when available, the Company shall furnish to each
Stockholder on a quarterly basis, unaudited consolidated quarterly financial
statements of the Company and its subsidiaries for such quarter.
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<PAGE>
7.2 Books, Records and Financial Statements of MRT.
(a) At all times during the continuance of MRT, MRT shall maintain,
at its principal place of business, separate books of account for its operations
in accordance with generally accepted accounting principles and in accordance
with applicable tax accounting principles.
(b) The following financial information shall be transmitted by MRT
to each Member within four (4) months after the close of each MRT Year:
(i) balance sheet of MRT as of the beginning and close of such
MRT Year;
(ii) statement of MRT profits and losses for such MRT Year;
(iii) statement of the Members' Capital Accounts as of the
close of such MRT Year, and changes therein during such MRT Year; and
(iv) a statement indicating such Member's share of each item
of MRT income, gain, loss, deduction or credit for such MRT Year for income tax
purposes.
(c) As and when available, MRT shall furnish to each Member on a
quarterly basis, unaudited consolidated quarterly financial statements of MRT
for such quarter.
7.3 Accounting Method. For both financial and tax reporting purposes and
for purposes of determining profits and losses, the books and records of the
Company and MRT shall be kept on the accrual method of accounting.
7.4 Audit. At any time at the sole discretion of the Managing Member(s)
and/or the Board of Directors, as the case may be, the financial statements of
MRT and/or the Company may be audited by an independent certified public
accountant, selected by the Managing Member(s) or Board of Directors, as the
case may be (which may be the accountant for PBC), with such audit to be
accompanied by a report of such accountant containing its opinion. The cost of
such audits will be an expense of MRT or the Company, as the case may be. A copy
of any such audited financial statements and accountant's report will be made
available for inspection by the Members or the Stockholders, as the case may be.
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<PAGE>
7.5 Fiscal Year. The fiscal year of MRT or of the Company shall in either
case be the calendar year or in either case such other period as shall be
determined by the Managing Member(s)or the Board of Directors, as the case may
be.
ARTICLE VIII
MISCELLANEOUS
8.1 Amendments.
(a) Except as otherwise provided in this Section 8.1, this Agreement
may not be amended except by a writing executed by PBC, the Company and by
Executive Stockholders constituting the Majority Executive Stockholders.
(b) PBC and the Company may amend this Agreement without the consent
of any Stockholder to reflect changes validly made in the membership of MRT or
the identity of the Stockholders and corresponding changes in the terms and
provisions of this Agreement necessary to reflect or conform with any such
change, to reflect changes permitted in accordance with this Agreement in the
Capital Accounts and/or MRT Percentage Interests of the Members or the number,
class or series of Shares owned by any Stockholder, to clarify any ambiguities
herein or to appropriately adjust any mechanics or procedures set forth herein
so long as the rights of the Executive Stockholders are not prejudiced thereby,
or if such amendment is of an inconsequential nature (as reasonably determined
by the Board of Directors) and does not affect the rights of the Executive
Stockholders in any adverse respect.
(c) Anything in the foregoing provisions of this Section 8.1 to the
contrary notwithstanding, this Agreement shall be amended from time to time
(without any required consent of the Stockholders) in each and every manner
deemed necessary or appropriate by the Board of Directors to comply with the
then existing requirements of the Code and the Regulations and the Rulings of
the Treasury Department or Internal Revenue Service affecting MRT or the
Company.
8.2 Specific Performance. The parties hereto agree that money damages or
other remedy at law would not be sufficient or adequate remedy for any breach or
violation of, or a default under, this Agreement by them and that, in addition
to all other remedies available to them, each of them shall be entitled to an
injunction restraining such breach, violation or default or
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<PAGE>
threatened breach, violation or default and to any other equitable relief,
including without limitation specific performance, without bond or other
security being required.
8.3 Entire Agreement. This Agreement sets forth the entire and only
agreement or understanding among the parties hereto relating to the subject
matter hereof and supersedes and cancels all previous agreements, letters,
negotiations, commitments and representations in respect thereof among them, and
no party shall be bound by any conditions, definitions, warranties or
representations with respect to the subject matter of this Agreement.
8.4 Notices. Any and all notices, demands or requests required or
permitted to be given under this Agreement shall be given in writing and
addressed to the parties hereto at their addresses as reflected in the records
of the Company from time to time and to such other addresses as they may
respectively from time to time designate by written notice, given in accordance
with the terms of this Section. Notices given as provided in this Section shall
be deemed effective: on the date hand delivered; on the first business day
following the sending thereof by recognized overnight courier; and on the fifth
calendar day (or, if it is not a business day, then the next succeeding business
day thereafter) after the depositing thereof into the exclusive custody of the
U.S. Postal Service.
8.5 Gender and Number. Wherever from the context it appears appropriate,
each term stated in either the singular or plural shall include the singular and
plural, and pronouns stated in either the masculine, the feminine or the neuter
gender shall include the masculine, the feminine and the neuter.
8.6 Benefits of Agreement. This Agreement shall be binding upon and inure
to the benefit of the respective heirs, personal representatives, successors and
permitted assigns of the parties hereto; provided that nothing contained herein
shall permit any assignment of any Shares or Phantom Shares or any rights or
obligations under this Agreement except as elsewhere expressly permitted in this
Agreement. This Agreement shall not inure to the benefit of or be enforceable by
any creditor of MRT or the Company or of any Member or Stockholder or be deemed
to create or be for the benefit of any person not a party hereto.
8.7 Waivers. No waiver by any party hereto of any failure by any other
party hereto to comply with any obligation under this Agreement shall be
effective unless in writing and signed by the party granting such waiver, and no
such waiver shall be
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deemed a waiver of any subsequent failure of the same or similar nature.
8.8 Severability. If any provision of this Agreement would be held to be
invalid, prohibited or unenforceable in any jurisdiction for any reason, such
provision, as to such jurisdiction only, shall be ineffective to the extent of
such invalidity, prohibition, unenforceability, without invalidating the
remaining provisions of this Agreement, and the validity, legality and
enforceability of such remaining provisions shall not be affected in any way
thereby.
8.9 Effective of Certain Changes. All of the provisions of this Agreement
shall apply to all of the Shares presently owned by any of the Stockholders as
well as to all other shares of the Company which may be issued or transferred to
any of them in consequence of any additional issuance, purchase, exchange or
reclassification of shares, corporate reorganization, or any other form of
recapitalization, or consolidation, or merger, or share split, or share
dividend, or which are acquired by any of them in any other manner. The number
of Shares subject to the provisions of this Agreement and all references herein
to numbers of Shares and purchase prices per Share shall be appropriately
adjusted in the case of any subdivision or combination of the outstanding Shares
into a greater or smaller number of shares, recapitalization, reorganization,
reclassification of shares, stock dividend, or like event.
8.10 Headings. The headings and subheadings of Sections of this Agreement
and/or any Schedule hereto are for convenience of reference only and shall not
constitute part of or define or limit any of the provisions of this Agreement or
such Schedule.
8.11 Counterparts. This Agreement may be executed by the parties hereto in
counterparts, or by separate signature page or instrument, each of which shall
be considered an original, and all of which shall together constitute but one
and the same agreement.
8.12 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without giving effect to
contrary choice of law principles of such State.
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IN WITNESS WHEREOF, each of the undersigned has duly executed this
Agreement as of the date first above written.
PHILIPP BROTHERS CHEMICALS, INC.
By: /s/ Nathan Bistricer
----------------------------------------
Nathan Z. Bistricer
Vice President
MRT MANAGEMENT CORP.
By: /s/ Nathan Bistricer
----------------------------------------
Nathan Z. Bistricer
Vice President
EXECUTIVE STOCKHOLDERS:
/s/ Hugh Shannonhouse
--------------------------------------------
Hugh P. Shannonhouse
/s/ Richard Basaraba
--------------------------------------------
Richard Basaraba
/s/ Robert Styron
--------------------------------------------
Robert Styron
51
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Schedule A
<TABLE>
<CAPTION>
Shares of Shares of Vested Vested Unvested
Series A Series B Class A Class B Class B Unvested Vested
Preferred Preferred Common Common Common Phantom Phantom
Stockholders: Stock Stock Shares Shares Shares Shares Shares
------------- ----- ----- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Philipp Brothers 64.035 64.035 -0- -0- -0-
Chemicals, Inc.
Executive Stockholders
----------------------
Hugh P. Shannonhouse 9.8336 -0- 5.6849 -0-
Richard Basaraba 4.9168 -0- 2.8424 -0-
Robert Styron 3.25 -0- 2.8424 -0-
</TABLE>
<PAGE>
Schedule B
Members:
Units
-----
Managing Member:
MRT Management Corp. 128.07
