SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
IMPCO TECHNOLOGIES, INC.
- - --------------------------------------------------------------------------------
(Name of Issuer)
Shares of Common Stock, par value $0.001 per share
- - --------------------------------------------------------------------------------
(Title of Class of Securities)
45255W106
- - --------------------------------------------------------------------------------
(CUSIP Number)
Questor Partners Fund, L.P.
Questor Side-by-Side Partners, L.P.
103 Springer Building
3411 Silverside Road
Wilmington, DE 19810
(302) 478-6160
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and
Communications)
Copies to:
Edward L. Scarff Christopher D. Dillon, Esq.
601 California Street Shearman & Sterling
Suite 1450 555 California Street, Suite 2000
San Francisco, CA 94108 San Francisco, CA 94104
Telephone: (415) 433-6670 Telephone: (415) 616-1100
- - --------------------------------------------------------------------------------
June 5, 1998
- - --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d- 1(b)(3) or (4), check the following box / /.
<PAGE>
CUSIP No. 45255W106
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Questor Partners Fund, L.P.
------------------------------------------------------------------------
------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
/x/ (a)
-----------------------------------------------------------------
/ / (b)
-----------------------------------------------------------------
(3) SEC Use Only
------------------------------------------------------------
(4) Source of Funds (See Instructions) OO
-------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e). / /
(6) Citizenship or Place of Organization
Delaware
------------------------------------------------------------------------
- - ---------------
Number of (7) Sole Voting Power 1,898,022
Shares --------------------------------
Beneficially --------------------------------------------------
Owned by (8) Shared Voting Power 136,305
Each ------------------------------
Reporting --------------------------------------------------
Person (9) Sole Dispositive Power 1,898,022
With ---------------------------
- - --------------- --------------------------------------------------
(10) Shared Dispositive Power 136,305
-------------------------
--------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 2,034,327
----------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
X
------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11) 26.4%
--------------------
(14) Type of Reporting Person (See Instructions) PN
----------------------------
Page 2 of 33
<PAGE>
CUSIP No. 45255W106
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Questor Side-by-Side Partners, L.P.
------------------------------------------------------------------------
------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
/x/ (a)
-----------------------------------------------------------------
/ / (b)
-----------------------------------------------------------------
(3) SEC Use Only
------------------------------------------------------------
(4) Source of Funds (See Instructions) OO
-------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e). / /
(6) Citizenship or Place of Organization
Delaware
------------------------------------------------------------------------
- - ---------------
Number of (7) Sole Voting Power 136,306
Shares --------------------------------
Beneficially --------------------------------------------------
Owned by (8) Shared Voting Power 1,898,022
Each ------------------------------
Reporting --------------------------------------------------
Person (9) Sole Dispositive Power 136,305
With ---------------------------
- - --------------- --------------------------------------------------
(10) Shared Dispositive Power 1,898,022
-------------------------
--------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 2,034,327
----------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
X
------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11) 26.4%
--------------------
(14) Type of Reporting Person (See Instructions) PN
----------------------------
Page 3 of 33
<PAGE>
Item 1. Security and Issuer.
-------------------
The class of equity securities to which this Statement on
Schedule 13D (this "Statement") relates is the shares of common stock, par value
$0.001 per share (the "Common Shares"), of IMPCO Technologies, Inc. ("IMPCO"), a
Delaware corporation. The principal executive offices of IMPCO are located at
16804 Gridley Place, Cerritos, California 90703.
Item 2. Identity and Background.
-----------------------
This Statement is being filed by Questor Partners Fund, L.P., a
Delaware limited partnership ("Questor Partners"), and Questor Side-by-Side
Partners L.P., a Delaware limited partnership ("Questor SBS").
Questor Partners and Questor SBS were formed to acquire interests
in, among others, underperforming companies and other special situations where
they, together with management, can make a significant contribution to the
company's success through Questor's and management's influence at the board of
directors' level and like-minded management's influence at the operating level.
The general partner of Questor Partners is Questor General Partner, L.P., a
limited partnership organized under the laws of Delaware ("QGP"), whose sole
business is to act as a general partner of Questor Partners. The general partner
of QGP is Questor Principals, Inc., a Delaware corporation, the business of
which is to act as general partner of QGP and of Questor SBS. Day-to-day
management of Questor Partners and Questor SBS is conducted by Questor
Management Company, a Delaware corporation.
The sole directors and shareholders of Questor Principals, Inc.
and Questor Management Company are Jay Alix, Melvyn N. Klein, Dan W. Lufkin and
Edward L. Scarff. Mr. Alix, who also serves as President and Chief Executive
Officer of Questor Principals, Inc. and Questor Management Company, is the
founder, and for the past five years has been a principal, of Jay Alix &
Associates, a nationally-recognized turnaround and crisis management firm based
in Southfield, Michigan. Mr. Klein is a merchant banker and attorney who
currently acts, and for the past five years has acted, as the managing general
partner of GKH Investments, L.P., a $550 million equity investment partnership.
Mr. Lufkin was a co-founder of Donaldson, Lufkin & Jenrette and is currently,
and for the past five years has been, a private investor. Mr. Scarff is a former
president of Transamerica Corporation and is currently, and for the past five
years has been, a private investor. As described in Item 4 below, Mr. Scarff has
been elected to the Board of Directors of IMPCO. The executive officers of the
Questor entities are Mr. Alix and Robert E. Shields. Before joining the Questor
entities in January 1995, Mr. Shields was a partner in the Philadelphia-based
law firm of Drinker Biddle & Reath, where at various times during his last five
years at the firm he served as chief financial officer, a managing partner and
head of the firm's business and finance group.
Page 4 of 33
<PAGE>
The principal offices of Questor Partners, Questor SBS, QGP and
Questor Principals, Inc. are located at 103 Springer Building, 3411 Silverside
Road, Wilmington, Delaware 19810. The principal offices of Questor Management
Company are located at 4000 Town Center, Suite 530, Southfield, Michigan 48075.
During the last five years, none of Questor Partners, Questor SBS
or any of the entities or persons named above have been (i) convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding were or are subject to
a judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
On June 5, 1998, Questor Partners acquired 1,324,866 Common
Shares and 3,032 shares of 1993 Series 1 Preferred Stock, par value $0.001 per
share ("Preferred Shares"), of the Company (which are convertible into 573,156
Common Shares), and Questor SBS acquired 95,095 Common Shares and 218 Preferred
Shares (which are convertible into 41,210 Common Shares).
Such Common Shares and Preferred Shares were acquired pursuant to
the Stock Purchase Agreement, dated May 6, 1998, among Questor Partners, Questor
SBS, David T. O'Neal, Jr. and the Estate of Edwin J. Schneebeck, Bethel J.
Schneebeck, David E. Schneebeck, Troy Schneebeck, Timothy J. Schneebeck, The
Schneebeck Family Trust, Judith S. Bensinger, Peter B. Bensinger, and The
Schneebeck Foundation (the "Stock Purchase Agreement").
Questor Partners and Questor SBS acquired such Common Shares for
$13.50 per share in cash and acquired such Preferred Shares for $2,551.98 per
share in cash.
Item 4. Purpose of Transaction.
----------------------
Questor Partners and Questor SBS have acquired the Common Shares
and the Preferred Shares to which this Schedule 13D relates for the purpose of
making an investment in IMPCO.
Questor Partners and Questor SBS from time to time intend to
review their investment in IMPCO on the basis of various factors, including
IMPCO's business, financial condition, results of operations and prospects,
general economic and industry conditions, the securities markets in general and
those for IMPCO's securities in particular, as well as other
Page 5 of 33
<PAGE>
developments and other investment opportunities. Based upon such review, Questor
Partners, and Questor SBS will take such actions in the future as they may deem
appropriate in light of the circumstances existing from time to time. If Questor
Partners and Questor SBS believe that further investment in IMPCO is attractive,
whether because of the market price of IMPCO's securities or otherwise, they may
acquire Common Shares and/or Preferred Shares either in the open market or in
privately negotiated transactions. Similarly, depending on market and other
factors, Questor Partners and Questor SBS may determine to dispose of some or
all of the Common Shares or Preferred Shares currently owned by them or
otherwise acquired by them either in the open market or in privately negotiated
transactions.
Except as set forth above, Questor Partners and Questor SBS have
not formulated any plans or proposals which relate to or would result in: (i)
the acquisition by any person of additional securities of IMPCO or the
disposition of securities of IMPCO; (ii) an extraordinary corporate transaction
involving IMPCO or any of its subsidiaries; (iii) a sale or transfer of a
material amount of the assets of IMPCO or any of its subsidiaries; (iv) any
material change in IMPCO's capitalization or dividend policy; (v) any other
material change in IMPCO's business or corporate structure; (vi) any change in
IMPCO's charter or bylaws or other instruments corresponding thereto or other
action which may impede the acquisition of control of IMPCO by any person; (vii)
causing a class of IMPCO's securities becoming deregistered or delisted; (viii)
a class of equity securities of IMPCO becoming eligible for termination of
registration or (ix) any action similar to any of those enumerated above. The
Board of Directors of IMPCO has elected Edward L. Scarff and Christopher G.
Mumford to serve as directors on IMPCO's Board. As described in Item 2 above,
Mr. Scarff is a director and shareholder of Questor Principals, Inc. and Questor
Management Company. Mr. Mumford is a managing director of Questor Partners Fund,
L.P.
Item 5. Interest in Securities of Issuer.
--------------------------------
(a) The table set forth below indicates the number of Common
Shares and Preferred Shares owned by Questor Partners and Questor SBS. The
percentage calculations are based on 7,091,601 Common Shares being outstanding
as of April 30, 1998 (according to information provided by the Company) and
assume conversion of the 3,250 Preferred Shares purchased by Questor Partners
and Questor SBS into 614,366 Common Shares.
Page 6 of 33
<PAGE>
<TABLE>
<CAPTION>
Number of
Common Shares Beneficial
into which Total Ownership
Number of Number of Preferred Shares number of Percentage of
Common Shares Preferred Shares are convertible Common Shares Common Shares
------------- ---------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Questor 1,324,866 3,032 573,156 1,898,022 24.6%
Partners
Questor 95,095 218 41,210 136,305 1.8%
SBS ------ --- ------ ------- ---
Total 1,419,961 3,250 614,366 2,034,327 26.4%
</TABLE>
Except for Questor Partners and Questor SBS, none of the other
persons named in Item 2 above own any interests in Common Shares or Preferred
Shares.
(b) The number of Common Shares with respect to which Questor
Partners and Questor SBS (i) have sole voting power, (ii) share voting power,
(iii) have sole dispositive power and (iv) share dispositive power, are listed
in the responses to Items 7, 8, 9 and 10, respectively, on the cover pages filed
herewith, and such responses are incorporated by reference herein.
(c) Except as described in this Statement on Schedule 13D, none
of Questor Partners or Questor SBS or any party referred to above, has acquired
or disposed of, or entered into any other transaction with respect to, any
Common Shares or Preferred Shares during the past 60 days.
(d) None.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
--------------------------------------------------------
with Respect to Securities of Issuer.
------------------------------------
On June 5, 1998, Questor Partners and Questor SBS granted certain
options to certain persons to purchase a number of the Common Shares that were
acquired by Questor Partners and Questor SBS pursuant to the Stock Purchase
Agreement.
Page 7 of 33
<PAGE>
The numbers of options granted to each person are listed in the
table below. Robert Stemmler is President and Chief Executive Officer of IMPCO,
Syed Hussain is Vice President of Technology and Automotive OEM Operations of
IMPCO, Dale Rasmussen is Senior Vice President and Secretary of IMPCO and David
O'Neal is a consultant to IMPCO.
Robert Syed Dale David
Stemmler Hussain Rasmussen O'Neal
-------- ------- --------- ------
Options granted by Questor 106,229 106,229 53,114 113,816
Partners
Options granted by Questor 7,629 7,629 3,814 8,173
SBS ----- ----- ----- -----
Total 113,858 113,858 56,928 121,989
The option exercise price is $13.75 per share. 25% of the options
granted to each person will vest on June 30, 1999 and thereafter on each of the
next three anniversaries of such date. The options will become exercisable only
after the Preferred Shares purchased by Questor and Questor SBS pursuant to the
Stock Purchase Agreement are converted (or are convertible at the option of
Questor and QSS) into the number of Common Shares specified in the Stock
Purchase Agreement and will become exercisable only upon the earlier of (i) five
years after the date of the option agreement and (ii) the sale by Questor and
Questor SBS of 50% or more of the Common Shares owned by them as of the date of
the option agreement (including the number of Common Shares into which the
Preferred Shares owned by them as of the date of the option agreement could be
converted) to a person or entity unaffiliated with Questor (an "Exercise
Event"). To the extent exercised, options granted by each of Questor and Questor
SBS must be exercised concurrently on a pro rata basis. The options will not be
exercisable following December 31, 2003 and any option that is not vested as of
the date of the termination of the full-time employment of the optionholder with
IMPCO (or, in the case of David O'Neal, the date that such person ceases to be a
consultant to IMPCO) will terminate as of such date and be of no further force
and effect; provided the termination of such employment or consulting
relationship is not the result of the death or disability of the optionholder.
Page 8 of 33
<PAGE>
Item 7. Material to Be Filed as Exhibits.
--------------------------------
Exhibit Number Description Page
- - -------------- ----------- ----
1 Joint Filing Agreement dated as of June 15, 13
1998 between Questor Partners Fund, L.P.
and Questor Side-by-Side Partners, L.P.
2 Nonqualified Option Agreement among 14
Questor Partners Fund, L.P., Questor Side-
by-Side Partners, L.P. and David T.
O'Neal, Jr.
3 Nonqualified Option Agreement among 19
Questor Partners Fund, L.P., Questor Side-
by-Side Partners, L.P. and Robert Stemmler
4 Nonqualified Option Agreement among 24
Questor Partners Fund, L.P., Questor Side-
by-Side Partners, L.P. and Syed Hussain
5 Nonqualified Option Agreement among 29
Questor Partners Fund, L.P., Questor Side-
by-Side Partners, L.P. and Dale Rasmussen
Page 9 of 33
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Statement is true,
complete and correct.
June 15, 1998 Questor Partners Fund, L.P.
By: Questor General Partner, L.P., its
general partner
By: Questor Principals, Inc., its
general partner
By: /s/Edward Scarff
--------------------------
Name: Edward Scarff
Title: Principal
Page 10 of 33
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Statement is true,
complete and correct.
June 15, 1998 Questor Side-by-Side Partners, L.P.
By: Questor Principals, Inc., its
general partner
By: /s/Edward Scarff
--------------------------
Name: Edward Scarff
Title: Principal
Page 11 of 33
<PAGE>
Exhibit Index
-------------
Exhibit Number Description Page
- - -------------- ----------- ----
1 Joint Filing Agreement dated as of June 15, 1998 13
between Questor Partners Fund, L.P. and Questor
Side- by-Side Partners, L.P.
2 Nonqualified Option Agreement among Questor 14
Partners Fund, L.P., Questor Side-by-Side
Partners, L.P. and David T. O'Neal, Jr.
3 Nonqualified Option Agreement among Questor 19
Partners Fund, L.P., Questor Side-by-Side
Partners, L.P. and Robert Stemmler
4 Nonqualified Option Agreement among Questor 24
Partners Fund, L.P., Questor Side-by-Side
Partners, L.P. and Syed Hussain
5 Nonqualified Option Agreement among Questor 29
Partners Fund, L.P., Questor Side-by-Side
Partners, L.P. and Dale Rasmussen
Page 12 of 33
<PAGE>
Exhibit 1
JOINT FILING AGREEMENT
The undersigned hereby agree that the Statement on Schedule 13D, dated
June 5, 1998, (the "Schedule 13D"), with respect to the common stock, par value
$0.001 per share, of IMPCO Technologies, Inc., a Delaware corporation, is, and
any amendments thereto executed by each of us shall be, filed on behalf of each
of us pursuant to and in accordance with the provisions of Rule 13d-1(f) under
the Securities and Exchange Act of 1934, as amended, and that this Agreement
shall be included as an Exhibit to the Schedule 13D and each such amendment.
Each of the undersigned agrees to be responsible for the timely filing of the
Schedule 13D and any amendments thereto, and for the completeness and accuracy
of the information concerning itself contained therein. This Agreement may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the 15 day of June, 1998.
Questor Partners Fund L.P.
By: Questor General Partner, L.P., its
general partner
By: Questor Principals, Inc., its
general partner
By:
-------------------------------
Name: Edward Scarff
Title: Principal
Questor Side-by-Side Partners L.P.
By: Questor Principals, Inc., its
general partner
By:
------------------------------
Name: Edward Scarff
Title: Principal
Page 13 of 33
EXECUTION COPY
NONQUALIFIED OPTION AGREEMENT
NONQUALIFIED OPTION AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this "Agreement"), dated as of June 5,
1998, (the "Effective Date") among QUESTOR PARTNERS FUND, L.P., a limited
partnership organized and existing under the laws of the State of Delaware
("Questor"), QUESTOR SIDE-BY-SIDE PARTNERS, L.P., a limited partnership
organized and existing under the laws of the State of Delaware ("QSS"), and the
other party signatory hereto (the "Participant");
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to a Stock Purchase Agreement dated as of May
6, 1998 (the "Stock Purchase Agreement"), Questor and QSS have agreed to acquire
an aggregate of (i) 1,419,962 shares of common stock, par value $0.001 per share
(the "Common Stock"), of IMPCO Technologies, Inc., a Delaware corporation (the
"Company") and (ii) 3,250 shares of preferred stock, par value $0.001 per share
(the "Preferred Stock") of the Company, which are currently convertible into an
aggregate of at least 613,207 shares of Common Stock; and
WHEREAS, the Participant is currently a stockholder of and
consultant to the Company and, upon the terms and subject to the conditions
hereinafter set forth, Questor and QSS desire to provide the Participant with an
incentive to continue to support the Company and to increase his interest in the
success of the Company through the granting to the Participant of nonqualified
stock options (the "Options") to purchase shares of Common Stock;
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements herein contained, the parties hereto hereby agree as
follows:
1. Grant of Options. Subject to the terms and conditions
contained herein and the completion of the transactions contemplated by the
Stock Purchase Agreement, each of Questor and QSS hereby grants to the
Participant, effective as of completion of the transactions contemplated by the
Stock Purchase Agreement, the number of Options specified on the signature page
hereof. Each such Option shall entitle the Participant to purchase from Questor
or QSS, as the case may be, upon payment of the relevant exercise price
specified on the signature page hereof (the "Option Price"), one share of Common
Stock.
2. Vesting and Exercisability of Options. Twenty-five percent of
the Options will vest on June 30, 1999 and thereafter on each of the next three
anniversaries of such date. The Options will become exercisable only after the
Preferred Stock purchased by Questor and QSS pursuant to the Stock Purchase
Agreement is converted (or is convertible at the option of Questor and QSS) into
the number of shares of Common Stock specified in the
Page 14 of 33
<PAGE>
2
Stock Purchase Agreement and will become exercisable only upon the earlier of
(i) five years after the date of this Agreement and (ii) the sale by Questor and
QSS of 50% or more of the shares of Common Stock owned by them as of the
Effective Date (including the number of shares of Common Stock into which shares
of Preferred Stock owned by them as of the Effective Date could be converted) to
a person or entity unaffiliated with Questor (an "Exercise Event"). Questor and
QSS shall provide prompt notice (the "Exercise Event Notice") to the Participant
after the occurrence of an Exercise Event or the signing of an agreement with
respect to the occurrence of an Exercise Event. If an Exercise Event Notice is
given before June 30, 2002 and at a time when options would otherwise continue
to vest pursuant to Section 3, all of the Options will be fully vested as of the
date of the Exercise Event. Within one week after receipt of such notice, the
Participant shall notify Questor or QSS of its irrevocable election to exercise
or not to exercise his option. The closing of an option exercise in connection
with an Exercise Event shall occur on or prior to the later of the effective
date of an Exercise Event or 30 days after receipt of the Exercise Event Notice.
Any Options for which notice of irrevocable exercise is not given within one
week of actual receipt by the Participant of the Exercise Event Notice as
described above shall be automatically forfeited. To the extent exercised by a
Participant, Options granted to Participant by each of Questor and QSS must be
exercised concurrently on a pro rata basis.
3. Expiration of Options. The Options shall not be exercisable
following December 31, 2003 (the "Expiration Date"). Following termination of
Mr. O'Neal's consulting relationship with the Company, the Options, to the
extent then vested (the "Vested Options"), may be exercised as provided
hereunder until the Expiration Date. Any Option which is not a Vested Option as
of the date of the termination of Mr. O'Neal's consulting relationship with the
Company shall terminate as of such date and be of no further force and effect;
provided, however, that if such consulting relationship is terminated as a
result of the death or disability of the Participant, the options will continue
to vest in accordance with their terms; and provided further that the
Participant's refusal to accept a consulting assignment due to a failure of the
parties to agree upon reasonable compensation will not constitute grounds for
the termination of the Participant's options or otherwise affect the vesting of
his options.
4. Restrictions on Transfer of Options. None of the Options may
be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of,
except by testamentary devise or the laws of descent and distribution; provided,
however, that the Participant may transfer vested options for tax planning
purposes to members of his immediate family or to a trust for the benefit of him
and his immediate family. The Options shall be exercisable only by the
Participant or permitted transferees during the Participant's lifetime. Options
that are vested at the time of the Participant's death (or that vest subsequent
to the Participant's death in accordance with Section 3) may be exercised in
accordance with their terms by the Participant's estate.
Page 15 of 33
<PAGE>
3
5. Manner of Exercise. Except as otherwise provided in this
Agreement, the Participant may exercise any or all of the Options that have
vested hereunder, by giving a properly executed written notice to Questor and
QSS. The Participant shall pay the Option Price in full at the time the written
notice of exercise is given to Questor and QSS (or, in the case of an option
exercise in connection with an Exercise Event, within the time periods provided
in Section 2). Such payment shall be in cash, bank certified or cashier's check
or personal check (unless at the time of exercise Questor and QSS in a
particular case determines not to accept a personal check) for the Common Stock
being purchased.
6. Shareholder Rights. The Participant shall have no rights as a
shareholder with respect to any shares of Common Stock issuable upon exercise of
the Options until a certificate or certificates evidencing such shares shall
have been issued to the Participant, and no adjustment shall be made for
dividends or distributions or other rights in respect of any share for which the
record date is prior to the date upon which the Participant shall become the
holder of record thereof.
7. Securities Law Restrictions on Exercise. The Options shall not
be exercisable unless either the Common Stock subject to the Options has been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and qualified under applicable state "blue sky" laws in connection with the
offer and sale thereof, or Questor and QSS determines that such registration and
qualification is not required as a result of the availability of an exemption
from registration under such laws. Subject to the Participant providing Questor
and QSS with an investment representation reasonably satisfactory to Questor and
QSS, Questor and QSS shall use their reasonable best efforts to satisfy any
requirements for an available exemption from registration and qualification.
8. Issuance of Certificates. As soon as practicable following the
exercise of any Options, Questor and QSS shall use their reasonable best efforts
to cause the Company to issue a stock certificate in the Participant's name to
the Participant evidencing the appropriate number of shares of Common Stock
issued in connection with such exercise. In the event the issuance of Common
Stock upon the exercise of such Options is not registered under the Securities
Act, then the stock certificates issued pursuant to this Section 8 shall bear an
appropriate legend regarding Securities Act restrictions on resale.
9. Representations. The Participant represents that this
Agreement has been duly executed and delivered by the Participant and
constitutes a legal, valid and binding agreement of the Participant, enforceable
against the Participant in accordance with its terms.
Page 16 of 33
<PAGE>
4
10. Notices. All notices and other communications provided for
herein shall be in writing and shall be delivered by hand or sent by certified
or registered mail, return receipt requested, postage prepaid, addressed, if to
the Participant, to his or her attention at the mailing address set forth at the
foot of this Agreement (or to such other address as the Participant shall have
specified to the Company in writing) and, if to Questor or QSS, to 103 Springer
Building, 3411 Silverside Road, Wilmington, DE 19810, with copies to Edward L.
Scarff, 601 California Street, Suite 1450, San Francisco, California 94108. All
such notices shall be conclusively deemed to be received and shall be effective,
if sent by hand delivery, upon receipt, or if sent by registered or certified
mail, on the fifth day after the day on which such notice is mailed.
11. No Waiver. The waiver by any party of compliance with any
provision of this Agreement by the other parties shall not operate or be
construed as a waiver of any other provision of this Agreement, or of any
subsequent breach by such party of a provision of this Agreement.
12. Miscellaneous. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same agreement. The headings
of sections and subsections herein are included solely for convenience of
reference and shall not affect the meaning of any of the provisions of this
Agreement. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware.
Page 17 of 33
<PAGE>
5
IN WITNESS WHEREOF, Questor and QSS have caused this Agreement to
be executed by two of its duly authorized officers and the Participant has
executed this Agreement, all as of the Effective Date.
QUESTOR PARTNERS FUND, L.P.
By: Questor General Partner, L.P.
its general partner
By: Questor Principals, Inc.
its general partner
By:
------------------------------
Edward Scarff
Principal
QUESTOR SIDE-BY-SIDE PARTNERS, L.P.
By: Questor Principals, Inc.
its general partner
By:
------------------------------
Edward Scarff
Principal
DAVID T. O'NEAL, JR.
-------------------------------
First San Francisco Corporation
1650 Borel Place, Suite 105
San Mateo, CA 94402
OPTIONS
-------
Number Granted by Questor: [113,816]
Number Granted by QSS: [8,173]
Option Price: U.S.$13.75
Page 18 of 33
EXECUTION COPY
NONQUALIFIED OPTION AGREEMENT
NONQUALIFIED OPTION AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this "Agreement"), dated as of June 5,
1998, (the "Effective Date") among QUESTOR PARTNERS FUND, L.P., a limited
partnership organized and existing under the laws of the State of Delaware
("Questor"), QUESTOR SIDE-BY-SIDE PARTNERS, L.P., a limited partnership
organized and existing under the laws of the State of Delaware ("QSS"), and the
other party signatory hereto (the "Participant");
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to a Stock Purchase Agreement dated as of May
6, 1998 (the "Stock Purchase Agreement"), Questor and QSS have agreed to acquire
an aggregate of (i) 1,419,962 shares of common stock, par value $0.001 per share
(the "Common Stock"), of IMPCO Technologies, Inc., a Delaware corporation (the
"Company") and (ii) 3,250 shares of preferred stock, par value $0.001 per share
(the "Preferred Stock") of the Company, which are currently convertible into an
aggregate of at least 613,207 shares of Common Stock; and
WHEREAS, the Participant is currently an officer and a key
employee of the Company or its subsidiaries and, upon the terms and subject to
the conditions hereinafter set forth, Questor and QSS desire to provide the
Participant with an incentive to remain in the Company's employ and to increase
his interest in the success of the Company through the granting to the
Participant of nonqualified stock options (the "Options") to purchase shares of
Common Stock;
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements herein contained, the parties hereto hereby agree as
follows:
1. Grant of Options. Subject to the terms and conditions
contained herein and the completion of the transactions contemplated by the
Stock Purchase Agreement, each of Questor and QSS hereby grants to the
Participant, effective as of completion of the transactions contemplated by the
Stock Purchase Agreement, the number of Options specified on the signature page
hereof. Each such Option shall entitle the Participant to purchase from Questor
or QSS, as the case may be, upon payment of the relevant exercise price
specified on the signature page hereof (the "Option Price"), one share of Common
Stock.
2. Vesting and Exercisability of Options. Twenty-five percent of
the Options will vest on June 30, 1999 and thereafter on each of the next three
anniversaries of such date. The Options will become exercisable only after the
Preferred Stock purchased by Questor and QSS pursuant to the Stock Purchase
Agreement is converted (or is convertible at
Page 19 of 33
<PAGE>
2
the option of Questor and QSS) into the number of shares of Common Stock
specified in the Stock Purchase Agreement and will become exercisable only upon
the earlier of (i) five years after the date of this Agreement and (ii) the sale
by Questor and QSS of 50% or more of the shares of Common Stock owned by them as
of the Effective Date (including the number of shares of Common Stock into which
shares of Preferred Stock owned by them as of the Effective Date could be
converted) to a person or entity unaffiliated with Questor (an "Exercise
Event"). Questor and QSS shall provide prompt notice (the "Exercise Event
Notice") to the Participant after the occurrence of an Exercise Event or the
signing of an agreement with respect to the occurrence of an Exercise Event. If
an Exercise Event Notice is given before June 30, 2002 and at a time when
options would otherwise continue to vest pursuant to Section 3, all of the
Options will be fully vested as of the date of the Exercise Event. Within one
week after receipt of such notice, the Participant shall notify Questor or QSS
of its irrevocable election to exercise or not to exercise his option. The
closing of an option exercise in connection with an Exercise Event shall occur
on or prior to the later of the effective date of an Exercise Event or 60 days
after receipt of the Exercise Event Notice. Any Options for which notice of
irrevocable exercise is not given within one week of actual receipt by the
Participant of the Exercise Event Notice as described above shall be
automatically forfeited. To the extent exercised by a Participant, Options
granted to Participant by each of Questor and QSS must be exercised concurrently
on a pro rata basis.
3. Expiration of Options. The Options shall not be exercisable
following December 31, 2003 (the "Expiration Date"). Following termination of
the Participant's full time employment with the Company, the Options, to the
extent then vested (the "Vested Options"), may be exercised as provided
hereunder until the Expiration Date. Any Option which is not a Vested Option as
of the date of the Participant's termination of full-time employment with the
Company shall terminate as of such date and be of no further force and effect;
provided, however, that if such employment is terminated as a result of the
death or disability of a Participant, the options will continue to vest in
accordance with their terms.
4. Restrictions on Transfer of Options. None of the Options may
be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of,
except by testamentary devise or the laws of descent and distribution; provided,
however, that the Participant may transfer vested options for tax planning
purposes to members of his immediate family or to a trust for the benefit of him
and his immediate family. The Options shall be exercisable only by the
Participant or permitted transferees during the Participant's lifetime. Options
that are vested at the time of the Participant's death (or that vest subsequent
to the Participant's death in accordance with Section 3) may be exercised in
accordance with their terms by the Participant's estate.
Page 20 of 33
<PAGE>
3
5. Manner of Exercise. Except as otherwise provided in this
Agreement, the Participant may exercise any or all of the Options that have
vested hereunder, by giving a properly executed written notice to Questor and
QSS. The Participant shall pay the Option Price in full at the time the written
notice of exercise is given to Questor and QSS (or, in the case of an option
exercise in connection with an Exercise Event, within the time periods provided
in Section 2). Such payment shall be in cash, bank certified or cashier's check
or personal check (unless at the time of exercise Questor and QSS in a
particular case determines not to accept a personal check) for the Common Stock
being purchased.
6. Shareholder Rights. The Participant shall have no rights as a
shareholder with respect to any shares of Common Stock issuable upon exercise of
the Options until a certificate or certificates evidencing such shares shall
have been issued to the Participant, and no adjustment shall be made for
dividends or distributions or other rights in respect of any share for which the
record date is prior to the date upon which the Participant shall become the
holder of record thereof.
7. Securities Law Restrictions on Exercise. The Options shall not
be exercisable unless either the Common Stock subject to the Options has been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and qualified under applicable state "blue sky" laws in connection with the
offer and sale thereof, or Questor and QSS determines that such registration and
qualification is not required as a result of the availability of an exemption
from registration under such laws. Subject to the Participant providing Questor
and QSS with an investment representation reasonably satisfactory to Questor and
QSS, Questor and QSS shall use their reasonable best efforts to satisfy any
requirements for an available exemption from registration and qualification.
8. Issuance of Certificates. As soon as practicable following the
exercise of any Options, Questor and QSS shall use their reasonable best efforts
to cause the Company to issue a stock certificate in the Participant's name to
the Participant evidencing the appropriate number of shares of Common Stock
issued in connection with such exercise. In the event the issuance of Common
Stock upon the exercise of such Options is not registered under the Securities
Act, then the stock certificates issued pursuant to this Section 8 shall bear an
appropriate legend regarding Securities Act restrictions on resale.
9. Representations. The Participant represents that this
Agreement has been duly executed and delivered by the Participant and
constitutes a legal, valid and binding agreement of the Participant, enforceable
against the Participant in accordance with its terms.
Page 21 of 33
<PAGE>
4
10. Notices. All notices and other communications provided for
herein shall be in writing and shall be delivered by hand or sent by certified
or registered mail, return receipt requested, postage prepaid, addressed, if to
the Participant, to his or her attention at the mailing address set forth at the
foot of this Agreement (or to such other address as the Participant shall have
specified to the Company in writing) and, if to Questor or QSS, to 103 Springer
Building, 3411 Silverside Road, Wilmington, DE 19810, with copies to Edward L.
Scarff, 601 California Street, Suite 1450, San Francisco, California 94108. All
such notices shall be conclusively deemed to be received and shall be effective,
if sent by hand delivery, upon receipt, or if sent by registered or certified
mail, on the fifth day after the day on which such notice is mailed.
11. No Waiver. The waiver by any party of compliance with any
provision of this Agreement by the other parties shall not operate or be
construed as a waiver of any other provision of this Agreement, or of any
subsequent breach by such party of a provision of this Agreement.
12. Miscellaneous. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same agreement. The headings
of sections and subsections herein are included solely for convenience of
reference and shall not affect the meaning of any of the provisions of this
Agreement. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware.
Page 22 of 33
<PAGE>
5
IN WITNESS WHEREOF, Questor and QSS have caused this Agreement to
be executed by two of its duly authorized officers and the Participant has
executed this Agreement, all as of the Effective Date.
QUESTOR PARTNERS FUND, L.P.
By: Questor General Partner, L.P.
its general partner
By: Questor Principals, Inc.
its general partner
By:
---------------------------
Edward Scarff
Principal
QUESTOR SIDE-BY-SIDE PARTNERS, L.P.
By: Questor Principals, Inc.
its general partner
By:
---------------------------
Edward Scarff
Principal
ROBERT M. STEMMLER
------------------------------
[Address]
OPTIONS
Number Granted by Questor: [106,229]
Number Granted by QSS: [7,629]
Option Price: U.S.$13.75
Page 23 of 33
EXECUTION COPY
NONQUALIFIED OPTION AGREEMENT
NONQUALIFIED OPTION AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this "Agreement"), dated as of June 5,
1998, (the "Effective Date") among QUESTOR PARTNERS FUND, L.P., a limited
partnership organized and existing under the laws of the State of Delaware
("Questor"), QUESTOR SIDE-BY-SIDE PARTNERS, L.P., a limited partnership
organized and existing under the laws of the State of Delaware ("QSS"), and the
other party signatory hereto (the "Participant");
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to a Stock Purchase Agreement dated as of May
6, 1998 (the "Stock Purchase Agreement"), Questor and QSS have agreed to acquire
an aggregate of (i) 1,419,962 shares of common stock, par value $0.001 per share
(the "Common Stock"), of IMPCO Technologies, Inc., a Delaware corporation (the
"Company") and (ii) 3,250 shares of preferred stock, par value $0.001 per share
(the "Preferred Stock") of the Company, which are currently convertible into an
aggregate of at least 613,207 shares of Common Stock; and
WHEREAS, the Participant is currently an officer and a key
employee of the Company or its subsidiaries and, upon the terms and subject to
the conditions hereinafter set forth, Questor and QSS desire to provide the
Participant with an incentive to remain in the Company's employ and to increase
his interest in the success of the Company through the granting to the
Participant of nonqualified stock options (the "Options") to purchase shares of
Common Stock;
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements herein contained, the parties hereto hereby agree as
follows:
1. Grant of Options. Subject to the terms and conditions
contained herein and the completion of the transactions contemplated by the
Stock Purchase Agreement, each of Questor and QSS hereby grants to the
Participant, effective as of completion of the transactions contemplated by the
Stock Purchase Agreement, the number of Options specified on the signature page
hereof. Each such Option shall entitle the Participant to purchase from Questor
or QSS, as the case may be, upon payment of the relevant exercise price
specified on the signature page hereof (the "Option Price"), one share of Common
Stock.
2. Vesting and Exercisability of Options. Twenty-five percent of
the Options will vest on June 30, 1999 and thereafter on each of the next three
anniversaries of such date. The Options will become exercisable only after the
Preferred Stock purchased by Questor and QSS pursuant to the Stock Purchase
Agreement is converted (or is convertible at
Page 24 of 33
<PAGE>
2
the option of Questor and QSS) into the number of shares of Common Stock
specified in the Stock Purchase Agreement and will become exercisable only upon
the earlier of (i) five years after the date of this Agreement and (ii) the sale
by Questor and QSS of 50% or more of the shares of Common Stock owned by them as
of the Effective Date (including the number of shares of Common Stock into which
shares of Preferred Stock owned by them as of the Effective Date could be
converted) to a person or entity unaffiliated with Questor (an "Exercise
Event"). Questor and QSS shall provide prompt notice (the "Exercise Event
Notice") to the Participant after the occurrence of an Exercise Event or the
signing of an agreement with respect to the occurrence of an Exercise Event. If
an Exercise Event Notice is given before June 30, 2002 and at a time when
options would otherwise continue to vest pursuant to Section 3, all of the
Options will be fully vested as of the date of the Exercise Event. Within one
week after receipt of such notice, the Participant shall notify Questor or QSS
of its irrevocable election to exercise or not to exercise his option. The
closing of an option exercise in connection with an Exercise Event shall occur
on or prior to the later of the effective date of an Exercise Event or 60 days
after receipt of the Exercise Event Notice. Any Options for which notice of
irrevocable exercise is not given within one week of actual receipt by the
Participant of the Exercise Event Notice as described above shall be
automatically forfeited. To the extent exercised by a Participant, Options
granted to Participant by each of Questor and QSS must be exercised concurrently
on a pro rata basis.
3. Expiration of Options. The Options shall not be exercisable
following December 31, 2003 (the "Expiration Date"). Following termination of
the Participant's full time employment with the Company, the Options, to the
extent then vested (the "Vested Options"), may be exercised as provided
hereunder until the Expiration Date. Any Option which is not a Vested Option as
of the date of the Participant's termination of full-time employment with the
Company shall terminate as of such date and be of no further force and effect;
provided, however, that if such employment is terminated as a result of the
death or disability of a Participant, the options will continue to vest in
accordance with their terms.
4. Restrictions on Transfer of Options. None of the Options may
be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of,
except by testamentary devise or the laws of descent and distribution; provided,
however, that the Participant may transfer vested options for tax planning
purposes to members of his immediate family or to a trust for the benefit of him
and his immediate family. The Options shall be exercisable only by the
Participant or permitted transferees during the Participant's lifetime. Options
that are vested at the time of the Participant's death (or that vest subsequent
to the Participant's death in accordance with Section 3) may be exercised in
accordance with their terms by the Participant's estate.
Page 25 of 33
<PAGE>
3
5. Manner of Exercise. Except as otherwise provided in this
Agreement, the Participant may exercise any or all of the Options that have
vested hereunder, by giving a properly executed written notice to Questor and
QSS. The Participant shall pay the Option Price in full at the time the written
notice of exercise is given to Questor and QSS (or, in the case of an option
exercise in connection with an Exercise Event, within the time periods provided
in Section 2). Such payment shall be in cash, bank certified or cashier's check
or personal check (unless at the time of exercise Questor and QSS in a
particular case determines not to accept a personal check) for the Common Stock
being purchased.
6. Shareholder Rights. The Participant shall have no rights as a
shareholder with respect to any shares of Common Stock issuable upon exercise of
the Options until a certificate or certificates evidencing such shares shall
have been issued to the Participant, and no adjustment shall be made for
dividends or distributions or other rights in respect of any share for which the
record date is prior to the date upon which the Participant shall become the
holder of record thereof.
7. Securities Law Restrictions on Exercise. The Options shall not
be exercisable unless either the Common Stock subject to the Options has been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and qualified under applicable state "blue sky" laws in connection with the
offer and sale thereof, or Questor and QSS determines that such registration and
qualification is not required as a result of the availability of an exemption
from registration under such laws. Subject to the Participant providing Questor
and QSS with an investment representation reasonably satisfactory to Questor and
QSS, Questor and QSS shall use their reasonable best efforts to satisfy any
requirements for an available exemption from registration and qualification.
8. Issuance of Certificates. As soon as practicable following the
exercise of any Options, Questor and QSS shall use their reasonable best efforts
to cause the Company to issue a stock certificate in the Participant's name to
the Participant evidencing the appropriate number of shares of Common Stock
issued in connection with such exercise. In the event the issuance of Common
Stock upon the exercise of such Options is not registered under the Securities
Act, then the stock certificates issued pursuant to this Section 8 shall bear an
appropriate legend regarding Securities Act restrictions on resale.
9. Representations. The Participant represents that this
Agreement has been duly executed and delivered by the Participant and
constitutes a legal, valid and binding agreement of the Participant, enforceable
against the Participant in accordance with its terms.
Page 26 of 33
<PAGE>
4
10. Notices. All notices and other communications provided for
herein shall be in writing and shall be delivered by hand or sent by certified
or registered mail, return receipt requested, postage prepaid, addressed, if to
the Participant, to his or her attention at the mailing address set forth at the
foot of this Agreement (or to such other address as the Participant shall have
specified to the Company in writing) and, if to Questor or QSS, to 103 Springer
Building, 3411 Silverside Road, Wilmington, DE 19810, with copies to Edward L.
Scarff, 601 California Street, Suite 1450, San Francisco, California 94108. All
such notices shall be conclusively deemed to be received and shall be effective,
if sent by hand delivery, upon receipt, or if sent by registered or certified
mail, on the fifth day after the day on which such notice is mailed.
11. No Waiver. The waiver by any party of compliance with any
provision of this Agreement by the other parties shall not operate or be
construed as a waiver of any other provision of this Agreement, or of any
subsequent breach by such party of a provision of this Agreement.
12. Miscellaneous. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same agreement. The headings
of sections and subsections herein are included solely for convenience of
reference and shall not affect the meaning of any of the provisions of this
Agreement. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware.
Page 27 of 33
<PAGE>
5
IN WITNESS WHEREOF, Questor and QSS have caused this Agreement to
be executed by two of its duly authorized officers and the Participant has
executed this Agreement, all as of the Effective Date.
QUESTOR PARTNERS FUND, L.P.
By: Questor General Partner, L.P.
its general partner
By: Questor Principals, Inc.
its general partner
By:
---------------------------
Edward Scarff
Principal
QUESTOR SIDE-BY-SIDE PARTNERS, L.P.
By: Questor Principals, Inc.
its general partner
By:
---------------------------
Edward Scarff
Principal
SYED HUSSAIN
------------------------------
[Address]
OPTIONS
Number Granted by Questor: [106,229]
Number Granted by QSS: [7,629]
Option Price: U.S.$13.75
Page 28 of 33
EXECUTION COPY
NONQUALIFIED OPTION AGREEMENT
NONQUALIFIED OPTION AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this "Agreement"), dated as of June 5,
1998, (the "Effective Date") among QUESTOR PARTNERS FUND, L.P., a limited
partnership organized and existing under the laws of the State of Delaware
("Questor"), QUESTOR SIDE-BY-SIDE PARTNERS, L.P., a limited partnership
organized and existing under the laws of the State of Delaware ("QSS"), and the
other party signatory hereto (the "Participant");
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to a Stock Purchase Agreement dated as of May
6, 1998 (the "Stock Purchase Agreement"), Questor and QSS have agreed to acquire
an aggregate of (i) 1,419,962 shares of common stock, par value $0.001 per share
(the "Common Stock"), of IMPCO Technologies, Inc., a Delaware corporation (the
"Company") and (ii) 3,250 shares of preferred stock, par value $0.001 per share
(the "Preferred Stock") of the Company, which are currently convertible into an
aggregate of at least 613,207 shares of Common Stock; and
WHEREAS, the Participant is currently an officer and a key
employee of the Company or its subsidiaries and, upon the terms and subject to
the conditions hereinafter set forth, Questor and QSS desire to provide the
Participant with an incentive to remain in the Company's employ and to increase
his interest in the success of the Company through the granting to the
Participant of nonqualified stock options (the "Options") to purchase shares of
Common Stock;
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements herein contained, the parties hereto hereby agree as
follows:
1. Grant of Options. Subject to the terms and conditions
contained herein and the completion of the transactions contemplated by the
Stock Purchase Agreement, each of Questor and QSS hereby grants to the
Participant, effective as of completion of the transactions contemplated by the
Stock Purchase Agreement, the number of Options specified on the signature page
hereof. Each such Option shall entitle the Participant to purchase from Questor
or QSS, as the case may be, upon payment of the relevant exercise price
specified on the signature page hereof (the "Option Price"), one share of Common
Stock.
2. Vesting and Exercisability of Options. Twenty-five percent of
the Options will vest on June 30, 1999 and thereafter on each of the next three
anniversaries of such date. The Options will become exercisable only after the
Preferred Stock purchased by Questor and QSS pursuant to the Stock Purchase
Agreement is converted (or is convertible at
Page 29 of 33
<PAGE>
2
the option of Questor and QSS) into the number of shares of Common Stock
specified in the Stock Purchase Agreement and will become exercisable only upon
the earlier of (i) five years after the date of this Agreement and (ii) the sale
by Questor and QSS of 50% or more of the shares of Common Stock owned by them as
of the Effective Date (including the number of shares of Common Stock into which
shares of Preferred Stock owned by them as of the Effective Date could be
converted) to a person or entity unaffiliated with Questor (an "Exercise
Event"). Questor and QSS shall provide prompt notice (the "Exercise Event
Notice") to the Participant after the occurrence of an Exercise Event or the
signing of an agreement with respect to the occurrence of an Exercise Event. If
an Exercise Event Notice is given before June 30, 2002 and at a time when
options would otherwise continue to vest pursuant to Section 3, all of the
Options will be fully vested as of the date of the Exercise Event. Within one
week after receipt of such notice, the Participant shall notify Questor or QSS
of its irrevocable election to exercise or not to exercise his option. The
closing of an option exercise in connection with an Exercise Event shall occur
on or prior to the later of the effective date of an Exercise Event or 60 days
after receipt of the Exercise Event Notice. Any Options for which notice of
irrevocable exercise is not given within one week of actual receipt by the
Participant of the Exercise Event Notice as described above shall be
automatically forfeited. To the extent exercised by a Participant, Options
granted to Participant by each of Questor and QSS must be exercised concurrently
on a pro rata basis.
3. Expiration of Options. The Options shall not be exercisable
following December 31, 2003 (the "Expiration Date"). Following termination of
the Participant's full time employment with the Company, the Options, to the
extent then vested (the "Vested Options"), may be exercised as provided
hereunder until the Expiration Date. Any Option which is not a Vested Option as
of the date of the Participant's termination of full-time employment with the
Company shall terminate as of such date and be of no further force and effect;
provided, however, that if such employment is terminated as a result of the
death or disability of a Participant, the options will continue to vest in
accordance with their terms.
4. Restrictions on Transfer of Options. None of the Options may
be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of,
except by testamentary devise or the laws of descent and distribution; provided,
however, that the Participant may transfer vested options for tax planning
purposes to members of his immediate family or to a trust for the benefit of him
and his immediate family. The Options shall be exercisable only by the
Participant or permitted transferees during the Participant's lifetime. Options
that are vested at the time of the Participant's death (or that vest subsequent
to the Participant's death in accordance with Section 3) may be exercised in
accordance with their terms by the Participant's estate.
Page 30 of 33
<PAGE>
3
5. Manner of Exercise. Except as otherwise provided in this
Agreement, the Participant may exercise any or all of the Options that have
vested hereunder, by giving a properly executed written notice to Questor and
QSS. The Participant shall pay the Option Price in full at the time the written
notice of exercise is given to Questor and QSS (or, in the case of an option
exercise in connection with an Exercise Event, within the time periods provided
in Section 2). Such payment shall be in cash, bank certified or cashier's check
or personal check (unless at the time of exercise Questor and QSS in a
particular case determines not to accept a personal check) for the Common Stock
being purchased.
6. Shareholder Rights. The Participant shall have no rights as a
shareholder with respect to any shares of Common Stock issuable upon exercise of
the Options until a certificate or certificates evidencing such shares shall
have been issued to the Participant, and no adjustment shall be made for
dividends or distributions or other rights in respect of any share for which the
record date is prior to the date upon which the Participant shall become the
holder of record thereof.
7. Securities Law Restrictions on Exercise. The Options shall not
be exercisable unless either the Common Stock subject to the Options has been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and qualified under applicable state "blue sky" laws in connection with the
offer and sale thereof, or Questor and QSS determines that such registration and
qualification is not required as a result of the availability of an exemption
from registration under such laws. Subject to the Participant providing Questor
and QSS with an investment representation reasonably satisfactory to Questor and
QSS, Questor and QSS shall use their reasonable best efforts to satisfy any
requirements for an available exemption from registration and qualification.
8. Issuance of Certificates. As soon as practicable following the
exercise of any Options, Questor and QSS shall use their reasonable best efforts
to cause the Company to issue a stock certificate in the Participant's name to
the Participant evidencing the appropriate number of shares of Common Stock
issued in connection with such exercise. In the event the issuance of Common
Stock upon the exercise of such Options is not registered under the Securities
Act, then the stock certificates issued pursuant to this Section 8 shall bear an
appropriate legend regarding Securities Act restrictions on resale.
9. Representations. The Participant represents that this
Agreement has been duly executed and delivered by the Participant and
constitutes a legal, valid and binding agreement of the Participant, enforceable
against the Participant in accordance with its terms.
Page 31 of 33
<PAGE>
4
10. Notices. All notices and other communications provided for
herein shall be in writing and shall be delivered by hand or sent by certified
or registered mail, return receipt requested, postage prepaid, addressed, if to
the Participant, to his or her attention at the mailing address set forth at the
foot of this Agreement (or to such other address as the Participant shall have
specified to the Company in writing) and, if to Questor or QSS, to 103 Springer
Building, 3411 Silverside Road, Wilmington, DE 19810, with copies to Edward L.
Scarff, 601 California Street, Suite 1450, San Francisco, California 94108. All
such notices shall be conclusively deemed to be received and shall be effective,
if sent by hand delivery, upon receipt, or if sent by registered or certified
mail, on the fifth day after the day on which such notice is mailed.
11. No Waiver. The waiver by any party of compliance with any
provision of this Agreement by the other parties shall not operate or be
construed as a waiver of any other provision of this Agreement, or of any
subsequent breach by such party of a provision of this Agreement.
12. Miscellaneous. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same agreement. The headings
of sections and subsections herein are included solely for convenience of
reference and shall not affect the meaning of any of the provisions of this
Agreement. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware.
Page 32 of 33
<PAGE>
5
IN WITNESS WHEREOF, Questor and QSS have caused this Agreement to
be executed by two of its duly authorized officers and the Participant has
executed this Agreement, all as of the Effective Date.
QUESTOR PARTNERS FUND, L.P.
By: Questor General Partner, L.P.
its general partner
By: Questor Principals, Inc.
its general partner
By:
---------------------------
Edward Scarff
Principal
QUESTOR SIDE-BY-SIDE PARTNERS, L.P.
By: Questor Principals, Inc.
its general partner
By:
---------------------------
Edward Scarff
Principal
DALE L. RASMUSSEN
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[Address]
OPTIONS
Number Granted by Questor: [53,114]
Number Granted by QSS: [3,814]
Option Price: U.S.$13.75
Page 33 of 33
