<PAGE>
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
AMPHENOL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
DELAWARE 22-2785165
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Identification Number)
Organization)
</TABLE>
358 HALL AVENUE
WALLINGFORD, CONNECTICUT 06492
(Address of Principal Executive Office)
1997 OPTION PLAN
FOR KEY EMPLOYEES OF
AMPHENOL CORPORATION AND SUBSIDIARIES
(Full Title of the Plan)
------------------------------
EDWARD C. WETMORE
GENERAL COUNSEL AND SECRETARY
AMPHENOL CORPORATION
358 HALL AVENUE
WALLINGFORD, CONNECTICUT 06492
(203) 265-8900
(Name, Address and Telephone Number, Including Area Code, of Agent for Service)
------------------------------
WITH COPIES TO:
CHARLES I. COGUT, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017-3954
(212) 455-2000
------------------------
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TO BE OFFERING PRICE AGGREGATE REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED REGISTERED PER SHARE (a) OFFERING PRICE (a) FEE (a)
<S> <C> <C> <C> <C>
Common Stock, $.001 par value per share 1,200,000 $26.00 $31,200,000 $9,454.55
</TABLE>
(a) Pursuant to Rule 457(h) under the Securities Act of 1933, the proposed
maximum offering price per share, the proposed maximum aggregate offering
price and the amount of registration fee have been computed on the basis of
the price at which common stock under the Plan will be sold, and the price
at which options under the Plan may be exercised.
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- --------------------------------------------------------------------------------
<PAGE>
ITEM 1. PLAN INFORMATION
Not required to be filed with this Registration Statement.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
Not required to be filed with this Registration Statement.
2
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by Amphenol Corporation (the "Company" or the
"Registrant") (File No. 1-10879) with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), are hereby incorporated by reference in this Registration
Statement:
(a) The Company's Annual Report on Form 10-K for the year ended December
31, 1996, as amended by Amendment No. 1 thereto on Form 10-K/A.
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997.
(c) The Company's Current Reports on Form 8-K dated January 23, 1997,
May 9, 1997 and June 20, 1997.
(d) The Company's Registration Statement on Form S-4 dated April 15,
1997.
(e) The Company's Registration Statement on Form S-3 dated April 29,
1997.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
after the date of this Registration Statement and prior to the filing of a
post-effective amendment to this Registration Statement indicating that all
securities offered have been sold or which de-registers all securities then
remaining unsold, shall be deemed to be incorporated by reference into this
Registration Statement and to be part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES
The following description of the terms of the Common Stock is qualified in
its entirety by reference to the provisions in the Management Stockholder's
Agreement, filed as part of this Registration Statement as Exhibit 4.4.
Under the Amended and Restated Certificate of Incorporation, the Company is
authorized to issue 40 million shares of Common Stock and no other shares common
stock or preferred stock. As of September 1, 1997, there were approximately 17.5
million shares of Common Stock issued and outstanding. The following is a
summary of certain of the rights and privileges pertaining to Common Stock. For
a full description of Common Stock, reference is made to the Company's Amended
and Restated Certificate of Incorporation, incorporated by reference into this
Registration Statement as Exhibit 4.1 and to the Company's By-Laws, incorporated
by reference into this Registration Statement as Exhibit 4.2.
VOTING RIGHTS. Holders of Common Stock are entitled to one vote per share
on all matters submitted to a vote of stockholders. Approval of matters brought
before the stockholders requires the affirmative vote of a majority of shares
present and voting, except as otherwise required by law and except that the vote
of 80% or more of outstanding shares entitled to vote is required to modify the
provisions of the Amended and Restated Certificate of Incorporation relating to
the election of directors for staggered terms, the total number of directors and
independent directors, removal of directors, and the provision
II-1
<PAGE>
requiring an 80% stockholder vote for certain actions. Director nominations may
be made by stockholders in accordance with the Company's By-Laws, as amended,
not less than 90 days in advance of the meeting at which the election is to
occur.
DIVIDEND RIGHTS. Holders of Common Stock are entitled to participate in
dividends as and when declared by the Board of Directors of the Company out of
funds legally available therefor. The Company's ability to pay cash dividends is
subject to certain restrictions.
LIQUIDATION RIGHTS. Subject to the rights of creditors and holders of
preferred stock, any holders of Common Stock are entitled to share ratably in a
distribution of assets of the Company upon any liquidation, dissolution or
winding-up of the Company.
DIRECTORS. The directors of the Company serve in three different classes of
approximately equal numbers, and the term of only one class expires at each
annual meeting. Before the expiration of their terms, directors of the Company
may be removed by the affirmative vote of the majority of the stockholders
entitled to vote for the election of directors but only for cause.
OTHER MATTERS. The Common Stock is subject to significant restrictions on
disposition pursuant to the provisions of the Option Plan, the Management
Stockholder's Agreement and the Stock Option Agreement, filed as part of this
Registration Statement as Exhibits 4.3, 4.4 and 4.5, respectively.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Certain legal matters in connection with the Common Stock offered hereby are
being passed upon for the Company by Edward C. Wetmore, Esq.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL") provides
for, among other things: (a) permissive indemnification for expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by designated persons, including directors and officers of a
corporation, in the event such persons are parties to litigation other than
stockholder derivative actions if certain conditions are met; (b) permissive
indemnification for expenses (including attorneys' fees) actually and reasonably
incurred by designated persons, including directors and officers of a
corporation, in the event such persons are parties to stockholder derivative
actions if certain conditions are met; (c) mandatory indemnification for
expenses (including attorneys' fees) actually and reasonably incurred by
designated persons, including directors and officers of a corporation, in the
event such persons are successful on the merits or otherwise in defense of
litigation covered by (a) and (b) above; and (d) that the indemnification
provided for by Section 145 is not deemed exclusive of any other rights which
may be provided under any by-law, agreement, stockholder or disinterested
director vote, or otherwise.
Article Seventh of Amphenol's Restated Certificate of Incorporation provides
that, except as otherwise provided by the DGCL as the same exists or may
hereafter be amended, no director of the Corporation shall be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. In addition, Article Eighth authorizes Amphenol to
indemnify any person entitled to be indemnified under law to the fullest extent
permitted by the DGCL.
Article IV, Section 8 of Amphenol's By-laws authorizes the Company to
purchase and maintain insurance for its directors and officers against any
liability asserted against them in their respective capacities. In addition, the
By-laws provide that expenses incurred by any director or officer in defending
any action may be paid by the Company in advance of the final disposition of
such action as determined by the Board of Directors.
The Company maintains officers' and directors' insurance covering certain
liabilities that may be incurred by officers and directors in the performance of
their duties.
II-2
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable
ITEM 8. EXHIBITS
The following exhibits are filed as part of this Registration Statement:
4.1 Amended and Restated Certificate of Incorporation of the Company
(filed as Exhibit 3.1 to
the Form S-4 Registration Statement and incorporated herein by
reference).
4.2 By-laws of the Company.
4.3 1997 Option Plan for Key Employees of Amphenol Corporation and
Subsidiaries
4.4 Form of Management Stockholder's Agreement
4.5 Form of Non-Qualified Stock Option Agreement
4.6 Form of Sale Participation Agreement
4.7 Registration Rights Agreement, dated as of May 19, 1997, among NXS
Acquisition Corp.,
KKR 1996 Fund L.P., NXS Associates L.P., KKR Partners II, L.P. and NXS
I, L.L.C.
5.1 Opinion of Edward C. Wetmore, Esq.
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Edward C. Wetmore, Esq. (included in Exhibit 5.1 of this
Registration Statement)
24.1 Power of Attorney (included in Part II of this Registration Statement)
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement;
(i) to include any prospectus required by Section 10(a)(3) of the Act;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement.
(2) That, for the purposes of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
II-3
<PAGE>
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) That, for purposes of determining any liability under the Act, each
filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of
the Exchange Act that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wallingford, State of Connecticut, on the 18th day of
September 1997.
AMPHENOL CORPORATION
BY /S/ MARTIN H. LOEFFLER
-----------------------------------------
Martin H. Loeffler
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on the 18th day of September 1997 by the
following persons in the capacities indicated:
POWER OF ATTORNEY
We, the undersigned directors and officers of Amphenol Corporation, do
hereby constitute and appoint Martin H. Loeffler, Edward G. Jepsen and Edward C.
Wetmore, or either of them, our true and lawful attorneys and agents, to do any
and all acts and things in our name and on our behalf in our capacities as
directors and officers and to execute any and all instruments for us and in our
names in the capacities indicated below, which said attorneys and agents, or
either of them, may deem necessary or advisable to enable said Corporation to
comply with the Securities Act of 1933 and any rules, regulations and
requirements of the Securities and Exchange Commission, in connection with this
Registration Statement, including specifically, but without limitation, power
and authority to sign for us or any of us in our names in the capacities
indicated below, any and all amendments (including post-effective amendments)
hereto and we do hereby ratify and confirm all that said attorneys and agents,
or either of them, shall do or cause to be done by virtue hereof.
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
/s/ MARTIN H. LOEFFLER Chairman of the Board of
---------------------------- Directors, President and September 18, 1997
Martin H. Loeffler Chief Executive Officer
Executive Vice President
/s/ EDWARD G. JEPSEN and Chief Financial
---------------------------- Officer (Principal September 18, 1997
Edward G. Jepsen Financial and Accounting
Officer)
/s/ HENRY R. KRAVIS Director
---------------------------- September 18, 1997
Henry R. Kravis
/s/ GEORGE R. ROBERTS Director
---------------------------- September 18, 1997
George R. Roberts
II-5
<PAGE>
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
/s/ MICHAEL W. MICHELSON Director
---------------------------- September 18, 1997
Michael W. Michelson
/s/ MARC S. LIPSCHULTZ Director
---------------------------- September 18, 1997
Marc S. Lipschultz
/s/ ANDREW M. CLARKSON Director
---------------------------- September 18, 1997
Andrew M. Clarkson
/s/ G. ROBERT DURHAM Director
---------------------------- September 18, 1997
G. Robert Durham
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- --------------------------------------------------------------------------------------------------------
<C> <S>
4.1 Amended and Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Form S-4
Registration Statement and incorporated herein by reference).
4.2 By-Laws of the Company (filed as Exhibit 3.2 to the 1997 10-Q dated June 30, 1997).
4.3 1997 Option Plan for Key Employees of Amphenol Corporation and Subsidiaries (filed as Exhibit 10.16 to
the 1997 10-Q dated June 30, 1997).
4.4 Form of Management Stockholder's Agreement
4.5 Form of Non-Qualified Stock Option Agreement
4.6 Form of Sale Participation Agreement
4.7 Registration Rights Agreement, dated as of May 19, 1997, among NXS Acquisition Corp., KKR 1996 Fund
L.P., NXS Associates L.P., KKR Partners II, L.P. and NXS I, L.L.C. (filed as Exhibit 99.5 to Schedule
13D, Amendment No.1, relating to the beneficial ownership of shares of the Company's Common Stock by NXS
I, L.L.C., KKR 1996 Fund, L.P., KKR Associates (1996) L.P., KKR 1996 GP LLC, KKR Partners II, L.P., KKR
Associates L.P., NXS Associates L.P., KKR Associates (NXS) L.P., and KKR-NXS L.L.C. dated May 27, 1997)
5.1 Opinion of Edward C. Wetmore, Esq.
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Edward C. Wetmore, Esq. (included in Exhibit 5.1 of this Registration Statement)
24.1 Power of Attorney (included in Part II of this Registration Statement)
</TABLE>
<PAGE>
Exhibit 4.4
MANAGEMENT STOCKHOLDER'S AGREEMENT
This Management Stockholder's Agreement (this "Agreement") is entered
into as of May 19, 1997 between Amphenol Corporation, a Delaware Corporation
(the "Company"), and __________________ (the "Management Stockholder") (the
Company and the Management Stockholder being hereinafter collectively referred
to as the "Parties").
On January 23, 1997, NXS Acquisition Corp., a Delaware corporation
("Newco"), and the Company entered into an Agreement and Plan of Merger (the
"Merger Agreement") pursuant to which Newco is to be merged with and into the
Company (the "Merger"). Pursuant to the Merger, stockholders of the Company may
elect to receive $26.00 per share in cash or to retain the Company's Class A
Common Stock, par value $.001 per share (the "Common Stock"), in each case,
subject to the effects of proration. In connection with the Merger, certain key
employees of the Company have agreed to retain and/or to purchase a specified
number of shares of Common Stock (such specified number of shares, the "Targeted
Retained Number").
This Agreement is one of several other agreements ("Other Management
Stockholders' Agreements") which have been, or which in the future will be,
entered into between the Company and other individuals who are or will be key
employees of the Company or one of its subsidiaries (collectively, the "Other
Management Stockholders").
Schedule I hereto sets forth, for the Management Stockholder named
above, the Targeted Retained Number, the number of shares, if any, actually
retained in the Merger after giving effect to proration (the "Actual Retained
Number") (any shares retained and subject to this Agreement are herein referred
to as "Retained Stock"), the number of shares, if any, purchased by the
Management Stockholder (the "Purchase Stock") and, if the number of shares of
Purchase Stock is greater than zero, whether such shares are to be sold to the
Management Stockholder by the Company (any such shares referred to herein as
"Issued Stock") or purchased by the Management Stockholder on the New York Stock
Exchange (any such shares referred to herein as "Market Stock"). After giving
effect to the foregoing, the Management Stockholder shall own, in the aggregate,
a total number of shares of Common Stock equal to at least the Targeted Retained
Number. In addition, the Company will grant to the Management Stockholder at or
as soon as practicable after the effective time of the Merger an option or
options to purchase Common Stock ("Options") at an exercise price of $26.00 per
share of Common Stock pursuant to the terms of the 1997 Option Plan for Key
Employees of Amphenol Corporation and Subsidiaries (the "Option Plan") and the
"Non-Qualified Stock Option Agreement" attached hereto as Exhibit A.
NOW THEREFORE, to implement the foregoing and in consideration of the
grant of Options and of the mutual agreements contained herein, the Parties
agree as follows:
<PAGE>
1. Common Stock; Issuance of Options.
(a) If the Actual Retained Number set forth on Schedule I hereto is
greater than the Targeted Retained Number, then the Management Stockholder
shall, after the Stockholders Meeting (as defined in the Merger Agreement),
be permitted to sell a number of shares equal to the difference. Subject
to the terms and conditions hereinafter set forth, if the number of shares
of Issued Stock set forth on Schedule I hereto is greater than zero, then
the Management Stockholder hereby subscribes for and shall purchase, and
the Company shall sell to the Management Stockholder, such number of shares
of Issued Stock at a purchase price per share of $26.00 (for purposes
hereof, such price shall be referred to as the "Base Price") on the date of
the Effective Time of the Merger (as defined in the Merger Agreement) (the
"Base Date") or, if not on the Base Date, on such later date after the
Effective Time of the Merger as may be determined by the Company in
consultation with the Management Stockholder (the "Deferred Sale Date").
The Company shall have no obligation to sell any Issued Stock to any person
who (i) is a resident or citizen of a state or other jurisdiction in which
the sale of the Issued Stock to him or her would constitute a violation of
the securities or "blue sky" laws of such jurisdiction or (ii) is not an
employee of the Company or any of its subsidiaries on the date hereof. If
the number of shares of Market Stock set forth on Schedule I hereto is
greater than zero, then the Management Stockholder shall promptly after the
date of the Stockholders Meeting purchase such number of shares of Market
Stock on The New York Stock Exchange.
(b) The aggregate price for the Issued Stock shall be the amount set
forth in Schedule I hereto (such amount hereinafter sometimes referred to
as the "Aggregate Purchase Price"). The Aggregate Purchase Price shall be
paid in the following manner: the Management Stockholder shall deliver to
the Company at least three business days prior to the Base Date (or the
Deferred Sale Date, if applicable) cash or a certified bank check or checks
payable to the order of the Company in the amount of the Aggregate Purchase
Price. On the Base Date (or the Deferred Sale Date, if applicable), in
consideration of receipt of the Aggregate Purchase Price, the Company will
deliver to the Management Stockholder a certificate, registered in the
Management Stockholder's name, for the Issued Stock, which shall be subject
to the terms and conditions hereinafter set forth.
(c) Subject to the terms and conditions hereinafter set forth and upon
and as of May 19, 1997 (the "Option Grant Date"), the Company shall issue
to the Management Stockholder the Options and the Parties shall execute and
deliver to each other copies of the Non-Qualified Stock Option Agreement
concurrently with the issuance of the Options.
2. Management Stockholder's Representations, Warranties and
Agreements.
(a) The Management Stockholder agrees and acknowledges that he will
not, directly or indirectly, offer, transfer, sell, assign, pledge,
hypothecate or otherwise dispose of
2
<PAGE>
(any such act being referred to herein as a "transfer") any shares of the
Purchase Stock, Retained Stock and, at the time of exercise, the Common Stock
issuable upon exercise of the Options (the "Option Stock" and collectively
with Retained Stock and Purchase Stock, the "Stock") unless such transfer
complies with Section 3 of this Agreement. If the Management Stockholder is
an "affiliate" (as defined under Rule 405 of the rules and regulations
promulgated under the Act and as interpreted by the Board of Directors of the
Company) of the Company (an "Affiliate"), the Management Stockholder also
agrees and acknowledges that he will not transfer any shares of the Stock
unless (i) the transfer is pursuant to an effective registration statement
under the Securities Act of 1933, as amended, and the rules and regulations
in effect thereunder (the "Act"), and in compliance with applicable
provisions of state securities laws or (ii) (A) counsel for the Management
Stockholder (which counsel shall be reasonably acceptable to the Company)
shall have furnished the Company with an opinion, satisfactory in form and
substance to the Company, that no such registration is required because of
the availability of an exemption from registration under the Act and (B) if
the Management Stockholder is a citizen or resident of any country other than
the United States, or the Management Stockholder desires to effect any
transfer in any such country, counsel for the Management Stockholder (which
counsel shall be reasonably satisfactory to the Company) shall have furnished
the Company with an opinion or other advice reasonably satisfactory in form
and substance to the Company to the effect that such transfer will comply
with the securities laws of such jurisdiction. Notwithstanding the
foregoing, the Company acknowledges and agrees that any of the following
transfers are deemed to be in compliance with the Act and this Agreement and
no opinion of counsel is required in connection therewith: (x) a transfer
made pursuant to Section 4, 5 or 6 hereof, (y) a transfer upon the death of
the Management Stockholder to his executors, administrators, testamentary
trustees, legatees or beneficiaries (the "Management Stockholder's Estate")
or a transfer to the executors, administrators, testamentary trustees,
legatees or beneficiaries of a person who has become a holder of Stock in
accordance with the terms of this Agreement, provided that it is expressly
understood that any such transferee shall be bound by the provisions of this
Agreement and (z) a transfer made after the Base Date in compliance with the
federal securities laws to a trust or custodianship the beneficiaries of
which may include only the Management Stockholder, his spouse or his lineal
descendants (a "Management Stockholder's Trust") or a transfer made after the
third anniversary of the Base Date to such a trust by a person who has become
a holder of Stock in accordance with the terms of this Agreement, provided
that such transfer is made expressly subject to this Agreement and that the
transferee agrees in writing to be bound by the terms and conditions hereof.
(b) The certificate (or certificates) representing the Stock shall
bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS
SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION COMPLIES WITH THE PROVISIONS OF THE MANAGEMENT
STOCKHOLDER'S AGREEMENT DATED AS OF MAY 19, 1997 BETWEEN AMPHENOL
CORPORATION ("THE COMPANY") AND THE MANAGEMENT
3
<PAGE>
STOCKHOLDER NAMED ON THE FACE HEREOF (A COPY OF WHICH IS ON FILE WITH
THE SECRETARY OF THE COMPANY)."
(c) The Management Stockholder acknowledges that he has been advised
that (i) the Issued Stock (other than shares of Stock issued upon exercise of
Options), if any, has not been registered under the Act and may not be
transferred unless registered pursuant to an effective Registration Statement
under the Act or pursuant to a transaction that is exempt for the registration
requirements of such Act, (ii) a restrictive legend in the form heretofore set
forth shall be placed on the certificates representing the Stock and (iii) a
notation shall be made in the appropriate records of the Company indicating that
the Stock is subject to restrictions on transfer and appropriate stop transfer
restrictions will be issued to the Company's transfer agent with respect to the
Stock. If the Management Stockholder is an Affiliate, the Management
Stockholder also acknowledges that (1) the Stock must be held indefinitely and
the Management Stockholder must continue to bear the economic risk of the
investment in the Stock unless it is subsequently registered under the Act or an
exemption from such registration is available, (2) when and if shares of the
Stock may be disposed of without registration in reliance on Rule 144 of the
rules and regulations promulgated under the Act, such disposition can be made
only in limited amounts in accordance with the terms and conditions of such Rule
and (3) if the Rule 144 exemption is not available, public sale without
registration will require compliance with some other exemption under the Act.
(d) If any shares of the Stock are to be disposed of in accordance
with Rule 144 under the Act or otherwise, the Management Stockholder shall
promptly notify the Company of such intended disposition and shall deliver to
the Company at or prior to the time of such disposition such documentation as
the Company may reasonably request in connection with such sale and, in the case
of a disposition pursuant to Rule 144, shall deliver to the Company an executed
copy of any notice on Form 144 required to be filed with the Securities and
Exchange Commission (the "SEC").
(e) The Management Stockholder agrees that, if any shares of the
capital stock of the Company are offered to the public pursuant to an effective
registration statement under the Act (other than registration of securities
issued under an employee plan), the Management Stockholder will not effect any
public sale or distribution of any shares of the Stock not covered by such
registration statement from the time of the receipt of a notice from the Company
that the Company has filed or imminently intends to file such registration
statement to, or within 180 days after, the effective date of such registration
statement, unless otherwise agreed to in writing by the Company.
(f) The Management Stockholder represents and warrants that (i) with
respect to Issued Stock, if any, he has received and reviewed the document(s)
comprising the Prospectus (the "Prospectus") relating to Issued Stock, if any,
and the documents referred to therein, certain of which documents set forth the
rights, preferences and restrictions relating to the Stock and (ii) he has been
given the opportunity to obtain any additional information or documents and to
ask questions and receive answers about such documents, the Company and the
business and prospects of the Company which he deems necessary to evaluate the
merits
4
<PAGE>
and risks related to his investment in the Issued Stock, if any, and to
verify the information contained in the Prospectus and the information
received as indicated in this Section 2(f)(ii), and he has relied solely on
such information.
(g) The Management Stockholder further represents and warrants that
(i) his financial condition is such that he can afford to bear the economic risk
of holding the Issued Stock, if any, for an indefinite period of time and has
adequate means for providing for his current needs and personal contingencies,
(ii) he can afford to suffer a complete loss of his or her investment in the
Issued Stock, if any, (iii) he understands and has taken cognizance of all risk
factors related to the purchase of the Issued Stock, if any, including those set
forth in the Prospectus referred to above, and (iv) his knowledge and experience
in financial and business matters are such that he is capable of evaluating the
merits and risks of his purchase of the Issued Stock, if any, as contemplated by
this Agreement.
3. Restriction on Transfer.
Except for transfers permitted by clauses (x), (y) and (z) of Section
2(a) or a sale of shares of Stock pursuant to an effective registration
statement under the Act filed by the Company or pursuant to the Sale
Participation Agreement (as defined below), the Management Stockholder agrees
that he will not transfer any shares of the Stock at any time prior to the fifth
anniversary of the Base Date. No transfer of any such shares in violation
hereof shall be made or recorded on the books of the Company and any such
transfer shall be void and of no effect.
4. Right of First Refusal.
If on the fifth anniversary of the Base Date the Common Stock is not
admitted to trading on any national securities exchange or the NASDAQ Stock
Market, and, at any time after the fifth anniversary of the Base Date and prior
to a Public Offering (as hereinafter defined), the Management Stockholder
receives a bona fide offer to purchase any or all of his shares of Stock (the
"Offer") from a third party (the "Offeror") which the Management Stockholder
wishes to accept, the Management Stockholder shall cause the Offer to be reduced
to writing and shall notify the Company in writing of his wish to accept the
Offer. The Management Stockholder's notice shall contain an irrevocable offer
to sell such shares of Stock to the Company (in the manner set forth below) at a
purchase price equal to the price contained in, and on the same terms and
conditions of, the Offer, and shall be accompanied by a true copy of the Offer
(which shall identify the Offeror). At any time within 30 days after the date
of the receipt by the Company of the Management Stockholder's notice, the
Company shall have the right and option to purchase, or to arrange for a third
party to purchase, all of the shares of Stock covered by the Offer either (i) at
the same price and on the same terms and conditions as the Offer or (ii) if the
Offer includes any consideration other than cash, then at the sole option of the
Company, at the equivalent all cash price, determined in good faith by the
Company's Board of Directors, by delivering a certified bank check or checks in
the appropriate amount (and any such non-cash consideration to be paid) to the
Management Stockholder at the principal office of the Company against delivery
of certificates or other instruments representing the shares of Stock so
purchased, appropriately
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endorsed by the Management Stockholder. If at the end of such 30 day period,
the Company has not tendered the purchase price for such shares in the manner
set forth above, the Management Stockholder may during the succeeding 30 day
period sell not less than all of the shares of Stock covered by the Offer to
the Offeror at a price and on terms no less favorable to the Management
Stockholder than those contained in the Offer. Promptly after such sale, the
Management Stockholder shall notify the Company of the consummation thereof
and shall furnish such evidence of the completion and time of completion of
such sale and of the terms thereof as may reasonably be requested by the
Company. If, at the end of 30 days following the expiration of the 30 day
period for the Company to purchase the Stock, the Management Stockholder has
not completed the sale of such shares of the Stock as aforesaid, all the
restrictions on sale, transfer or assignment contained in this Agreement
shall again be in effect with respect to such shares of the Stock.
5. Management Stockholder's Resale of Stock and Options to the
Company Upon The Management Stockholder's Death or Disability or
in Case of Certain Terminations of Employment.
(a) Except as otherwise provided herein, if, prior to the fifth
anniversary of the Base Date, (i) the Management Stockholder is still in the
employ of the Company or any subsidiary of the Company, or has retired from the
Company and its subsidiaries at age 65 or over (or such other age as may be
approved by the Board of Directors of the Company) after having been employed by
the Company or any subsidiary for at least three years after the Base Date, and
(ii) the Management Stockholder either dies or becomes permanently disabled then
the Management Stockholder, the Management Stockholder's Estate or a Management
Stockholder's Trust, as the case may be, shall have the right, for six months
following the date of death or permanent disability, (A) to sell to the Company,
and the Company shall be required to purchase, on one occasion, all or any
portion of the shares of Stock then held by the Management Stockholder, the
Management Stockholder's Estate and/or the Management Stockholder's Trust, as
the case may be, at the Section 5(a) Repurchase Price, as determined in
accordance with Section 7, and (B) to require the Company to pay to the
Management Stockholder or the Management Stockholder's Estate or the Management
Stockholder's Trust, as the case may be, an additional amount equal to the
Option Excess Price determined on the basis of a Section 5(a) Repurchase Price
as provided in Section 8 with respect to the termination of outstanding Options
held by the Management Stockholder.
(b) [Intentionally omitted]
(c) The Management Stockholder, the Management Stockholder's Estate
and/or the Management Stockholder's Trust, as the case may be, shall send
written notice to the Company of its intention to sell shares of Stock in
exchange for the payment referred in Section 5(a) above and to terminate such
Options in exchange for the payment referred to in Section 5(a) (the "Redemption
Notice"). The completion of the purchase shall take place at the principal
office of the Company on the tenth business day after the giving of the
Redemption Notice. The applicable Repurchase Price and any payment with respect
to the Options as described above shall be paid by delivery to the Management
Stockholder, the Management Stockholder's Estate or the Management Stockholder's
Trust, as the case may
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be, of a certified bank check or checks in the appropriate amount payable to
the order of the Management Stockholder, the Management Stockholder's Estate
or the Management Stockholder's Trust, as the case may be, against delivery
of certificates or other instruments representing the Stock so purchased and
appropriate documents cancelling the Options so terminated appropriately
endorsed or executed by the Management Stockholder, the Management
Stockholder's Estate or the Management Stockholder's Trust, or his, her or
its duly authorized representative. For purposes of this Agreement, the
Management Stockholder shall be deemed to have a "permanent disability" if
the Management Stockholder is unable to engage in the activities required by
the Management Stockholder's job by reason of any medically determined
physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not
less than 12 months.
(d) Notwithstanding anything in Section 5(a) to the contrary and
subject to Section 11, if there exists and is continuing a default or an event
of default on the part of the Company or any subsidiary of the Company under any
loan, guarantee or other agreement under which the Company or any subsidiary of
the Company has borrowed money or if the repurchase referred to in Section 5(a)
would result in a default or an event of default on the part of the Company or
any subsidiary of the Company under any such agreement or if a repurchase would
not be permitted under the Delaware General Corporation Law (the "DGCL") or
would otherwise violate the DGCL (or if the Company reincorporates in another
state, the business corporation law of such state) (each such occurrence being
an "Event"), the Company shall not be obligated to repurchase any of the Stock
or the Options from the Management Stockholder, the Management Stockholder's
Estate or a Management Stockholder's Trust, as the case may be, until the first
business day which is 10 calendar days after all of the foregoing Events have
ceased to exist (the "Repurchase Eligibility Date"); provided, however, that (i)
the number of shares of Stock subject to repurchase under this Section 5(d)
shall be that number of shares of Stock, and (ii) in the case of a repurchase
pursuant to Section 5(a), the number of Exercisable Option Shares (as defined in
Section 8) for purposes of calculating the Option Excess Price payable under
this Section 5(d) shall be the number of Exercisable Option Shares, held by the
Management Stockholder, the Management Stockholder's Estate or a Management
Stockholder's Trust, as the case may be, at the time of delivery of a Redemption
Notice in accordance with Section 5(c) hereof; provided, further, that the
Repurchase Calculation Date shall be determined in accordance with Section 7 as
of the Repurchase Eligibility Date (unless, in a repurchase pursuant to Section
5(a), the Section 5(a) Repurchase Price would be greater if the Repurchase
Calculation Date had been determined as if no Event had occurred in which case,
solely for purposes of this proviso, the Repurchase Calculation Date shall be
determined as if no Event had occurred). All Options exercisable as of the date
of a Redemption Notice, in the case of a repurchase pursuant to Section 5(a),
shall continue to be exercisable until the repurchase pursuant to such
Redemption Notice, provided that to the extent any Options are exercised after
the date of such Redemption Notice, the number of Exercisable Option Shares for
purposes of calculating the Option Excess Price shall be reduced accordingly.
(e) Notwithstanding any other provision of this Section 5 to the
contrary and subject to Section 11, the Management Stockholder, the Management
Stockholder's
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Estate or a Management Stockholder's Trust, as the case may be, shall have
the right to withdraw any Redemption Notice which has been pending for 60 or
more days and which has remained unsatisfied because of the provisions of
Section 5(d).
6. The Company's Option to Repurchase Stock
and Options of Management Stockholder.
(a) If, on or prior to the fifth anniversary of the Base Date, (i)
the Management Stockholder's active employment with the Company (and/or, if
applicable, its subsidiaries) is terminated by the Company with Cause (as
hereinafter defined) or by the Management Stockholder without Good Reason (as
hereinafter defined), (ii) the beneficiaries of a Management Stockholder's Trust
shall include any person or entity other than the Management Stockholder, his
spouse or his lineal descendants, or (iii) the Management Stockholder shall
effect a transfer of any of the Stock other than as permitted in this Agreement
(each, a "Section 6(a) Call Event"), then the Company shall have the right to
purchase all, but not less than all, of the shares of the Stock then held by the
Management Stockholder or a Management Stockholder's Trust at the Section 6(a)
Repurchase Price determined in accordance with Section 7 hereof. If any Section
6(a) Call Event has occurred, then, whether or not the Company exercises the
call rights granted under this Section 6(a), the Options (whether or not then
exercisable) held by the Management Stockholder or the Management Stockholder's
Trust, as the case may be, will terminate immediately without payment therefor.
(b) If, on or prior to the fifth anniversary of the Base Date, the
Management Stockholder's employment is terminated as a result of the death or
permanent disability of the Management Stockholder or if the Management
Stockholder dies or becomes permanently disabled after the retirement of the
Management Stockholder from the Company or any of its subsidiaries at age 65 or
over (or such other age as may be approved by the Board of Directors of the
Company) after having been employed by the Company or any subsidiary for at
least three years after the Base Date, (each a "Section 6(b) Call Event"), then
the Company shall have the right to purchase all, but not less than all, of the
shares of Stock then held by the Management Stockholder, the Management
Stockholder's Estate or a Management Stockholder's Trust at the Section 5(a)
Repurchase Price.
(c) If, on or prior to the fifth anniversary of the Base Date, the
Management Stockholder's employment is terminated as a result of a termination
by the Management Stockholder with Good Reason or upon the retirement of the
Management Stockholder from the Company or any of its subsidiaries at age 65 or
over (or such other age as may be approved by the Board of Directors of the
Company) after having been employed by the Company or any subsidiary for at
least three years after the Base Date, or by the Company without Cause (each a
"Section 6(c) Call Event" and together with Section 6(a) Call Events and Section
6(b) Call Events, "Call Events"), then the Company shall have the right to
purchase all, but not less than all, of the shares of Stock then held by the
Management Stockholder or a Management Stockholder's Trust at the Section 6(c)
Repurchase Price.
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(d) The Company shall have a period of 75 days from the date of a
Call Event in which to give notice in writing to the Management Stockholder of
the exercise of such election ("Call Notice"). In the event that the Company
exercises its right to repurchase shares of Stock pursuant to Section 6(b) or
Section 6(c), the Company shall also pay the Management Stockholder an amount
equal to the Option Excess Price determined on the basis of the Section 5(a)
Repurchase Price or Section 6(c) Repurchase Price, respectively, as provided in
Section 8, with respect to the termination of outstanding Options held by the
Management Stockholder.
(e) The completion of the purchases pursuant to the foregoing shall
take place at the principal office of the Company on the tenth business day
after the giving of notice of the exercise of the option to purchase. The
applicable Repurchase Price and any payment with respect to the Options as
described in Sections 6(d) above shall be paid by delivery to the Management
Stockholder, the Management Stockholder's Estate or a Management Stockholder's
Trust, as the case may be, of a certified bank check or checks in the
appropriate amount payable to the order of the Management Stockholder, the
Management Stockholder's Estate or a Management Stockholder's Trust, as the case
may be, against delivery of certificates or other instruments representing the
Stock so purchased and appropriate documents cancelling the Options so
terminated, appropriately endorsed or executed by the Management Stockholder,
the Management Stockholder's Estate or a Management Stockholders Trust or his,
her or its authorized representative.
(f) Notwithstanding any other provision of this Section 6 to the
contrary and subject to Section 11, if there exists and is continuing any Event,
the Company shall delay the repurchase of any of the Stock or the Options
(pursuant to a Call Notice timely given in accordance with Section 6(d) hereof)
from the Management Stockholder, the Management Stockholder's Estate or a
Management Stockholder's Trust, as the case may be, until the Repurchase
Eligibility Date; provided, however, that (i) the number of shares of Stock
subject to repurchase under this Section 6(f) shall be that number of shares of
Stock and (ii) in the case of a repurchase pursuant to Section 6(b) or Section
6(c), the number of Exercisable Option Shares for purposes of calculating the
Option Excess Price payable under this Section 6(f) shall be the number of
Exercisable Option Shares held by the Management Stockholder, the Management
Stockholder's Estate or a Management Stockholder's Trust, as the case may be, at
the time of delivery of a Call Notice in accordance with Section 6(d) hereof;
and provided, further, that the Repurchase Calculation Date shall be determined
in accordance with Section 7 based on the Repurchase Eligibility Date (unless
(x) in the case of a Section 6(b) Call Event or a Section 6(c) Call Event, the
applicable Repurchase Price would be greater if the Repurchase Calculation Date
had been determined as if no Event had occurred, in which case the Repurchase
Calculation Date shall be determined as if no Event had occurred, and (y) in the
case of a Section 6(a) Call Event, the applicable Repurchase Price would be less
if the Repurchase Calculation Date had been determined as if no Event had
occurred, in which case the Repurchase Calculation Date shall be determined as
if no Event had occurred). All Options exercisable as of the date of a Call
Notice, in the case of a repurchase pursuant to Section 6(b) or Section 6(c),
shall continue to be exercisable until the repurchase pursuant to such Call
Notice, provided that to the extent that any Options are exercised after the
date of such Call Notice, the number of Exercisable Option Shares for purposes
of calculating the Option Excess Price shall be reduced accordingly.
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7. DETERMINATION OF REPURCHASE PRICE.
(a) The Section 5(a) Repurchase Price, Section 6(a) Repurchase Price and
the Section 6(c) Repurchase Price are hereinafter collectively referred to as
the "Repurchase Price." The Repurchase Price shall be calculated on the basis
of the unaudited financial statements of the Company or the Market Price Per
Share (as defined in Section 7(j)) as of the last day of the month preceding the
later of (i) the month in which the event giving rise to the repurchase occurs
and (ii) the month in which the Repurchase Eligibility Date occurs (hereinafter
called the "Repurchase Calculation Date"). The event giving rise to the
repurchase shall be the death, permanent disability, retirement or termination
of employment, as the case may be, of the Management Stockholder, not the giving
of any notice required pursuant to Section 5 or 6.
(b) The Section 5(a) Repurchase Price shall be a per share Repurchase
Price equal to the Base Price, provided that if the Book Value Per Share (as
defined in Section 7(h)) (or, after a Public Offering, the Market Price Per
Share) as of the Repurchase Calculation Date is greater than the Base Price,
then the Section 5(a) Repurchase Price shall be equal to the Base Price plus the
amount by which the Book Value Per Share (or, after a Public Offering, the
Market Price Per Share) as of the Repurchase Calculation Date exceeds the Base
Price.
(c) [Intentionally omitted]
(d) The Section 6(a) Repurchase Price shall be a per share Repurchase
Price equal to the least of (i) after a Public Offering, the Market Price Per
Share, (ii) if the Book Value Per Share as of the Repurchase Calculation Date is
less than the Base Price, the Base Price less the amount by which the Base Price
exceeds Book Value Per Share as of the Repurchase Calculation Date (but shall
not be less than zero), and (iii) if the Book Value Per Share as of the
Repurchase Calculation Date exceeds the Base Price, the Base Price plus (x) the
Percentage (as defined below) multiplied by (y) the amount by which the Book
Value Per Share as of the Repurchase Calculation Date exceeds the Base Price.
(e) The Section 6(c) Repurchase Price shall be a per share Repurchase
Price equal to the Base Price, provided (x) if the Book Value Per Share (or,
after a Public Offering, the Market Price Per Share) as of the Repurchase
Calculation Date is less than the Base Price, then the Section 6(c) Repurchase
Price shall equal the Base Price less the amount by which the Base Price exceeds
Book Value Per Share (or, after a Public Offering, the Market Price Per Share)
as of the Repurchase Calculation Date, and (y) if the Book Value Per Share (or,
after a Public Offering, the Market Price Per Share) as of the Repurchase
Calculation Date is greater than the Base Price, then the Section 6(c)
Repurchase Price shall equal the Base Price plus the amount by which the Book
Value Per Share (or, after a Public Offering, the Market Price Per Share) as of
the Repurchase Calculation Date exceeds the Base Price, as the case may be.
(f) For purposes of this Agreement the following definitions shall apply:
"Cause" shall mean (i) the Management Stockholder's willful and continued
failure to perform Management Stockholder's duties with respect to the Company
or its subsidiaries which continues beyond ten days after a written demand for
substantial performance is delivered to Management Stockholder by the Company or
(ii) misconduct by Management Stockholder involving (x) dishonesty or breach of
trust in connection with Management Stockholder's employment or (y) conduct
which would be a reasonable basis for an indictment of Management Stockholder
for a felony or for a misdemeanor involving moral turpitude or (z) which results
in a demonstrable injury to the Company; and "Good Reason" shall mean (i) a
reduction in Management Stockholder's base salary (other than a broad based
salary reduction program affecting many members of management), (ii) a
substantial reduction in Management Stockholder's duties and responsibilities
other than as approved by the Chief Executive Officer of the Company as of the
date of this Agreement, (iii) the elimination or reduction of the Management
Stockholder's eligibility to participate in the Company's benefit programs that
is inconsistent with the eligibility of similarly situated employees of the
Company to participate therein, or (iv) a transfer of the Management
Stockholder's primary workplace by more than fifty (50) miles from the workplace
as of the date hereof.
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(g) For purposes of this Agreement, the "Percentage" shall be determined
as follows:
Repurchase Calculation Date Percentage
- --------------------------- ----------
Base Date through and including the first anniversary of the 0%
Base Date
After the first anniversary of the Base Date through and 20%
including the second anniversary of the Base Date
After the second anniversary of the Base Date through and 40%
including the third anniversary of the Base Date
After the third anniversary of the Base Date through and 60%
including the fourth anniversary of the Base Date
After the fourth anniversary of the Base Date through and 80%
including the fifth anniversary of the Base Date
After the fifth anniversary of the Base Date 100%
(h) As used herein, "Book Value Per Share" shall be the quotient of (a)
(i) $455,440,830 PLUS (ii) the aggregate net income of the Company from and
after the date of the Effective Time of the Merger (as decreased by any net
losses from and after the date of the Effective Time of the Merger) excluding
any one time costs and expenses charged to income associated with the Merger and
any related transactions PLUS (iii) the aggregate dollar amount contributed to
(or credited to common stockholders' equity of) the Company after the date of
the Effective Time of the Merger as equity of the Company (including
consideration to be received upon exercise of the Options and other stock
equivalents) PLUS (iv) to the extent reflected as deductions to Book Value Per
Share in clause (ii) above, or minus, to the extent reflected as additions to
Book Value Per Share in clause (ii) above, unusual or other items recognized by
the Company (including, without limitation, one time or accelerated write-offs
of good will), in each case, if and to the extent determined in the sole
discretion of the Board of Directors of the Company, minus, (v) the aggregate
dollar amount of any dividends paid by the Company after the date of the
Effective Time of the Merger, divided by (b) the sum of the number of shares of
Common Stock then outstanding and the number of shares of Common Stock issuable
upon the exercise of all outstanding stock options and other rights to acquire
Common Stock and the conversion of all securities convertible into shares of
Common Stock. The items referred to in the calculations set forth in clauses
(a)(ii), (a)(iii), (a)(iv) and (a)(v) of the immediately preceding sentence
shall be determined in accordance with generally accepted accounting principles
applied on a basis consistent with any prior periods as reflected in the
consolidated financial statements of the Company.
(i) As used herein the term "Public Offering" shall mean the sale of
shares of Common Stock to the public subsequent to the date hereof pursuant to a
registration statement under the Act which has been declared effective by the
SEC (other than a registration statement on Form S-8 or any other similar form)
which results in an active trading market in 35% or more of the Common Stock. A
"Qualified Public Offering" shall mean a Public Offering pursuant to an
effective registration statement relating to the sale of shares of the Common
Stock held by KKR 1996 Fund L.P., a Delaware limited partnership (the
"Partnership") or NXS Associates, L.P., a Delaware limited partnership, or their
respective affiliates; PROVIDED, HOWEVER, that a "Qualified Public Offering"
shall be deemed to have occurred if there has been any Public Offering and there
exists an active trading market in 40% or more of the Common Stock.
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(j) As used herein, the term "Market Price Per Share" shall mean the price
per share equal to the average of the last sale price of the Common Stock on the
Repurchase Calculation Date on each exchange on which the Common Stock may at
the time be listed or, if there shall have been no sales on any of such
exchanges on the Repurchase Calculation Date, the average of the closing bid and
asked prices on each such exchange at the end of the Repurchase Calculation Date
or if there is no such bid and asked price on the Repurchase Calculation Date on
the next preceding date when such bid and asked price occurred or, if the Common
Stock shall not be so listed, the average of the closing sales prices as
reported by NASDAQ at the end of the Repurchase Calculation Date in the
over-the-counter market. If the Common Stock is not so listed or reported by
NASDAQ, then the Market Price Per Share shall be the Book Value Per Share.
(k) In determining the Repurchase Price, appropriate adjustments shall be
made for any stock dividends, splits, combinations, recapitalizations or any
other adjustment in the number of outstanding shares of Common Stock in order to
maintain, as nearly as practicable, the intended operation of the provisions of
this Section 7.
8. STOCK ISSUED TO MANAGEMENT STOCKHOLDER UPON EXERCISE OF STOCK OPTIONS;
TERMINATION OF OPTIONS.
(a) The Company may from time to time grant to the Management
Stockholder, in addition to the Options, options under the Option Plan to
purchase shares of Common Stock at the Base Price or at a different option
exercise price. The term "Issued Stock" as used in this Agreement shall include
all shares of Common Stock of the Company purchased by the Management
Stockholder pursuant to this Agreement and issued to the Management Stockholder
by the Company upon exercise of the Options and of any other stock options held
by the Management Stockholder.
(b) In the case of an exercise of the put or call rights described
above in Section 6(a), all outstanding Options of the Management Stockholder
(whether or not then exercisable) will be automatically terminated without
payment therefor. In the case of an exercise of the put rights described above
in Section 5(a) or of the call rights described above in Sections 6(b) or 6(c),
all outstanding Options granted to the Management Stockholder under the Option
Plan or otherwise, whether or not then exercisable, will be automatically
terminated upon the payment by the Company to the Management Stockholder,
pursuant to the provisions of Sections 5(a) or 6(d) of this Agreement, as the
case may be, of an amount equal to the Option Excess Price. If the Option
Excess Price is zero or a negative number, all outstanding stock options granted
to the Management Stockholder under the Option Plan or otherwise, whether or not
then exercisable, shall be automatically terminated upon the repurchase of Stock
as provided in Sections 5(a), 6(b) or 6(c). With respect to each Option, the
Option Excess Price is the excess, if any, of the Section 5(a) Repurchase Price
or the Section 6(c) Repurchase Price, depending on which Repurchase Price is
being used to repurchase the remainder of the Stock, over the Option Exercise
Price (as defined in the Non-Qualified Option Agreement), multiplied by the
number of Exercisable Option Shares thereunder. For purposes hereof,
"Exercisable Option Shares" shall mean the shares of Common Stock which, at the
time of determination of the Option Excess Price could be purchased by the
Management Stockholder upon exercise of his or her outstanding options. The
Company will use its reasonable best efforts to cause a Registration Statement
on Form S-8 covering shares of Issued Stock contemplated hereby to be filed
within six months of the date hereof.
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9. THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to the Management Stockholder that
(i) this Agreement has been duly authorized, executed and delivered by the
Company and (ii) the Issued Stock, when issued and delivered in accordance with
the terms hereof, will be duly and validly issued, fully paid and nonassessable.
(b) The Company will file the reports required to be filed by it under the
Act and the Exchange Act and the rules and regulations adopted by the SEC
thereunder, to the extent required from time to time to enable the Management
Stockholder to sell shares of Stock without registration under the Act within
the limitations of the exemptions provided by (A) Rule 144 under the Act, as
such Rule may be amended from time to time, or (B) any similar rule or
regulation hereafter adopted by the SEC. Notwithstanding anything contained in
this Section 9(b), the Company may de-register under Section 12 of the Exchange
Act if it is then permitted to do so pursuant to the Exchange Act and the rules
and regulations thereunder and, in such circumstances, shall not be required
hereby to file any reports which may be necessary in order for Rule 144 or any
similar rule or regulation under the Act to be available. Nothing in this
Section 9(b) shall be deemed to limit in any manner the restrictions on sales of
Stock contained in this Agreement.
10. "PIGGYBACK" REGISTRATION RIGHTS.
(a) Effective upon the date of this Agreement, until the later of (i) the
first occurrence of a Qualified Public Offering (as defined in Section 7(i)
above) or (ii) the fifth anniversary of the Base Date, the Management
Stockholder hereby agrees to be bound by all of the terms, conditions and
obligations of the Registration Rights Agreement dated as of May 19, among the
Company (as successor by Merger to Newco), KKR 1996 Fund L.P., NXS Associates,
L.P. KKR Partners II, L.P. and NXS I, L.L.C. (the "Registration Rights
Agreement") and, in the case of a Qualified Public Offering and subject to the
limitations set forth in this Section 10, shall have all of the rights and
privileges of the Registration Rights Agreement, in each case as if the
Management Stockholder were an original party (other than the Company) thereto;
PROVIDED, HOWEVER, that the Management Stockholder shall not have any rights to
request registration under Section 3 of the Registration Rights Agreement; and
PROVIDED FURTHER, that the Management Stockholder shall not be bound by any
amendments to the Registration Rights Agreement unless the Management
Stockholder consents thereto. Notwithstanding anything to the contrary
contained in the Registration Rights Agreement, the Management Stockholder's
rights and obligations under the Registration Rights Agreement shall be subject
to the limitations and additional obligations set forth in this Section 10. All
Stock purchased or held by the Management Stockholder, the Management
Stockholder's Estate or the Management Stockholder's Trust pursuant to this
Agreement shall be deemed to be Registrable Securities as defined in the
Registration Rights Agreement.
(b) The Company will promptly notify the Management Stockholder in writing
(a "Notice") of any proposed registration (a "Proposed Registration") in
connection with a Qualified Public Offering. If within 15 days of the receipt
by the Management Stockholder of such Notice, the Company receives from the
Management Stockholder, the Management Stockholder's Estate or the Management
Stockholder's Trust a written request (a "Request") to register shares of Stock
held by the Management Stockholder, the Management Stockholder's Estate or the
Management Stockholder's Trust (which Request will be irrevocable unless
otherwise mutually agreed to in writing by the Management Stockholder and the
Company), shares of Stock will be so registered as provided in this Section 10;
PROVIDED, HOWEVER, that for each such registration statement only one Request,
which shall be executed by the Management Stockholder, the Management
Stockholder's Estate or the Management Stockholder's Trust, as the case may be,
may be submitted for all Registrable Securities held by the Management
Stockholder, the Management Stockholder's Estate and the Management
Stockholder's Trust.
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(c) The maximum number of shares of Stock which will be registered
pursuant to a Request will be the lowest of (i) the number of shares of Stock
then held by the Management Stockholder (which for purposes of this subparagraph
(c) shall include shares held by the Management Stockholder's Estate or a
Management Stockholder's Trust), including all shares of Stock which the
Management Stockholder is then entitled to acquire under an unexercised Option
to the extent then exercisable or (ii) the maximum number of shares of Stock
which the Company can register in the Proposed Registration without adverse
effect on the offering in the view of the managing underwriters (reduced pro
rata with all Other Management Stockholders) as more fully described in
subsection (d) of this Section 10 or (iii) the maximum number of shares which
the Management Stockholder (pro rata based upon the aggregate number of shares
of Common Stock the Management Stockholder and all Other Management Stockholders
have requested be registered) and all Other Management Stockholders are
permitted to register under the Registration Rights Agreement.
(d) If a Proposed Registration involves an underwritten offering and the
managing underwriter advises the Company in writing that, in its opinion, the
number of shares of Stock requested to be included in the Proposed Registration
exceeds the number which can be sold in such offering, so as to be likely to
have an adverse effect on the price, timing or distribution of the shares of
Stock offered in such Qualified Public Offering as contemplated by the Company,
then the Company will include in the Proposed Registration (i) first, 100% of
the shares of Stock the Company proposes to sell and (ii) second, to the extent
of the number of shares of Stock requested to be included in such registration
which, in the opinion of such managing underwriter, can be sold without having
the adverse effect referred to above, the number of shares of Stock which the
"Holders" (as defined in the Registration Rights Agreement), including, without
limitation, the Management Stockholder and Other Management Stockholders have
requested to be included in the Proposed Registration, such amount to be
allocated pro rata among all requesting Holders on the basis of the relative
number of shares of Stock then held by each such Holder (provided that any
shares thereby allocated to any such Holder that exceed such Holder's request
will be reallocated among the remaining requesting Holders in like manner)
(e) Upon delivering a Request the Management Stockholder will, if
requested by the Company, execute and deliver a custody agreement and power of
attorney in form and substance satisfactory to the Company with respect to the
shares of Stock to be registered pursuant to this Section 10 (a "Custody
Agreement and Power of Attorney"). The Custody Agreement and Power of Attorney
will provide, among other things, that the Management Stockholder will deliver
to and deposit in custody with the custodian and attorney-in-fact named therein
a certificate or certificates representing such shares of Stock (duly endorsed
in blank by the registered owner or owners thereof or accompanied by duly
executed stock powers in blank) and irrevocably appoint said custodian and
attorney-in-fact as the Management Stockholder's agent and attorney-in-fact with
full power and authority to act under the Custody Agreement and Power of
Attorney on the Management Stockholder's behalf with respect to the matters
specified therein.
(f) The Management Stockholder agrees that he or she will execute such
other agreements as the Company may reasonably request to further evidence the
provisions of this Section 10.
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11. PRO RATA REPURCHASES.
Notwithstanding anything to the contrary contained in Sections 5, 6 or
7, if at any time consummation of all purchases and payments to be made by the
Company pursuant to this Agreement and the Other Management Stockholders'
Agreements would result in an Event, then the Company shall make purchases from,
and payments to, the Management Stockholder and Other Management Stockholders
pro rata (on the basis of the proportion of the number of shares of Stock and
the number of Options each such Management Stockholder and all Other Management
Stockholders have elected or are required to sell to the Company) for the
maximum number of shares of Stock and shall pay the Option Excess Price for the
maximum number of Options permitted without resulting in an Event (the "Maximum
Repurchase Amount"). The provisions of Section 5(d) and 6(f) shall apply in
their entirety to payments and repurchases with respect to Options and shares of
Stock which may not be made due to the limits imposed by the Maximum Repurchase
Amount under this Section 11. Until all of such Stock and Options are purchased
and paid for by the Company, the Management Stockholder and the Other Management
Stockholders whose Stock and Options are not purchased in accordance with this
Section 11 shall have priority, on a pro rata basis, over other purchases of
Common Stock and Options by the Company pursuant to this Agreement and Other
Management Stockholders' Agreements.
12. RIGHTS TO NEGOTIATE REPURCHASE PRICE.
Nothing in this Agreement shall be deemed to restrict or prohibit the
Company from purchasing shares of Stock or Options from the Management
Stockholder, at any time, upon such terms and conditions, and for such price, as
may be mutually agreed upon between the Parties, whether or not at the time of
such purchase circumstances exist which specifically grant the Company the right
to purchase, or the Management Stockholder the right to sell, shares of Stock or
the Company has the right to pay, or the Management Stockholder has the right to
receive, the Option Excess Price under the terms of this Agreement.
13. COVENANT REGARDING 83(B) ELECTION.
Except as the Company may otherwise agree in writing, the Management
Stockholder hereby covenants and agrees that he will make an election provided
pursuant to Treasury Regulation 1.83-2 with respect to the Stock, including
without limitation, the Stock to be acquired pursuant to Section 1 and the Stock
to be acquired upon each exercise of the Management Stockholder's Non-Qualified
Options; and Management Stockholder further covenants and agrees that he will
furnish the Company with copies of the forms of election the Management
Stockholder files within 30 days after the date hereof, and within 30 days after
each exercise of Management Stockholder's Non-Qualified Options and with
evidence that each such election has been filed in a timely manner. The Company
agrees that, for purposes of its reporting and withholding in connection with
the election provided for in the preceding sentence, the Management Stockholder
will not be deemed to have realized any compensation income with respect to any
shares of Retained Stock.
14. NOTICE OF CHANGE OF BENEFICIARY.
Immediately prior to any transfer of Stock to a Management
Stockholder's Trust, the Management Stockholder shall provide the Company with a
copy of the instruments creating the Management Stockholder's Trust and with the
identity of the beneficiaries of the Management Stockholder's Trust. The
Management Stockholder shall notify the Company immediately prior to any change
in the identity of any beneficiary of the Management Stockholder's Trust.
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<PAGE>
15. EXPIRATION OF CERTAIN PROVISIONS.
The provisions contained in Sections 4, 5 and 6 of this Agreement and
the portion of any other provision of this Agreement which incorporates the
provisions of Sections 4, 5 and 6, shall terminate and be of no further force or
effect with respect to any shares of Stock sold by the Management Stockholder
(i) pursuant to an effective registration statement filed by the Company
pursuant to Section 10 hereof or (ii) pursuant to the terms of the Sale
Participation Agreement of even date herewith, among the Management Stockholder,
and KKR 1996 Fund L.P., NXS Associates, L.P. and KKR Partners II, L.P.
The provisions contained in Sections 2(e), 3, 4, 5, 6 and 13 of this
Agreement, and the portion of any other provisions of this Agreement which
incorporate the provisions of such Sections, shall terminate and be of no
further force or effect upon (i) the sale of all or substantially all of the
assets of the Company to a person or group that is not an affiliate of Kohlberg
Kravis Roberts & Co. L.P. ("KKR"), (ii) an acquisition of voting stock of the
Company resulting in more than 50% of the voting stock of the Company being held
by a person or group that does not include KKR or any of its affiliates or (iii)
the consummation of a merger, reorganization, business combination or
liquidation of the Company, but only if such merger, reorganization, business
combination or liquidation results in the Partnership or NXS Associates, L.P.,
or any affiliate or affiliates thereof, together no longer having the power (A)
to elect a majority of the Board of Directors of the Company or such other
corporation which succeeds to the Company's rights and obligations pursuant to
such merger, reorganization, business combination or liquidation, or (B) if the
resulting entity of such merger, reorganization, business combination or
liquidation is not a corporation, to select the general partner(s) or other
persons or entities controlling the operations and business of the resulting
entity. Such provisions and the portion of any other provisions of this
Agreement which incorporate such provisions shall also terminate and be of no
further force and effect if the Management Stockholder's employment is
terminated and the Company has not given a Call Notice within 75 days from the
date of the applicable Call Event (i) with respect to all the Stock of a
Management Stockholder if the Management Stockholder's employment has been
terminated as a result of termination by the Management Stockholder with Good
Reason or by the Company without Cause, and (ii) with respect to only the
Retained Stock and any Issued Stock (other than any shares acquired upon the
exercise of Options) or Market Stock of a Management Stockholder if the
Management Stockholder's employment has been terminated for any other reason.
16. RECAPITALIZATIONS, ETC.
The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Stock or the Options, to any and all shares of
capital stock of the Company or any capital stock, partnership units or any
other security evidencing ownership interests in any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or substitution of the Stock or
the Options, by reason of any stock dividend, split, reverse split, combination,
recapitalization, liquidation, reclassification, merger, consolidation or
otherwise.
17. MANAGEMENT STOCKHOLDER'S EMPLOYMENT BY THE COMPANY.
Nothing contained in this Agreement or in any other agreement entered
into by the Company and the Management Stockholder contemporaneously with the
execution of this Agreement (i) obligates the Company or any subsidiary of the
Company to employ the Management Stockholder in any capacity whatsoever or (ii)
prohibits or restricts the Company (or any such subsidiary) from terminating the
employment, if any, of the Management Stockholder at any time or for any reason
whatsoever, with or without Cause, and the Management Stockholder hereby
acknowledges and agrees that neither the Company nor any other person has made
any representations or promises whatsoever to the Management Stockholder
concerning the Management Stockholder's employment or continued employment by
the Company or any subsidiary of the Company.
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18. STATE SECURITIES LAWS.
The Company hereby agrees to use its best efforts to comply with all
state securities or "blue sky" laws which might be applicable to the sale of the
Stock and the issuance of the Options to the Management Stockholder.
19. BINDING EFFECT.
The provisions of this Agreement shall be binding upon and accrue to
the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. In the case of a transferee permitted
under Section 2(a) hereof, such transferee shall be deemed the Management
Stockholder hereunder; provided, however, that no transferee (including without
limitation, transferees referred to in Section 2(a) hereof) shall derive any
rights under this Agreement unless and until such transferee has delivered to
the Company a valid undertaking and becomes bound by the terms of this
Agreement.
20. AMENDMENT.
This Agreement may be amended only by a written instrument signed by
the Parties hereto.
21. CLOSING.
Except as otherwise provided herein, the closing of each purchase and
sale of shares of Stock and the payment of the Option Excess Price, if any,
pursuant to this Agreement shall take place at the principal office of the
Company on the tenth business day following delivery of the notice by either
Party to the other of its exercise of the right to purchase or sell such Stock
hereunder or to cause the payment of the Option Excess Price, if any.
22. APPLICABLE LAW.
The laws of the state of Delaware (or if the Company reincorporates in
another state, of that state) shall govern the interpretation, validity and
performance of the terms of this Agreement, regardless of the law that might be
applied under principles of conflicts of law. Any suit, action or proceeding
against the Management Stockholder, with respect to this Agreement, or any
judgment entered by any court in respect of any thereof, may be brought in any
court of competent jurisdiction in the State of Delaware (or if the Company
reincorporates in another state, in that state) or New York, as the Company may
elect in its sole discretion, and the Management Stockholder hereby submits to
the non-exclusive jurisdiction of such courts for the purpose of any such suit,
action, proceeding or judgment. By the execution and delivery of this
Agreement, the Management Stockholder appoints The Corporation Trust Company, at
its office in New York, New York or Wilmington, Delaware (or if the Company
reincorporates in another state, an office in that state), as the case may be,
as his agent upon which process may be served in any such suit, action or
proceeding. Service of process upon such agent, together with notice of such
service given to the Management Stockholder in the manner provided in Section 25
hereof, shall be deemed in every respect effective service of process upon him
in any suit, action or proceeding. Nothing herein shall in any way be deemed to
limit the ability of the Company to serve any such writs, process or summonses
in any other manner permitted by applicable law or to obtain jurisdiction over
the Management Stockholder, in such other jurisdictions and in such manner, as
may be permitted by applicable law. The Management Stockholder hereby
irrevocably waives any objections which he may now or hereafter have to the
laying of the venue of any suit, action or proceeding arising out of or relating
to this Agreement brought in any court of competent jurisdiction in the State of
Delaware (or if the Company reincorporates in another state, in that state) or
New York, and hereby further irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in any
inconvenient forum.
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<PAGE>
No suit, action or proceeding against the Company with respect to this Agreement
may be brought in any court, domestic or foreign, or before any similar domestic
or foreign authority other than in a court of competent jurisdiction in the
State of Delaware (or if the Company reincorporates in another state, in that
state) or New York, and the Management Stockholder hereby irrevocably waives any
right which he may otherwise have had to bring such an action in any other
court, domestic or foreign, or before any similar domestic or foreign authority.
The Company hereby submits to the jurisdiction of such courts for the purpose of
any such suit, action or proceeding. Each Party hereto hereby irrevocably and
unconditionally waives trial by jury in any legal action or proceeding in
relation to this Agreement and for any counterclaim therein.
23. ASSIGNABILITY OF CERTAIN RIGHTS BY THE COMPANY.
The Company shall have the right to assign any or all of its rights or
obligations to purchase shares of Stock pursuant to Sections 4, 5 and 6 hereof;
provided, however, that the Company shall remain obligated to perform its
obligations notwithstanding such assignment in the event that such assignee
fails to perform the obligations so assigned to it.
24. MISCELLANEOUS.
In this Agreement (i) all references to "dollars" or "$" are to United
States dollars and (ii) the word "or" is not exclusive. If any provision of
this Agreement shall be declared illegal, void or unenforceable by any court of
competent jurisdiction, the other provisions shall not be affected, but shall
remain in full force and effect.
25. NOTICES.
All notices and other communications provided for herein shall be in
writing and shall be deemed to have been duly given if delivered by hand
(whether by overnight courier or otherwise) or sent by registered or certified
mail, return receipt requested, postage prepaid, or by overnight delivery or
telecopy, to the Party to whom it is directed:
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<PAGE>
(a) If to the Company, to it at the following address:
c/o Kohlberg Kravis Roberts & Co.
2800 Sand Hill Road
Suite 200
Menlo Park, California 94025
Attn: Michael Michelson
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3909
Attn: Charles I. Cogut, Esq.
(b) If to the Management Stockholder, to him at the address set forth
below under his signature;
or at such other address as either party shall have specified by notice in
writing to the other.
26. COVENANT NOT TO COMPETE; CONFIDENTIAL INFORMATION.
(a) In consideration of the Company entering into this Agreement with
the Management Stockholder, the Management Stockholder hereby agrees effective
as of the Base Date, for so long as the Management Stockholder is employed by
the Company or one of its subsidiaries and for a period of one year thereafter
(the "Noncompete Period"), the Management Stockholder shall not, directly or
indirectly, engage in the production, sale or distribution of any product
produced, sold, distributed or which is in development by the Company or its
subsidiaries on the date hereof or during the Noncompete Period anywhere in the
world in which the Company or its subsidiaries is doing business other than
through the Management Stockholder's employment with the Company or any of its
subsidiaries. In the event that the Management Stockholder's employment is
terminated by the Management Stockholder for Good Reason or by the Company
without Cause, then the Company shall pay the Management Stockholder an amount
equal to 50% of such Management Stockholder's base salary on the date of the
termination of the Management Stockholder's employment. At the Company's
option, the Noncompete Period may be extended for an additional one year period
if (i) within nine months of the termination of the Management Stockholder's
employment, the Company gives the Management Stockholder notice of such
extension and (ii) beginning with the first anniversary of such termination, the
Company pays the Management Stockholder an amount equal to 50% of the Management
Stockholder's base salary on the date of the termination of his employment.
Each amount referred to in the preceding two sentences shall be paid in
installments in a manner consistent with the then current salary payment
policies of the Company; provided that if at any time the Company elects, in its
sole discretion, to waive further compliance by the Management Stockholder with
the requirements of this Section 26(a) (upon the Management Stockholder securing
alternate employment or otherwise), then the Company shall be relieved of its
obligation to pay the unpaid balance, if any, of such amounts which is then
owing to the Management Stockholder. For purposes of this Agreement, the phrase
"directly or indirectly engage in" shall include any direct or indirect
ownership or profit participation interest in such enterprise, whether as an
owner, stockholder, partner, joint venturer of otherwise, and shall include any
direct or indirect participation in such enterprise as a consultant, licensor of
technology or otherwise.
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(b) The Management Stockholder will not disclose or use at any time
any Confidential Information (as defined below) of which the Management
Stockholder is or becomes aware, whether or not such information is developed by
him, except to the extent that such disclosure or use is directly related to and
required by the Management Stockholder's performance of duties, if any, assigned
to the Management Stockholder by the Company. As used in this Agreement, the
term "Confidential Information" means information that is not generally known to
the public and that is used, developed or obtained by the Company or its
subsidiaries in connection with its business, including but not limited to (i)
products or services, (ii) fees, costs and pricing structures, (iii) designs,
(iv) computer software, including operating systems, applications and program
listings, (v) flow charts, manuals and documentation, (vi) data bases, (vii)
accounting and business methods, (viii) inventions, devices, new developments,
methods and processes, whether patentable or unpatentable and whether or not
reduced to practice, (ix) customers and clients and customer or client lists,
(x) other copyrightable works, (xi) all technology and trade secrets, and (xii)
all similar and related information in whatever form. Confidential Information
will not include any information that has been published in a form generally
available to the public prior to the date the Management Stockholder proposes to
disclose or use such information. The Management Stockholder acknowledges and
agrees that all copyrights, works, inventions, innovations, improvements,
developments, patents, trademarks and all similar or related information which
relate to the actual or anticipated business of the Company and its subsidiaries
(including its predecessors) and conceived, developed or made by the Management
Stockholder while employed by the Company or its subsidiaries belong to the
Company. The Management Stockholder will perform all actions reasonably
requested by the Company (whether during or after the Noncompete Period) to
establish and confirm such ownership at the Company's expense (including without
limitation assignments, consents, powers of attorney and other instruments). If
the Management Stockholder is bound by any other agreement with the Company
regarding the use or disclosure of confidential information, the provisions of
this Agreement shall be read in such a way as to further restrict and not to
permit any more extensive use or disclosure of confidential information.
(c) Notwithstanding clauses (a) and (b) above, if at any time a court
holds that the restrictions stated in such clauses (a) and (b) are unreasonable
or otherwise unenforceable under circumstances then existing, the parties hereto
agree that the maximum period, scope or geographic area determined to be
reasonable under such circumstances by such court will be substituted for the
stated period, scope or area. Because the Management Stockholder's services are
unique and because the Management Stockholder has had access to Confidential
Information, the parties hereto agree that money damages will be an inadequate
remedy for any breach of this Agreement. In the event a breach or threatened
breach of this Agreement, the Company or its successors or assigns may, in
addition to other rights and remedies existing in their favor, apply to any
court of competent jurisdiction for specific performance and/or injunctive
relief in order to enforce, or prevent any violations of, the provisions hereof
(without the posting of a bond or other security).
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
AMPHENOL CORPORATION
By:
----------------------------
Name:
Title:
-------------------------------
-------------------------------
Management Stockholder
---------------------------------------------
---------------------------------------------
Address of Management Stockholder
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SCHEDULE I
----------
Targeted Retained Number:
Actual Retained Number:
Number of Shares of Retained Stock:
Number of Shares of Purchase Stock:
Issued Stock:
Market Stock:
Aggregate Purchase Price:
<PAGE>
EXHIBIT A
---------
Form of Non-Qualified Stock Option Agreement
[See Exhibit 4.5]
<PAGE>
Exhibit 4.5
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of May 19, 1997, is made by and between
AMPHENOL CORPORATION a Delaware corporation (hereinafter referred to as the
"Company"), and _____________________, an employee of the Company or a
Subsidiary (as defined below) or Affiliate (as defined below) of the Company
(hereinafter referred to as "Optionee").
WHEREAS, the Company wishes to afford the Optionee the opportunity to
purchase shares of its Class A Common Stock, par value $.001 per share (the
"Common Stock");
WHEREAS, the Company wishes to carry out the Plan (as hereinafter
defined), the terms of which are hereby incorporated by reference and made a
part of this Agreement; and
WHEREAS, the Committee (as hereinafter defined), appointed to
administer the Plan, has determined that it would be to the advantage and best
interest of the Company and its stockholders to grant the Non-Qualified Options
provided for herein to the Optionee as an incentive for increased efforts during
his term of office with the Company or its Subsidiaries or Affiliates, and has
advised the Company thereof and instructed the undersigned officers to issue
said Options;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall
have the meaning specified in the Plan or below unless the context clearly
indicates to the contrary.
Section 1.1 - Affiliate
"Affiliate" shall mean, with respect to the Company, any corporation
directly or indirectly controlling, controlled by, or under common control with,
the Company or any other entity designated by the Board of Directors of the
Company in which the Company or an Affiliate has an interest.
Section 1.2 - Cause
"Cause" shall mean, (i) the Optionee's willful and continued failure
to perform his or her duties with respect to the Company or its Subsidiaries
which continues beyond 10
<PAGE>
2
days after a written demand for substantial performance is delivered to the
Optionee by the Company or (ii) misconduct by the Optionee (x) involving
dishonesty or breach of trust in connection with Optionee's employment, (y)
which would be a reasonable basis for an indictment of the Optionee of a
felony or a misdemeanor involving moral turpitude or (z) which results in a
demonstrable injury to the Company.
Section 1.3 - Change of Control
"Change of Control" shall mean (i) a sale of all or substantially all
of the assets of the Company to a Person who is not an Affiliate of Kohlberg
Kravis Roberts & Co. L.P. ("KKR"), (ii) an acquisition of voting stock of the
Company resulting in more than 50% of the voting stock of the Company being held
by a Person or Group that does not include KKR or any of its Affiliates or (iii)
the consummation of a merger, reorganization, business combination or
liquidation of the Company, but only if such merger, reorganization, business
combination or liquidation results in the KKR 1996 Fund L.P., a Delaware limited
partnership (the "Partnership") or NXS Associates L.P., or any affiliates or
affiliates thereof, together no longer having power (A) to elect a majority of
the Board of Directors of the Company or such other corporation which succeeds
to the Company's rights and obligation pursuant to such merger, reorganization,
business combination or liquidation, or (B) if the resulting entity of such
merger, reorganization, business combination or liquidation is not a
corporation, to select the general partner(s) or other persons or entities
controlling the operations and business of the resulting entity.
Section 1.4 - Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.5 - Committee
"Committee" shall mean the Compensation Committee of the Company.
Section 1.6 - Good Reason
"Good Reason" shall mean (i) a reduction in Optionee's base salary
(other than a broad based salary reduction program affecting many members of
management), (ii) a substantial reduction in Optionee's duties and
responsibilities other than as approved by the Chief Executive Officer of the
Company as of the date of this Agreement, (iii) the elimination or reduction of
the Optionee's eligibility to participate in the Company's benefit programs that
is inconsistent with the eligibility of similarly situated employees of the
Company to participate therein, or (iv) a transfer of the Optionee's primary
workplace by more than fifty (50) miles from the workplace as of the date
hereof.
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3
Section 1.7 - Grant Date
"Grant Date" shall mean the date on which the Options provided for in
this Agreement were granted.
Section 1.8 - Group
"Group" means two or more Persons acting together as a partnership,
limited partnership, syndicate or other group for the purpose of acquiring,
holding or disposing of securities of the Company.
Section 1.9 - Management Stockholder's Agreement
"Management Stockholder's Agreement" shall mean that certain
Management Stockholder's Agreement dated as of May 19, 1997, between the
Optionee and the Company.
Section 1.10 - Options
"Options" shall mean the non-qualified options, to purchase Common
Stock granted under this Agreement.
Section 1.11 - Permanent Disability
The Optionee shall be deemed to have a "Permanent Disability" if the
Optionee is unable to engage in the activities required by the Optionee's job by
reason of any medically determined physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months.
Section 1.12 - Person
"Person" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
Section 1.13 - Plan
"Plan" shall mean the 1997 Option Plan for Key Employees of Amphenol
and Subsidiaries.
Section 1.14 - Pronouns
The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
<PAGE>
4
Section 1.15 - Retirement
"Retirement" shall mean retirement at age 65 or over (or such other
age as may be approved by the Board of Directors of the Company) after having
been employed by the Company or a Subsidiary for at least three years after the
Grant Date.
Section 1.16 - Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.17 - Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations, or group of
commonly controlled corporations (other than the last corporation in the
unbroken chain), then owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
Section 1.18 - Trigger Date
"Trigger Date" shall mean the date hereof.
ARTICLE II
GRANT OF OPTIONS
Section 2.1 - Grant of Options
For good and valuable consideration, on and as of the date hereof the
Company irrevocably grants to the Optionee an Option to purchase any part or all
of an aggregate of __________ shares of its $.001 par value Class A Common Stock
upon the terms and conditions set forth in this Agreement.
Section 2.2 - Exercise Price
Subject to Section 2.4, the exercise price of the shares of stock
covered by the Options (the "Option Exercise Price") shall be $26.00 per share
without commission or other charge.
Section 2.3 - No Right to Employment
Nothing in this Agreement or in the Plan shall confer upon the
Optionee any right to continue in the employ of the Company or any Subsidiary or
Affiliate or shall interfere with or restrict in any way the rights of the
Company and its Subsidiaries or
<PAGE>
5
Affiliates, which are hereby expressly reserved, to terminate the employment
of the Optionee at any time for any reason whatsoever, with or without Cause.
Section 2.4 - Adjustments in Options Pursuant to Merger, Consolidation, etc.
Subject to Section 9 of the Plan, in the event that the outstanding
shares of the stock subject to an Option are, from time to time, changed into or
exchanged for a different number or kind of shares of the Company or other
securities of the Company by reason of a merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, combination of
shares, or otherwise, the Committee shall make an adjustment in the number and
kind of shares and/or the amount of consideration as to which or for which, as
the case may be, such Option, or portions thereof then unexercised, shall be
exercisable, in such manner as the Committee determines is reasonably necessary
to maintain as nearly as practicable the rights, benefits and obligations that
the parties would have had absent such event. Any such adjustment made by the
Committee shall be final and binding upon the Optionee, the Company and all
other interested persons.
ARTICLE III
PERIOD OF EXERCISABILITY
Section 3.1 - Commencement of Exercisability
(a) Options shall become exercisable as follows:
Percentage of Option
Date Option Shares Granted As to Which
Becomes Exercisable Option Is Exercisable
After the first anniversary
of the Trigger Date 20%
After the second anniversary
of the Trigger Date 40%
After the third anniversary
of the Trigger Date 60%
After the fourth anniversary
of the Trigger Date 80%
After the fifth anniversary
of the Trigger Date 100%
<PAGE>
6
Notwithstanding the foregoing, (x) no Options shall become exercisable
prior to the time the Plan is approved by the Company's stockholders, and (y)
subject to the immediately preceding clause (x), the Options shall become
immediately exercisable as to 100% of the shares of Common Stock subject to such
Options immediately prior to a Change of Control (but only to the extent such
Options have not otherwise terminated or become exercisable).
(b) Notwithstanding the foregoing, no Option shall become exercisable
as to any additional shares of Common Stock following the termination of
employment of the Optionee for any reason other than a termination of employment
because of death or Permanent Disability of the Optionee, and any Option (other
than as provided in the next succeeding sentence) which is non-exercisable as of
the Optionee's termination of employment shall be immediately cancelled. In the
event of a termination of employment because of such death or Permanent
Disability, the Options shall immediately become exercisable as to all shares of
Common Stock subject thereto.
Section 3.2 - Expiration of Options
Except as otherwise provided in Section 5 or 6 of the Management
Stockholder's Agreement, the Options may not be exercised to any extent by the
Optionee after the first to occur of the following events:
(a) The tenth anniversary of the Grant Date; or
(b) The first anniversary of the date of the Optionee's termination of
employment by reason of death, Permanent Disability or Retirement; or
(c) The first business day which is fifteen calendar days after the
earlier of (i) 75 days after termination of employment of the Optionee for
any reason other than for death, Permanent Disability or Retirement and
(ii) the delivery of notice by the Company that it does not intend to
exercise its call rights under Section 6 of the Management Stockholder's
Agreement; provided, however, that in any event the Options shall remain
exercisable under this subsection 3.2(c) until at least 45 days after
termination of employment of the Optionee for any reason other than for
death, Permanent Disability or Retirement; or
(d) The date the Option is terminated pursuant to Section 5, 6 or 8(b)
of the Management Stockholder's Agreement; or
(e) If the Committee so elects pursuant to Section 9 of the Plan, the
effective date of a Transaction; provided, however, that the Committee has
provided Optionee with a reasonable period of notice prior to the effective
date of such Transaction in which to exercise Options that have then
neither been fully exercised nor become unexercisable under this Section
3.2.
<PAGE>
7
ARTICLE IV
EXERCISE OF OPTIONS
Section 4.1 - Person Eligible to Exercise
Except as provided in the Management Stockholder's Agreement, during
the lifetime of the Optionee, only he may exercise an Option or any portion
thereof. After the death of the Optionee, any exercisable portion of an Option
may, prior to the time when an Option becomes unexercisable under Section 3.2,
be exercised by his personal representative or by any person empowered to do so
under the Optionee's will or under the then applicable laws of descent and
distribution.
Section 4.2 - Partial Exercise
Any exercisable portion of an Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.2; provided, however, that any partial exercise shall be for whole shares of
Common Stock only.
Section 4.3 - Manner of Exercise
An Option, or any exercisable portion thereof, may be exercised solely
by delivering to the Secretary or his office all of the following prior to the
time when the Option or such portion becomes unexercisable under Section 3.2:
(a) Notice in writing signed by the Optionee or the other person then
entitled to exercise the Option or portion thereof, stating that the Option
or portion thereof is thereby exercised, such notice complying with all
applicable rules established by the Committee;
(b) Full payment (in cash, by check or by a combination thereof) for
the shares with respect to which such Option or portion thereof is
exercised;
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Optionee or other person then
entitled to exercise such Option or portion thereof, stating that the
shares of stock are being acquired for his own account, for investment and
without any present intention of distributing or reselling said shares or
any of them except as may be permitted under the Securities Act of 1933, as
amended (the "Act"), and then applicable rules and regulations thereunder,
and that the Optionee or other person then entitled to exercise such Option
or portion thereof will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the
Company if any sale or distribution of the shares by such person is
contrary to the representation and agreement referred to above; provided,
however, that the Committee may, in its absolute discretion, take whatever
additional actions it deems appropriate to ensure the
<PAGE>
8
observance and performance of such representation and agreement and to
effect compliance with the Act and any other federal or state securities
laws or regulations;
(d) Full payment to the Company of all amounts which, under federal,
state or local law, it is required to withhold upon exercise of the Option;
and
(e) In the event the Option or portion thereof shall be exercised
pursuant to Section 4.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the
option.
Without limiting the generality of the foregoing, the Committee may require an
opinion of counsel acceptable to it to the effect that any subsequent transfer
of shares acquired on exercise of an Option does not violate the Act, and may
issue stop-transfer orders covering such shares. Share certificates evidencing
stock issued on exercise of this Option shall bear an appropriate legend
referring to the provisions of subsection (c) above and the agreements herein.
The written representation and agreement referred to in subsection (c) above
shall, however, not be required if the shares to be issued pursuant to such
exercise have been registered under the Act, and such registration is then
effective in respect of such shares.
Section 4.4 - Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of an Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be validly issued, fully paid and nonassessable. The Company shall not be
required to issue or deliver any certificate or certificates for shares of stock
purchased upon the exercise of an Option or portion thereof prior to fulfillment
of all of the following conditions:
(a) The obtaining of approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(b) The lapse of such reasonable period of time following the exercise
of the Option as the Committee may from time to time establish for reasons
of administrative convenience.
Section 4.5 - Rights as Stockholder
The holder of an Option shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any shares purchasable
upon the exercise of the Option or any portion thereof unless and until
certificates representing such shares shall have been issued by the Company to
such holder.
<PAGE>
9
ARTICLE V
MISCELLANEOUS
Section 5.1 - Administration
The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules. All actions taken and all interpretations and determinations
made by the Committee shall be final and binding upon the Optionee, the Company
and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or the Options. In its absolute discretion, the
Board of Directors may at any time and from time to time exercise any and all
rights and duties of the Committee under the Plan and this Agreement.
Section 5.2 - Options Not Transferable
Except as provided in the Management Stockholder's Agreement, neither
the Options nor any interest or right therein or part thereof shall be liable
for the debts, contracts or engagements of the Optionee or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that this Section 5.2 shall not
prevent transfers by will or by the applicable laws of descent and distribution.
Section 5.3 - Shares to Be Reserved
The Company shall at all times during the term of the Options reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.
Section 5.4 - Notices
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
5.4, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Optionee shall,
if the Optionee is then deceased, be given to the Optionee's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 5.4. Any notice shall
have been deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid,
<PAGE>
10
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service, or when sent by
overnight delivery or telecopy.
Section 5.5 - Titles
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
Section 5.6 - Applicability of Plan and Management Stockholder's Agreement
The Options and the shares of Common Stock issued to the Optionee upon
exercise of the Options shall be subject to all of the terms and provisions of
the Plan and the Management Stockholder's Agreement, to the extent applicable to
the Options and such shares. In the event of any conflict between this
Agreement and the Plan, the terms of the Plan shall control. In the event of
any conflict between this Agreement or the Plan and the Management Stockholder's
Agreement, the terms of the Management Stockholder's Agreement shall control.
Section 5.7 - Amendment
This Agreement may be amended only by a writing executed by the
parties hereto which specifically states that it is amending this Agreement.
Section 5.8 - Governing Law
The laws of the State of Delaware (or if the Company reincorporates in
another state, the laws of that state) shall govern the interpretation, validity
and performance of the terms of this Agreement regardless of the law that might
be applied under principles of conflicts of laws.
Section 5.9 - Jurisdiction
Any suit, action or proceeding against the Optionee with respect to
this Agreement, or any judgment entered by any court in respect of any thereof,
may be brought in any court of competent jurisdiction in the State of Delaware
(or if the Company reincorporates in another state, in that state) or New York,
as the Company may elect in its sole discretion, and the Optionee hereby submits
to the non-exclusive jurisdiction of such courts for the purpose of any such
suit, action, proceeding or judgment. The Optionee hereby irrevocably waives
any objections which he may now or hereafter have to the laying of the venue of
any suit, action or proceeding arising out of or relating to this Agreement
brought in any court of competent jurisdiction in the State of Delaware (or if
the Company reincorporates in another state, in that state) or New York, and
hereby further irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in any inconvenient forum.
No suit, action or proceeding against the Company with respect to this Agreement
may be brought in any court, domestic or foreign, or before any similar domestic
or foreign authority other than in a court of competent jurisdiction in the
<PAGE>
11
State of Delaware (or if the Company reincorporates in another state, in that
state) or New York, and the Optionee hereby irrevocably waives any right which
he may otherwise have had to bring such an action in any other court, domestic
or foreign, or before any similar domestic or foreign authority. The Company
hereby submits to the jurisdiction of such courts for the purpose of any such
suit, action or proceeding. The Optionee hereby irrevocably and unconditionally
waives trial by jury in any legal action or proceeding in relation to this
Agreement and for any counterclaim therein.
<PAGE>
12
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
AMPHENOL CORPORATION
By
------------------------------
Name:
Title:
- ------------------------------
- ------------------------------
- ------------------------------
- ------------------------------
Address
________________'s Taxpayer
Identification Number:
- ------------------------------
<PAGE>
Exhibit 4.6
SALE PARTICIPATION AGREEMENT
May 19, 1997
_____________________
Amphenol Corporation
358 Hall Avenue
Wallingford, Connecticut 06492
Dear ___________________:
You have entered into a Management Stockholder's Agreement, dated as
of May 19, 1997 between Amphenol Corporation, a Delaware corporation ("the
Company"), and you (the "Stockholder's Agreement") relating to your ownership
and/or purchase of shares of the Class A Common Stock, par value $.001 per share
(the "Common Stock") of the Company. The undersigned, KKR Partners II, L.P., a
Delaware limited partnership ("KKR Partners"), NXS Associates, L.P., a Delaware
limited partnership ("Associates"), KKR 1996 Fund L.P., a Delaware limited
partnership ("KKR 1996"), and NXS I, L.L.C., a Delaware limited liability
company ("NXS LLC"), also have acquired shares of Common Stock of the Company
and hereby agree with you as follows, effective upon the Effective Time of the
Merger (as defined in the Stockholder's Agreement) or, in the event that you
entered into such Stockholder's Agreement subsequent to the Effective Time of
the Merger, upon the purchase of Common Stock by you:
1. In the event that at any time KKR Partners, Associates, KKR 1996 or
NXS LLC, as the case may be (each, a "Selling Party" and collectively, the
"Selling Parties"), proposes to sell for cash or any other consideration any
shares of Common Stock of the Company owned by it, in any transaction other than
a Qualified Public Offering (as defined in the Stockholder's Agreement) or a
sale to an affiliate of KKR Partners, Associates, KKR 1996 or NXS LLC, as the
case may be, the Selling Party will notify you or your Management Stockholder's
Estate or Management Stockholder's Trust (as such terms are defined in Section 2
of the Stockholder's Agreement), as the case may be, in writing (a "Notice") of
such proposed sale (a "Proposed Sale") and the material terms of the Proposed
Sale as of the date of the Notice (the "Material Terms") promptly, and in any
event not less than 15 days prior to the consummation of the Proposed Sale and
not more than 5 days after the execution of the definitive agreement relating to
the Proposed Sale, if any (the "Sale Agreement"). If within 10 days of your or
your Management Stockholder's Estate's or Management Stockholder's Trust's, as
the case may be, receipt of such Notice the Selling Party receives
from you or your Management Stockholder's Estate or Management Stockholder's
Trust, as the case may be, a written request (a "Request") to include Common
Stock held pursuant to the Stockholder's Agreement by you or your Management
Stockholder's Estate or Management Stockholder's Trust, as the case may be, in
the Proposed Sale (which Request shall be irrevocable unless (a) there shall be
a material adverse change in the Material Terms or (b) if otherwise mutually
agreed to in writing by you or your Management Stockholder's Estate or
Management Stockholder's Trust, as the case may be, and the Selling Party), the
Common Stock so held by you will be so included as provided herein; provided
that only one Request, which shall be executed by you or your Management
Stockholder's Estate or
<PAGE>
2
Management Stockholder's Trust, as the case may be, may be delivered with
respect to any Proposed Sale for all Common Stock held by you or your
Management Stockholder's Estate or Management Stockholder's Trust. Any
Common Stock held by you or by your Management Stockholder's Estate or
Management Stockholder's Trust which is not subject to the terms and
conditions of the Stockholder's Agreement shall not be included in any
Proposed Sale, and references to Common Stock herein shall be construed
accordingly. Promptly after the consummation of the transactions
contemplated thereby, the Selling Party will furnish you, your Management
Stockholder's Trust or your Management Stockholder's Estate with a copy of
the Sale Agreement, if any. In the event that KKR Partners and any or all of
Associates, KKR 1996 and/or NXS LLC propose to sell shares of Common Stock in
the Proposed Sale, the term "Selling Partnership" shall refer only to
Associates, KKR 1996 and/or NXS LLC, as the case may be, and not to KKR
Partners.
2. The number of shares of Common Stock which you or your Management
Stockholder's Estate or Management Stockholder's Trust, as the case may be, will
be permitted to include in a Proposed Sale pursuant to a Request will be the
lesser of (a) the sum of the number of shares of Common Stock then owned by you
or your Management Stockholder's Estate or Management Stockholder's Trust (and
held pursuant to the Stockholder's Agreement), as the case may be, plus all
shares of Common Stock which you are then entitled to acquire under an
unexercised Option (as defined in the Stockholder's Agreement) to purchase
shares of Common Stock, to the extent such Option is then vested or would become
vested as a result of the consummation of the Proposed Sale and (b) the sum of
the shares of Common Stock then owned by you or your Management Stockholder's
Estate or Management Stockholder's Trust, as the case may be, plus all shares of
Common Stock which you are entitled to acquire under an unexercised Option to
purchase shares of Common Stock, whether or not fully vested, multiplied by a
percentage calculated by dividing the aggregate number of shares proposed to be
sold in the Proposed Sale by the total number of shares of Common Stock (x)
owned by all parties who have rights pursuant to this Agreement and any other
Sale Participation Agreement with respect to the Common Stock of the Company and
(y) KKR Partners, Associates, KKR 1996 and NXS LLC. If one or more holders of
shares of Common Stock who have been granted the same rights granted to you or
your Management Stockholder's Estate or Management Stockholder's Trust, as the
case may be, hereunder elect not to include the maximum number of shares of
Common Stock which such holders would have been permitted to include in a
Proposed Sale (the "Eligible Shares"), KKR Partners, Associates or NXS LLC, KKR
1996 or NXS LLC, or such remaining holders of shares of Common Stock, or any of
them, may sell in the Proposed Sale a number of additional shares of Common
Stock owned by any of them equal to their pro rata portion of the number of
Eligible Shares not included in the Proposed Sale, based on the relative number
of shares of Common Stock then held by each such holder, and such additional
shares of Common Stock which any such holder or holders propose to sell shall
not be included in any
<PAGE>
3
calculation made pursuant to the first sentence of this Paragraph 2 for the
purpose of determining the number of shares of Common Stock which you or your
Management Stockholder's Estate or Management Stockholder's Trust, as the
case may be, will be permitted to include in a Proposed Sale. KKR Partners,
Associates, KKR 1996 and NXS LLC, or any of them, may sell in the Proposed
Sale additional shares of Common Stock owned by any of them equal to any
remaining Eligible Shares which will not be included in the Proposed Sale
pursuant to the foregoing.
3. Except as may otherwise be provided herein, shares of Common Stock
subject to a Request will be included in a Proposed Sale pursuant hereto and in
any agreements with purchasers relating thereto on the same terms and subject to
the same conditions applicable to the shares of Common Stock which the Selling
Party proposes to sell in the Proposed Sale. Such terms and conditions shall
include, without limitation: the sales price; the payment of fees, commissions
and expenses; the provision of, and representation and warranty as to,
information requested by the Selling Party; and the provision of requisite
indemnifications; provided that any indemnification provided by you, your
Management Stockholder's Estate or your Management Stockholder's Trust shall be
pro rata in proportion with the number of shares of Common Stock to be sold.
4. Upon delivering a Request, you or your Management Stockholder's
Estate or Management Stockholder's Trust, as the case may be, will, if requested
by the Selling Party, execute and deliver a custody agreement and power of
attorney in form and substance satisfactory to the Selling Party with respect to
the shares of Common Stock which are to be sold by you or your Management
Stockholder's Estate or Management Stockholder's Trust, as the case may be,
pursuant hereto (a "Custody Agreement and Power of Attorney"). The Custody
Agreement and Power of Attorney will provide, among other things, that you or
your Management Stockholder's Estate or Management Stockholder's Trust, as the
case may be, will deliver to and deposit in custody with the custodian and
attorney-in-fact named therein a certificate or certificates representing such
shares of Common Stock (duly endorsed in blank by the registered owner or owners
thereof) and irrevocably appoint said custodian and attorney-in-fact as your or
your Management Stockholder's Estate's or Management Stockholder's Trust's, as
the case may be, agent and attorney-in-fact with full power and authority to act
under the Custody Agreement and Power of Attorney on your or your Management
Stockholder's Estate's or Management Stockholder's Trust's, as the case may be,
behalf with respect to the matters specified therein.
5. Your or your Management Stockholder's Estate's or Management
Stockholder's Trust's, as the case may be, right pursuant hereto to participate
in a Proposed Sale shall be contingent on your or your Management Stockholder's
Estate's or Management Stockholder's Trust's, as the case may be, strict
compliance with each of the provisions hereof and your or your Management
Stockholder's Estate's or Management Stockholder's Trust's, as the case may be,
willingness to execute such documents in connection therewith as may be
reasonably requested by the Selling Party.
6. In the event of a Proposed Sale pursuant to Section 1 hereof, the
Selling Party may elect, by so specifying in the Notice, to require you or your
Management
<PAGE>
4
Stockholder's Estate or Management Stockholder's Trust, as the case may be,
to, and you or your Management Stockholder's Estate or Management
Stockholder's Trust, as the case may be, will, participate in such Proposed
Sale in accordance with the terms and provisions of Section 2, 3 and 4 hereof.
7. The obligations of KKR Partners, Associates, KKR 1996 and NXS LLC
hereunder shall extend only to you or your Management Stockholder's Estate or
Management Stockholder's Trust, as the case may be, and no other of your or your
Management Stockholder's Estate's or Management Stockholder's Trust's, as the
case may be, successors or assigns shall have any rights pursuant hereto.
8. This Agreement shall terminate and be of no further force and
effect on the fifth anniversary of the first occurrence of a Public Offering (as
defined in the Stockholder's Agreement).
9. All notices and other communications provided for herein shall be
in writing and shall be deemed to have been duly given when delivered to the
party to whom it is directed:
(a) If to KKR Partners, Associates, KKR 1996 or NXS LLC, to it at the
following address:
c/o Kohlberg Kravis Roberts & Co.
2800 Sand Hill Road
Suite 200
Menlo Park, California 94025
Attn: Michael Michelson
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attn: Charles I. Cogut, Esq.
(b) If to you, to you at the address first set forth above herein;
(c) If to your Management Stockholder's Estate or Management
Stockholder's Trust, at the address provided to such parties by
such entity;
or at such other address as any of the above shall have specified by notice in
writing delivered to the others by certified mail, overnight delivery or
telecopy.
10. The laws of the State of Delaware (or if the Company
reincorporates in another state, of that state) shall govern the interpretation,
validity and performance of the
<PAGE>
5
terms of this Agreement. No suit, action or proceeding with respect to this
Agreement may be brought in any court or before any similar authority other
than in a court of competent jurisdiction in the States of Delaware (or if
the Company reincorporates in another state, of that state) or New York, as
the Selling Parties may elect in their sole discretion, and you hereby submit
to the non-exclusive jurisdiction of such courts for the purpose of such
suit, proceeding or judgment. You hereby irrevocably waive any right which
you may have had to bring such an action in any other court, domestic or
foreign, or before any similar domestic or foreign authority. You hereby
irrevocably and unconditionally waive trial by jury in any legal action or
proceeding in relation to this Agreement and for any counterclaim therein.
11. If KKR Partners, Associates, KKR 1996 or NXS LLC transfers its
interest in the Company to an affiliate of KKR Partners, Associates, KKR 1996 or
NXS LLC, as the case may be, such affiliate shall assume the obligations
hereunder of KKR Partners, Associates, KKR 1996 or NXS LLC, as the case may be.
12. Notwithstanding any other provision of this Agreement, neither
the general partner nor the limited partners, nor any future general or limited
partner of any of KKR Partners, Associates or KKR 1996, nor any member or
managing member of NXS LLC, shall have any personal liability for performance of
any obligation of such entity under this Agreement.
It is the understanding of the undersigned that you are aware that no
Proposed Sale presently is contemplated and that such a sale may never occur.
If the foregoing accurately sets forth our agreement, please
acknowledge your acceptance thereof in the space provided below for that
purpose.
Very truly yours,
KKR PARTNERS II, L.P.
By: KKR Associates (Strata) L.P.,
its General Partner
By: Strata L.L.C.,
its General Partner
By: ------------------------------
Name:
Title:
<PAGE>
6
NXS ASSOCIATES, L.P.
By: KKR Associates (NXS) L.P., its
General Partner
By: KKR-NXS L.L.C., its
General Partner
By: -------------------------------
Member
KKR 1996 FUND L.P.
By: KKR Associates 1996 L.P., its
General Partner,
By: KKR 1996 GP LLC, its
General Partner
By: ------------------------------
Member
NXS I, L.L.C.
By: KKR 1996 Fund, L.P.,
its Member
By: KKR Associates 1996 L.P.,
its General Partner,
By: KKR 1996 GP L.L.C,
its General Partner
By: ------------------------------
Member
Accepted and agreed to:
By: __________________________
__________________________
<PAGE>
Exhibit 5.1
[Amphenol Corporation Letterhead]
September 18, 1997
Amphenol Corporation
358 Hall Avenue
Wallingford, CT 06492
Ladies and Gentlemen:
I am General Counsel for Amphenol Corporation, a Delaware corporation
(the "Company"), and have advised the Company in connection with the preparation
and filing by the Company with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act"), of a Registration
Statement on Form S-8 (the "Registration Statement") relating to the issuance by
the Company of 1,200,000 shares of the Company's Common Stock, par value $.001
per share (the "Shares"), pursuant to the 1997 Option Plan for Key Employees of
Amphenol Corporation and Subsidiaries (the "1997 Plan").
I have reviewed the corporate action of the Company in connection with
the issuance and sale of the Shares and have examined, and have relied as to
matters of fact, upon originals or copies, certified or otherwise identified to
my satisfaction, of such corporate records, agreements, documents and other
instruments and such certificates or
<PAGE>
Amphenol Corporation -2- September 18, 1997
comparable documents or oral statements of public officials and of officers
and representatives of the Company, and have made such other and further
investigations as I have deemed relevant and necessary as a basis for the
opinions hereinafter set forth. In such examination, I have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as certified or
photostatic copies, and the authenticity of the originals of such latter
documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, I hereby advise you that in my opinion the issuance
of the Shares has been duly authorized and, when issued and sold as contemplated
by the 1997 Plan, such Shares will be validly issued, fully paid and
non-assessable.
I am a member of the Bar of the State of Connecticut and I do not
express any opinion herein concerning any law other than the federal laws of the
United States, the internal law of the law of the State of Connecticut and the
General Corporation Law of the State of Delaware.
This opinion is rendered to you in connection with the above described
transactions. This opinion may not be relied upon by you for any other purpose,
or relied upon by, or furnished to, any other person, firm or corporation
without my prior written consent.
<PAGE>
Amphenol Corporation -3- September 18, 1997
I hereby consent to the filing of this opinion of counsel as Exhibit
5.1 to the Registration Statement.
Very truly yours,
/s/ Edward C. Wetmore
Edward C. Wetmore
General Counsel
<PAGE>
Exhibit 23.1
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 14, 1997, except as to Note
12, which is as of January 23, 1997, relating to the Financial Statements of
Amphenol Corporation, which appears as Exhibit 22 of the Form 10-K/A.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Hartford, Connecticut
September 18, 1997
