SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
(Amendment No. ___)*
Vanstar Corporation
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(Name of issuer)
Common Stock, par value $.001 per share
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(Title of class of securities)
92208M108
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(CUSIP number)
Stephen Distler
E.M. Warburg Pincus & Co., LLC
466 Lexington Avenue
New York, New York 10017
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(Name, address and telephone number of person
authorized to receive notices and communications)
April 30, 1997
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(Date of event which requires filing of this statement)
Index to Exhibits is on Page 10
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
(Continued on Following pages)
(Page 1 of 15 Pages)
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1 The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Page 2 of 15 Pages)
<PAGE>
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CUSIP No. 92208M108 13D Page 3 of 56 Pages
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Warburg, Pincus Capital Company, L.P. IRS # 06-1183391
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |x|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
NUMBER OF 0
SHARES --------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 16,482,501
REPORTING --------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
16,482,501
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,482,501
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
38.4%
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14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
(Page 3 of 15 Pages)
<PAGE>
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CUSIP No. 92208M108 13D Page 4 of 56 Pages
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Warburg, Pincus & Co. ID # 13-6358475
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |x|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
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7 SOLE VOTING POWER
NUMBER OF 0
SHARES --------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 16,482,501
REPORTING --------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
16,482,501
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,482,501
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
38.4%
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14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
(Page 4 of 15 Pages)
<PAGE>
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CUSIP No. 92208M108 13D Page 5 of 56 Pages
---- ------
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
E.M. Warburg, Pincus & Co., LLC ID # 13-356050
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |x|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
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7 SOLE VOTING POWER
NUMBER OF 0
SHARES --------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 16,482,501
REPORTING --------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
16,482,501
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,482,501
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
38.4%
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14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
(Page 5 of 15 Pages)
<PAGE>
Item 1. Security and Issuer.
The name of the issuer with respect to which this Schedule 13D is being
filed is Vanstar Corporation (hereinafter referred to as the "Issuer"). The
address of the Issuer's principal executive offices is 5965 West Las Positas
Boulevard, Pleasanton, California 94588. This statement relates to the Issuer's
Common Stock, $.001 par value (the "Common Stock").
Item 2. Identity and Background.
(a) This Schedule 13D is being filed on behalf of Warburg, Pincus
Capital Company, L.P., a Delaware limited partnership ("WPCC"), Warburg, Pincus
& Co., a New York general partnership ("WP"), and E.M. Warburg, Pincus & Co.,
LLC, a New York limited liability company ("EMW"). WP is the sole general
partner of WPCC. EMW manages WPCC. WPCC, WP and EMW are hereinafter collectively
referred to as the "Reporting Entities." The names of the general partners of WP
and the members of EMW are listed on Schedule I hereto and are hereinafter
referred to as the "Partners". Each of the Partners disclaims beneficial
ownership (within the meaning of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") or otherwise) of the securities beneficially owned by WPCC,
WP and EMW. The Reporting Entities may be deemed to be a "group" under the
federal securities laws.
(b) The business address of each of the Reporting Entities is 466
Lexington Avenue, New York, New York 10017.
(c) The principal business of WPCC is that of a partnership engaged in
making venture capital and related investments. EMW manages WPCC. WP is the sole
general partner of WPCC and has a 20% interest in the profits of WPCC. Lionel I.
Pincus is the managing partner of WP and the managing member of EMW and may be
deemed to control both WP and EMW.
(d) None of the Reporting Entities nor, to the best of their knowledge,
any of the Partners has, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) None of the Reporting Entities nor, to the best of their knowledge,
any of the Partners has, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) Except as noted on Schedule I hereto, each of the Partners is a
United States citizen.
Item 3. Source and Amount of Funds or Other Consideration.
The source and amount of funds used to purchase the shares of Common
Stock reported herein is the partnership capital of WPCC, except that WPCC
received an aggregate of 2,793,407 shares of Common Stock upon the consummation
of the initial public offering of the
(Page 6 of 15 Pages)
<PAGE>
Common Stock under the Securities Act of 1933, as amended, in exchange for
warrants that WPCC had previously purchased with partnership capital.
Item 4. Purpose of Transactions.
The acquisition of Common Stock has been made by WPCC for investment
purposes. Although the Reporting Entities have no present intention to do so,
they may make additional purchases of Common Stock either in the open market or
in privately negotiated transactions, including transactions with the Issuer,
depending on an evaluation of the Issuer's business prospects and financial
condition, the market for the Common Stock, other available investment
opportunities, money and stock market conditions and other future developments.
Depending on these factors, WPCC may decide to sell all or part of its holdings
of the Common Stock in one or more public or private transactions. Except as set
forth in this Item 4, the Reporting Entities have no present plans or proposals
that relate to or would result in any of the actions specified in clauses (a)
through (j) of Item 4 of Schedule 13D. However, the Reporting Entities reserve
the right to propose or participate in future transactions which may result in
one or more of such actions.
Item 5. Interest in Securities of the Issuer.
(a) The Reporting Entities are deemed to have shared beneficial
ownership of 16,482,501 shares of Common Stock. Such beneficial ownership
represents 38.4% of the Common Stock.
(b) Except as set forth in Item 5(a), the Reporting Entities and the
Partners do not have either sole or shared voting power or dispositive power
with respect to shares of Common Stock.
(c) Except as for the following transactions, there have been no
transactions in respect of the Common Stock during the past 60 days which are
required to be reported in this Item 5:
Settlement Date Shares of Common Stock Acquired Price Paid Per Share
--------------- ------------------------------- --------------------
4/30/97 1,780,000 $6.75
4/28/97 82,300 $6.75
4/21/97 741,800 $6.7584
The above purchases were all acquired by WPCC through a broker on the open
market.
(d) No person other than the Reporting Entities has the right to
receive or the power to direct the receipt of dividends from or the proceeds
from the sale of Common Stock owned beneficially by the Reporting Entities.
(e) Not applicable.
(Page 7 of 15 Pages)
<PAGE>
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
The Issuer, WPCC and certain other holders of Common Stock are parties
to an Amended and Restated Registration Rights Agreement dated as of May 18,
1995 (the "Registration Agreement"), under which WPCC may require the Issuer to
register WPCC's shares of Common Stock. WPCC has entered into four option
agreements (the "Option Agreements") with Jeffrey S. Rubin, a director of the
Issuer, under which Mr. Rubin has been granted options by WPCC to purchase up to
an aggregate of 193,810 shares of Common Stock, 25,452 shares of which are
subject to purchase at $1.00 per share under an option expiring in 2005, 2,083
shares of which are subject to purchase at $1.00 per share under an option
expiring in 2000, 110,850 shares of which are subject to purchase at $4.51 per
share under an option expiring in 2005 and 55,425 shares of which are subject to
purchase at $8.12 per share under an option expiring in 2005. The options
granted under the Option Agreements become exercisable in equal monthly
installments over a 48-month period, commencing on April 1, 1995.
Item 7. Material to be Filed as Exhibits.
The Registration Rights Agreement and each of the Option Agreements are
filed herewith as an Exhibit.
(Page 8 of 15 Pages)
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
WARBURG, PINCUS CAPITAL COMPANY, L.P.
By: Warburg, Pincus & Co.,
its General Partner
By:/s/Stephen Distler
-----------------------------------
Name: Stephen Distler
Title: Partner
WARBURG, PINCUS & CO.
By:/s/Stephen Distler
-----------------------------------
Name: Stephen Distler
Title: Partner
E.M. WARBURG, PINCUS & CO., LLC
By:/s/Stephen Distler
-----------------------------------
Name: Stephen Distler
Title: Managing Director and Member
Date: May 12, 1997
(Page 9 of 15 Pages)
<PAGE>
Index to Exhibits
Registration Rights Agreement Incorporated by Reference from Exhibit 10.4
filed as part of Registration Statement on
Form S-1 (Registration No. 33-80297) filed by
Vanstar Corporation with the Securities and
Exchange Commission
Nontransferable Non-Qualified 99.1
Option Agreement dated as of
November 28, 1995, between WPCC
and Jeffrey S. Rubin ("JSR") as
to an option to purchase 25,452
shares of Common Stock.
Nontransferable Non-Qualified 99.2
Option Agreement dated as of
November 28, 1995, between WPCC
and JSR as to an option to
purchase 2,083 shares of
Common Stock.
Nontransferable Non-Qualified 99.3
Option Agreement dated as of
November 28, 1995, between WPCC
and JSR as to an option to
purchase 110,850 shares of
Common Stock.
Nontransferable Non-Qualified 99.4
Option Agreement dated as of
November 28, 1995, between WPCC
and JSR as to an option to
purchase 55,425 shares of
Common Stock.
(Page 10 of 15 Pages)
<PAGE>
SCHEDULE I
Set forth below is the name, position and present principal occupation
of each of the general partners of WP:
General Partners of WP
Present Principal Occupation in Addition to Position
Name with WP, and Positions with the Reporting Entities
- ---------------------- -----------------------------------------------------
Susan Black Managing Director and Member, EMW
Christopher W. Brody Managing Director and Member, EMW
Harold Brown Senior Managing Director and Member, EMW
Errol M. Cook Managing Director and Member, EMW
W. Bowman Cutter Managing Director and Member, EMW
Elizabeth B. Dater Managing Director and Member, EMW
Stephen Distler Managing Director, Member and Treasurer, EMW
Harold W. Ehrlich Managing Director and Member, EMW
Louis G. Elson Managing Director and Member, EMW
John L. Furth Vice Chairman of the Board and Member, EMW
Stewart K.P. Gross Managing Director and Member, EMW
Patrick T. Hackett Managing Director and Member, EMW
Jeffrey A. Harris Managing Director and Member, EMW
Robert S. Hillas Managing Director and Member, EMW
A. Michael Hoffman Managing Director and Member, EMW
William H. Janeway Managing Director and Member, EMW
Douglas M. Karp Managing Director and Member, EMW
Charles R. Kaye Managing Director and Member, EMW
Henry Kressel Managing Director and Member, EMW
Joseph P. Landy Managing Director and Member, EMW
Sidney Lapidus Managing Director and Member, EMW
Kewsong Lee Managing Director and Member, EMW
Reuben S. Leibowitz Managing Director and Member, EMW
Brady T. Lipp Managing Director and Member, EMW
Stephen J. Lurito Managing Director and Member, EMW
Spencer S. Marsh III Managing Director and Member, EMW
(Page 11 of 15 Pages)
<PAGE>
Present Principal Occupation in Addition to Position
Name with WP, and Positions with the Reporting Entities
- ---------------------- -----------------------------------------------------
Lynn C. Martin Managing Director and Member, EMW
Edward J. McKinley Managing Director and Member, EMW
Rodman W. Moorhead III Senior Managing Director and Member, EMW
Gary D. Nusbaum Managing Director and Member, EMW
Anthony G. Orphanos Managing Director and Member, EMW
Dalip Pathak Managing Director and Member, EMW
Daphine D. Philpson Managing Director and Member, EMW
Lionel I. Pincus Chairman of the Board, CEO, and Managing Director and
Member, EMW; and Managing Partner, Pincus & Co.
Eugene L. Podsiadlo Managing Director and Member, EMW
Ernst H. Pomerantz Managing Director and Member, EMW
Brian S. Posner Managing Director and Member, EMW
Arnold M. Reichman Managing Director and Member, EMW
Roger Reinlieb Managing Director and Member, EMW
John D. Santoleri Managing Director and Member, EMW
Sheila N. Scott Managing Director and Member, EMW
Peter Stalker III Managing Director and Member, EMW
David A. Tanner Managing Director and Member, EMW
James E. Thomas Managing Director and Member, EMW
John L. Vogelstein Vice Chairman of the Board and Member, EMW
Elizabeth H. Weatherman Managing Director and Member, EMW
George U. Wyper Managing Director and Member, EMW
Pincus & Co.*
NL & Co.**
- --------
* NY Limited Partnership; primary activity is ownership in WP and EMW.
** NY Limited Partnership; primary activity is ownership in WP.
(Page 12 of 15 Pages)
<PAGE>
Set forth below is the name, position and present principal occupation
of each of the members of EMW:
Present Principal Occupation in Addition to Position
Name with EMW, and Positions with the Reporting Entities
- ---------------------- -----------------------------------------------------
Susan Black Partner, WP
Christopher W. Brody Partner, WP
Harold Brown Partner, WP
Dale C. Christensen(1)
Errol M. Cook Partner, WP
W. Bowman Cutter Partner, WP
Elizabeth B. Dater Partner, WP
Stephen Distler Partner, WP
P. Nicholas Edwards(2)
Harold W. Ehrlich Partner, WP
Louis G. Elson Partner, WP
John L. Furth Partner, WP
Stewart K.P. Gross Partner, WP
Patrick T. Hackett Partner, WP
Jeffrey A. Harris Partner, WP
Robert S. Hillas Partner, WP
A. Michael Hoffman Partner, WP
William H. Janeway Partner, WP
Douglas M. Karp Partner, WP
Charles R. Kaye Partner, WP
Richard H. King(2)
Henry Kressel Partner, WP
Joseph P. Landy Partner, WP
Sidney Lapidus Partner, WP
Kewsong Lee Partner, WP
Reuben S. Leibowitz Partner, WP
- --------
(1) Citizen of Canada
(2) Citizen of United Kingdom
(Page 13 of 15 Pages)
<PAGE>
Present Principal Occupation in Addition to Position
Name with EMW, and Positions with the Reporting Entities
- ---------------------- -----------------------------------------------------
Brady T. Lipp Partner, WP
Stephen J. Lurito Partner, WP
Spencer S. Marsh III Partner, WP
Lynn C. Martin Partner, WP
Edward J. McKinley Partner, WP
Rodman W. Moorhead III Partner, WP
Howard H. Newman Partner, WP
Gary D. Nusbaum Partner, WP
Anthony G. Orphanos Partner, WP
Dalip Pathak Partner, WP
Philip C. Percival(1)
Daphine D. Philpson Partner, WP
Lionel I. Pincus Managing Partner, WP; Chairman of the Board and CEO,
EMW Managing Partner, Pincus & Co.
Eugene L. Podsiadlo Partner, WP
Ernst H. Pomerantz Partner, WP
Brian S. Posner Partner, WP
Arnold M. Reichman Partner, WP
Roger Reinlieb Partner, WP
John D. Santoleri Partner, WP
Sheila N. Scott Partner, WP
Dominic H. Shorthouse(1)
Peter Stalker III Partner, WP
Chang Q. Sun(2)
David A. Tanner Partner, WP
James E. Thomas Partner, WP
John L. Vogelstein Partner, WP
- --------
(1) Citizen of United Kingdom
(2) Citizen of People's Republic of China
(Page 14 of 15 Pages)
<PAGE>
Present Principal Occupation in Addition to Position
Name with EMW, and Positions with the Reporting Entities
- ---------------------- -----------------------------------------------------
Elizabeth H. Weatherman Partner, WP
George U. Wyper Partner, WP
Pincus & Co.*
- --------
* NY Limited Partnership; primary activity is ownership in WP and EMW.
(Page 15 of 15 Pages)
NONTRANSFERABLE NON-QUALIFIED STOCK OPTION
AGREEMENT dated as of November 28, 1995, between
WARBURG, PINCUS CAPITAL COMPANY, L.P., a Delaware
limited partnership ("WPCC"), and JEFFREY S. RUBIN (the
"Optionee", which term as used herein shall be deemed
to include any successor to the Optionee by will or by
the laws of descent and distribution, unless the
context shall otherwise require).
WPCC is the owner of 1,843,042 shares of Class A Common Stock, $.001
par value (the "Class A Common Stock"), of Vanstar Corporation, a Delaware
corporation ("Vanstar"). The Optionee is a Vice-Chairman of Vanstar. WPCC wishes
to grant to the Optionee an option to purchase up to an aggregate of 25,452
shares of Class A Common Stock owned by WPCC, upon the terms and conditions
hereinafter stated.
NOW, THEREFORE, in order to provide incentive for the Optionee to
continue to serve as a Vice-Chairman of Vanstar and to continue to work for the
best interests of Vanstar and its stockholders and in consideration of the
mutual premises and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. Option; Option Price.
WPCC hereby grants to the Optionee the option (the "Option") to
purchase, subject to the terms and conditions of this Agreement, up to an
aggregate of 25,452 shares (the "Option Shares") of Class A Common Stock owned
by WPCC, at an exercise price per share equal to $1.00 (the "Option Price").
2. Term.
The term (the "Option Term") of the Option shall commence on the date
of this Agreement and shall expire on the tenth anniversary of the date of this
Agreement.
3. Time of Exercise; Vesting.
(a) The Option shall be exercisable only as to those Option Shares that
shall have become Vested Option Shares. As of any date of determination, the
number of Option Shares that shall have become Vested Option Shares shall be
determined by multiplying the number of full calendar months elapsed from and
including April 1, 1995 through the date of determination times the Vesting
Number (as defined below). Anything contained in the immediately previous
sentence to the contrary notwithstanding, (i) all Option Shares that have not
theretofore become Vested
<PAGE>
Option Shares shall be Vested Option Shares on April 1, 1999; (ii) Option Shares
shall become Vested Option Shares upon the occurrence of a Liquidity Event (as
hereinafter defined) as contemplated by Section 3(b); and (iii) no Option Shares
shall become Vested Option Shares on and after the date of termination or
expiration of the Optionee's retention by WPCC as a consultant under the
Consulting Agreement dated as of the date hereof between WPCC and the Optionee.
(b) In the event that a Liquidity Event shall occur with respect to
WPCC or any of its affiliates, then the number of Option Shares that shall be
deemed Vested Option Shares shall be the greater of (1) that number of Vested
Option Shares determined in accordance with the second sentence of Section 3(a)
or (2) that number of Vested Option Shares determined in accordance with the
following formula with respect to all Liquidity Events that shall have occurred
with respect to WPCC and each of its affiliates on or prior to the date of
calculation:
A x (B/C)
A = the number of Option Shares
B = the cumulative number of Stipulated Securities as
to which a Liquidity Event or Liquidity Events shall
have occurred
C = the number of Stipulated Securities
(c) As used herein, the following terms shall have the following
respective meanings: "
(i) "Liquidity Event" shall mean any of the following events:
(A) the sale of Stipulated Securities or the merger or
consolidation of Vanstar with or into any other entity or entities, in
each case in which WPCC and its affiliated entities shall receive
either cash or Freely Tradeable Securities in exchange for Stipulated
Securities;
(B) the sale of any Stipulated Securities or the merger or
consolidation of Vanstar with or into any other entity or entities, in
each case in which WPCC and its affiliated entities shall receive
securities (other than Freely Tradable Securities) in exchange for
Stipulated Securities and WPCC and its affiliated entities shall
distribute such securities to its partners or stockholders, as the
case may be;
(C) the consummation of the initial public offering under
the Securities Act of 1933, as amended (the "Securities Act"), of
capital stock of Vanstar and the
2
<PAGE>
subsequent distribution of Stipulated Securities by WPCC or its
affiliated entities to its partners or stockholders, as the case may
be;
(D) the sale or other disposition of all or substantially
all of the properties and assets of Vanstar and subsidiaries thereof
(other than to any wholly-owned subsidiary of Vanstar) and the
distribution of cash or Freely Tradeable Securities received in
connection with such sale or disposition to WPCC or its affiliated
entities; or
(E) the sale or other disposition of all or substantially
all of the properties and assets of Vanstar and subsidiaries thereof
(other than to any wholly-owned subsidiary of Vanstar), the
distribution of securities (other than Freely Tradeable Securities)
received in connection with such sale or disposition to WPCC or its
affiliated entities and the subsequent distribution of such securities
by WPCC or its affiliated entities to its partners or stockholders, as
the case may be;
(ii) Freely Tradable Securities" shall mean securities of an
issuer having an aggregate market capitalization of at least
$500,000,000 which are immediately tradable by WPCC or any of its
affiliates upon receipt thereof;
(iii) "Stipulated Securities" shall mean all shares of
capital stock of Vanstar owned by WPCC or any of its affiliates on the
date hereof, including shares of Class F Preferred Stock and Class A
Common Stock of Vanstar; and
(iv) "Vesting Number" shall mean 530.25 (rounded to the
nearest whole share); provided, however, that on each date on which
any Option Shares shall become Vested Option Shares pursuant to
Section 3(b), "Vesting Number" shall mean the total number of Option
Shares that shall remain Option Shares after giving effect to the
applicable Liquidity Event triggering the vesting of Option Shares
under Section 3(b) divided by the excess of (A) 48 over (B) the total
number of full calendar months elapsed from and including April 1,
1995 to the closing date of such Liquidity Event.
4. Termination of Option.
(a) The unexercised portion of the Option shall automatically terminate
and shall become null and void and be of no further force or effect upon the
first to occur of the following:
(i) the expiration of the Option Term; or
3
<PAGE>
(ii) the date on which the Option or any part thereof or right or
privilege relating thereto is transferred (otherwise than by will or the
laws of descent or distribution), assigned, pledged, hypothecated, attached
or otherwise disposed of by the Optionee.
5. Procedure for Exercise.
(a) The Option may be exercised, from time to time, in whole or in part
(but for the purchase of whole shares only), by delivery of a written notice
(the "Notice") from the Optionee to WPCC, which Notice shall:
(i) state that the Optionee elects to exercise the Option;
(ii) state the number of Vested Option Shares with respect to
which the Option is being exercised;
(iii) state the date upon which the Optionee desires to
consummate the purchase of the Vested Option Shares (which date must be
prior to the termination of the Option Term and no later than 30 days from
the delivery of such Notice);
(iv) include any representations of the Optionee required under
Section 9(a) and;
(v) if the Option shall be exercised pursuant to Section 10 by
any person other than the Optionee, include evidence to the satisfaction of
WPCC of the right of such person to exercise the Option.
(b) Payment of the Option Price for the Vested Optioned Shares shall be
made in cash or by personal or certified check.
(c) WPCC shall use its best efforts to cause Vanstar to issue a stock
certificate in the name of the Optionee (or such other person exercising the
Option in accordance with the provisions of Section 10) for the Vested Optioned
Shares referred to in each Notice or acquired pursuant to the Conversion Right
provided for in Section 6 hereof as soon as practicable after receipt of such
Notice or the notice provided for in Section 6 and payment of the aggregate
Option Price for such Vested Option Shares, in the case of an exercise pursuant
to this Section 5.
6. Right to Convert.
(a) At any time or from time to time during the Option Term when the
Option Price shall be less than the Current Market Price (as hereinafter
defined) of a share of Class A Common Stock, the Optionee shall have the right
to convert the
4
<PAGE>
Option to acquire Vested Option Shares or any portion thereof (the "Conversion
Right"), without payment by the Optionee of the Option Price or any other
consideration, into shares of Class A Common Stock as provided in this Section
6. Upon exercise of the Conversion Right with respect to a particular number of
Vested Option Shares (the "Converted Option Shares"), the Optionee shall be
entitled to receive (without payment by the Optionee of the Option Price or any
other consideration) that number of shares of Class A Common Stock determined in
accordance with the following formula:
X - Y
-----
Z
X = the product of the Current Market Price of a share
of Class A Common Stock times the number of Converted
Option Shares, in each case as of the Conversion Date
(as defined in Section 6(b))
Y = the product of the Option Price multiplied by the
number of the Converted Option Shares, in each case as
of the Conversion Date,
Z = the Current Market Price of a share of Class A
Common Stock on the Conversion Date
No fractional Option Shares shall be issuable upon exercise of the Conversation
Right, and if the number of Option Shares to be issued determined in accordance
with the foregoing formula is other than a whole number, WPCC shall pay to
Optionee an amount in cash equal to the Current Market Price of the resulting
fractional Option Share on the Conversion Date.
(b) The Conversion Right may be exercised by the Optionee by delivery
of a written statement to WPCC specifying that the Optionee intends to exercise
the Conversion Right and indicating the number of Converted Option Shares which
are covered by the exercise of the Conversion Right. Such conversion shall be
effective upon receipt by WPCC of the aforesaid written statement, or on such
later date as is specified therein (the "Conversion Date").
(c) The term "Current Market Price" shall mean:
(i) if the Class A Common Stock is then listed on a national
securities exchange or reported on Nasdaq, the average daily closing price
per share of Class A Common Stock for the 30-day period preceding the
Conversion Date; or
5
<PAGE>
(ii) if the Class A Common Stock is not then so listed or
reported, but it is traded in the over-the-counter market, the average
daily closing bid and asked prices per share of Class A Common Stock for
the 30-day period preceding the delivery of the Conversion Date; or
(iii) if clauses (i) and (ii) shall not apply, then "Current
Market Price" shall mean the fair market value of a share of Class A Common
Stock as determined in good faith by the Board of Directors of Vanstar;
provided, however, that if the Board of Directors of Vanstar shall not make
such determination within 15 days of request by WPCC therefor, then such
determination shall be made in good faith by WPCC.
7. No Rights as a Stockholder.
The Optionee shall not have any privileges of a stockholder of Vanstar
with respect to any Option Shares until the date of issuance of a stock
certificate representing such Option Shares pursuant to Section 5(c).
8. Adjustments.
If, at any time while the Option is outstanding, the Class A Common
Stock is changed by reason of a stock split, reverse stock split, stock
dividend, conversion or recapitalization, the number and kind of Option Shares
subject to the Option and the Option Price shall be proportionately and
appropriately adjusted.
9. Additional Provisions Related to Exercise.
(a) WPCC in its discretion may, as a condition to the exercise of the
Option, require the Optionee (i) to represent in writing that the shares of the
Class A Common Stock received upon exercise of the Option are being acquired for
investment and not with a view to distribution and (ii) to make such other
representations and warranties as are deemed appropriate by counsel to WPCC. No
shares of the Class A Common Stock shall be issued and delivered upon the
exercise of the Option unless and until WPCC and/or the Optionee shall have
complied with all applicable Federal or state registration, listing and/or
qualification requirements and all other requirements of law or of any
regulatory agencies having jurisdiction.
(b) Stock certificates representing shares of the Class A Common Stock
acquired upon the exercise of the Option that have not been registered under the
Securities Act shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES
6
<PAGE>
ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES
ACT OF 1933 OR AN OPINION OF COUNSEL TO VANSTAR CORPORATION THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT."
10. Restriction on Transfer.
The Option may not be transferred, pledged, assigned, hypothecated or
otherwise disposed of in any way by the Optionee, except by will or by the laws
of descent and distribution, and may be exercised during the lifetime of the
Optionee only by the Optionee. If the Optionee dies, the Option shall thereafter
be exercisable during the Option Term by his executors or administrators to the
full extent to which the Option was exercisable by the Optionee at the time of
his death. The Option shall not be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of the Option contrary to the provisions hereof, and the levy of any
execution, attachment or similar process upon the Option, shall be null and void
and without effect.
11. Notices.
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if (i) personally delivered, (ii)
sent by nationally-recognized overnight courier or (iii) sent by registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
if to the Optionee, to the address set forth on the
signature page hereto; and
if to WPCC, to:
Warburg, Pincus Capital Company, L.P.
466 Lexington Avenue
New York, New York 10017
Attention: William H. Janeway
or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been given (i) when delivered, if
personally delivered, (ii) on the first Business Day (as hereinafter defined)
after dispatch, if sent by nationally-recognized overnight courier and (iii) on
the third Business Day following the date on which the piece of mail containing
such communication is posted, if sent by mail. As used herein, "Business Day"
means a day that is not a Saturday, Sunday or a day on which banking
institutions in the
7
<PAGE>
city to which the notice or communication is to be sent are not required to be
open.
12. No Waiver.
No waiver of any breach or condition of this Agreement shall be deemed
to be a waiver of any other or subsequent breach or condition, whether of like
or different nature.
13. Modification of Rights.
The rights of the Optionee are subject to modification and termination
in certain events as provided in this Agreement.
14. Governing Law.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware applicable to contracts made and to be wholly
performed therein.
15. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
16. Entire Agreement.
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof, and supersedes all previously written
or oral negotiations, commitments, representations and agreements with respect
thereto.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
WARBURG, PINCUS CAPITAL COMPANY, L.P.
By: Warburg, Pincus & Co.,
its General Partner
By: /s/ William H. Janeway
-------------------------------------
Name:
Title:
Optionee:
----------------------------------------
Name: Jeffrey S. Rubin
Address: 847 Sasco Hill Road
Fairfield, CT 06430
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
WARBURG, PINCUS CAPITAL COMPANY, L.P.
By: Warburg, Pincus & Co.,
its General Partner
By:-------------------------------------
Name:
Title:
Optionee:
/s/ Jeffrey S. Rubin
----------------------------------------
Name: Jeffrey S. Rubin
Address: 847 Sasco Hill Road
Fairfield, CT 06430
NONTRANSFERABLE NON-QUALIFIED STOCK OPTION
AGREEMENT dated as of November 28, 1995, between
WARBURG, PINCUS CAPITAL COMPANY, L.P., a Delaware
limited partnership ("WPCC"), and JEFFREY S. RUBIN (the
"Optionee", which term as used herein shall be deemed
to include any successor to the Optionee by will or by
the laws of descent and distribution, unless the
context shall otherwise require).
WPCC is the owner of 1,843,042 shares of Class A Common Stock, $.001
par value (the "Class A Common Stock"), of Vanstar Corporation, a Delaware
corporation ("Vanstar"). The Optionee is a Vice-Chairman of Vanstar. WPCC wishes
to grant to the Optionee an option to purchase up to an aggregate of 2,083
shares of Class A Common Stock owned by WPCC, upon the terms and conditions
hereinafter stated.
NOW, THEREFORE, in order to provide incentive for the Optionee to
continue to serve as a Vice-Chairman of Vanstar and to continue to work for the
best interests of Vanstar and its stockholders and in consideration of the
mutual premises and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. Option; Option Price.
WPCC hereby grants to the Optionee the option (the "Option") to
purchase, subject to the terms and conditions of this Agreement, up to an
aggregate of 2,083 shares (the "Option Shares") of Class A Common Stock owned by
WPCC, at an exercise price per share equal to $1.00 (the "Option Price").
2. Term.
The term (the "Option Term") of the Option shall commence on the date
of this Agreement and shall expire on August 1, 2000.
3. Time of Exercise; Vesting.
(a) The Option shall be exercisable only as to those Option Shares that
shall have become Vested Option Shares. As of any date of determination, the
number of Option Shares that shall have become Vested Option Shares shall be
determined by multiplying the number of full calendar months elapsed from and
including April 1, 1995 through the date of determination times the Vesting
Number (as defined below). Anything contained in the immediately previous
sentence to the contrary notwithstanding, (i) all Option Shares that have not
theretofore become Vested
<PAGE>
Option Shares shall be Vested Option Shares on April 1, 1999; (ii) Option Shares
shall become Vested Option Shares upon the occurrence of a Liquidity Event (as
hereinafter defined) as contemplated by Section 3(b); and (iii) no Option Shares
shall become Vested Option Shares on and after the date of termination or
expiration of the Optionee's retention by WPCC as a consultant under the
Consulting Agreement dated as of the date hereof between WPCC and the Optionee.
(b) In the event that a Liquidity Event shall occur with respect to
WPCC or any of its affiliates, then the number of Option Shares that shall be
deemed Vested Option Shares shall be the greater of (1) that number of Vested
Option Shares determined in accordance with the second sentence of Section 3(a)
or (2) that number of Vested Option Shares determined in accordance with the
following formula with respect to all Liquidity Events that shall have occurred
with respect to WPCC and each of its affiliates on or prior to the date of
calculation:
A x (B/C)
A = the number of Option Shares
B = the cumulative number of Stipulated Securities as
to which a Liquidity Event or Liquidity Events shall
have occurred
C = the number of Stipulated Securities
(c) As used herein, the following terms shall have the following
respective meanings: "
(i) "Liquidity Event" shall mean any of the following events:
(A) the sale of Stipulated Securities or the merger or
consolidation of Vanstar with or into any other entity or entities, in
each case in which WPCC and its affiliated entities shall receive
either cash or Freely Tradeable Securities in exchange for Stipulated
Securities;
(B) the sale of any Stipulated Securities or the merger or
consolidation of Vanstar with or into any other entity or entities, in
each case in which WPCC and its affiliated entities shall receive
securities (other than Freely Tradable Securities) in exchange for
Stipulated Securities and WPCC and its affiliated entities shall
distribute such securities to its partners or stockholders, as the
case may be;
(C) the consummation of the initial public offering under
the Securities Act of 1933, as amended (the "Securities Act"), of
capital stock of Vanstar and the
2
<PAGE>
subsequent distribution of Stipulated Securities by WPCC or its
affiliated entities to its partners or stockholders, as the case may
be;
(D) the sale or other disposition of all or substantially
all of the properties and assets of Vanstar and subsidiaries thereof
(other than to any wholly-owned subsidiary of Vanstar) and the
distribution of cash or Freely Tradeable Securities received in
connection with such sale or disposition to WPCC or its affiliated
entities; or
(E) the sale or other disposition of all or substantially
all of the properties and assets of Vanstar and subsidiaries thereof
(other than to any wholly-owned subsidiary of Vanstar), the
distribution of securities (other than Freely Tradeable Securities)
received in connection with such sale or disposition to WPCC or its
affiliated entities and the subsequent distribution of such securities
by WPCC or its affiliated entities to its partners or stockholders, as
the case may be;
(ii) Freely Tradable Securities" shall mean securities of an
issuer having an aggregate market capitalization of at least
$500,000,000 which are immediately tradable by WPCC or any of its
affiliates upon receipt thereof;
(iii) "Stipulated Securities" shall mean all shares of
capital stock of Vanstar owned by WPCC or any of its affiliates on the
date hereof, including shares of Class F Preferred Stock and Class A
Common Stock of Vanstar; and
(iv) "Vesting Number" shall mean 43.40 (rounded to the
nearest whole share); provided, however, that on each date on which
any Option Shares shall become Vested Option Shares pursuant to
Section 3(b), "Vesting Number" shall mean the total number of Option
Shares that shall remain Option Shares after giving effect to the
applicable Liquidity Event triggering the vesting of Option Shares
under Section 3(b) divided by the excess of (A) 48 over (B) the total
number of full calendar months elapsed from and including April 1,
1995 to the closing date of such Liquidity Event.
4. Termination of Option.
(a) The unexercised portion of the Option shall automatically terminate
and shall become null and void and be of no further force or effect upon the
first to occur of the following:
(i) the expiration of the Option Term; or
3
<PAGE>
(ii) the date on which the Option or any part thereof or right or
privilege relating thereto is transferred (otherwise than by will or the
laws of descent or distribution), assigned, pledged, hypothecated, attached
or otherwise disposed of by the Optionee.
5. Procedure for Exercise.
(a) The Option may be exercised, from time to time, in whole or
in part (but for the purchase of whole shares only), by delivery of a
written notice (the "Notice") from the Optionee to WPCC, which Notice
shall:
(i) state that the Optionee elects to exercise the Option;
(ii) state the number of Vested Option Shares with respect to
which the Option is being exercised;
(iii) state the date upon which the Optionee desires to
consummate the purchase of the Vested Option Shares (which date must be
prior to the termination of the Option Term and no later than 30 days from
the delivery of such Notice);
(iv) include any representations of the Optionee required under
Section 9(a) and;
(v) if the Option shall be exercised pursuant to Section 10 by
any person other than the Optionee, include evidence to the satisfaction of
WPCC of the right of such person to exercise the Option.
(b) Payment of the Option Price for the Vested Optioned Shares shall be
made in cash or by personal or certified check.
(c) WPCC shall use its best efforts to cause Vanstar to issue a stock
certificate in the name of the Optionee (or such other person exercising the
Option in accordance with the provisions of Section 10) for the Vested Optioned
Shares referred to in each Notice or acquired pursuant to the Conversion Right
provided for in Section 6 hereof as soon as practicable after receipt of such
Notice or the notice provided for in Section 6 and payment of the aggregate
Option Price for such Vested Option Shares, in the case of an exercise pursuant
to this Section 5.
6. Right to Convert.
(a) At any time or from time to time during the Option Term when the
Option Price shall be less than the Current Market Price (as hereinafter
defined) of a share of Class A Common Stock, the Optionee shall have the right
to convert the
4
<PAGE>
Option to acquire Vested Option Shares or any portion thereof (the "Conversion
Right"), without payment by the Optionee of the Option Price or any other
consideration, into shares of Class A Common Stock as provided in this Section
6. Upon exercise of the Conversion Right with respect to a particular number of
Vested Option Shares (the "Converted Option Shares"), the Optionee shall be
entitled to receive (without payment by the Optionee of the Option Price or any
other consideration) that number of shares of Class A Common Stock determined in
accordance with the following formula:
X - Y
-----
Z
X = the product of the Current Market Price of a share
of Class A Common Stock times the number of Converted
Option Shares, in each case as of the Conversion Date
(as defined in Section 6(b))
Y = the product of the Option Price multiplied by the
number of the Converted Option Shares, in each case as
of the Conversion Date,
Z = the Current Market Price of a share of Class A
Common Stock on the Conversion Date
No fractional Option Shares shall be issuable upon exercise of the Conversation
Right, and if the number of Option Shares to be issued determined in accordance
with the foregoing formula is other than a whole number, WPCC shall pay to
Optionee an amount in cash equal to the Current Market Price of the resulting
fractional Option Share on the Conversion Date.
(b) The Conversion Right may be exercised by the Optionee by delivery
of a written statement to WPCC specifying that the Optionee intends to exercise
the Conversion Right and indicating the number of Converted Option Shares which
are covered by the exercise of the Conversion Right. Such conversion shall be
effective upon receipt by WPCC of the aforesaid written statement, or on such
later date as is specified therein (the "Conversion Date").
(c) The term "Current Market Price" shall mean:
(i) if the Class A Common Stock is then listed on a national
securities exchange or reported on Nasdaq, the average daily closing price
per share of Class A Common Stock for the 30-day period preceding the
Conversion Date; or
5
<PAGE>
(ii) if the Class A Common Stock is not then so listed or
reported, but it is traded in the over-the-counter market, the average
daily closing bid and asked prices per share of Class A Common Stock for
the 30-day period preceding the delivery of the Conversion Date; or
(iii) if clauses (i) and (ii) shall not apply, then "Current
Market Price" shall mean the fair market value of a share of Class A Common
Stock as determined in good faith by the Board of Directors of Vanstar;
provided, however, that if the Board of Directors of Vanstar shall not make
such determination within 15 days of request by WPCC therefor, then such
determination shall be made in good faith by WPCC.
7. No Rights as a Stockholder.
The Optionee shall not have any privileges of a stockholder of Vanstar
with respect to any Option Shares until the date of issuance of a stock
certificate representing such Option Shares pursuant to Section 5(c).
8. Adjustments.
If, at any time while the Option is outstanding, the Class A Common
Stock is changed by reason of a stock split, reverse stock split, stock
dividend, conversion or recapitalization, the number and kind of Option Shares
subject to the Option and the Option Price shall be proportionately and
appropriately adjusted.
9. Additional Provisions Related to Exercise.
(a) WPCC in its discretion may, as a condition to the exercise of the
Option, require the Optionee (i) to represent in writing that the shares of the
Class A Common Stock received upon exercise of the Option are being acquired for
investment and not with a view to distribution and (ii) to make such other
representations and warranties as are deemed appropriate by counsel to WPCC. No
shares of the Class A Common Stock shall be issued and delivered upon the
exercise of the Option unless and until WPCC and/or the Optionee shall have
complied with all applicable Federal or state registration, listing and/or
qualification requirements and all other requirements of law or of any
regulatory agencies having jurisdiction.
(b) Stock certificates representing shares of the Class A Common Stock
acquired upon the exercise of the Option that have not been registered under the
Securities Act shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES
6
<PAGE>
ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES
ACT OF 1933 OR AN OPINION OF COUNSEL TO VANSTAR CORPORATION THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT."
10. Restriction on Transfer.
The Option may not be transferred, pledged, assigned, hypothecated or
otherwise disposed of in any way by the Optionee, except by will or by the laws
of descent and distribution, and may be exercised during the lifetime of the
Optionee only by the Optionee. If the Optionee dies, the Option shall thereafter
be exercisable during the Option Term by his executors or administrators to the
full extent to which the Option was exercisable by the Optionee at the time of
his death. The Option shall not be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of the Option contrary to the provisions hereof, and the levy of any
execution, attachment or similar process upon the Option, shall be null and void
and without effect.
11. Notices.
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if (i) personally delivered, (ii)
sent by nationally-recognized overnight courier or (iii) sent by registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
if to the Optionee, to the address set forth on the
signature page hereto; and
if to WPCC, to:
Warburg, Pincus Capital Company, L.P.
466 Lexington Avenue
New York, New York 10017
Attention: William H. Janeway
or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been given (i) when delivered, if
personally delivered, (ii) on the first Business Day (as hereinafter defined)
after dispatch, if sent by nationally-recognized overnight courier and (iii) on
the third Business Day following the date on which the piece of mail containing
such communication is posted, if sent by mail. As used herein, "Business Day"
means a day that is not a Saturday, Sunday or a day on which banking
institutions in the
7
<PAGE>
city to which the notice or communication is to be sent are not required to be
open.
12. No Waiver.
No waiver of any breach or condition of this Agreement shall be deemed
to be a waiver of any other or subsequent breach or condition, whether of like
or different nature.
13. Modification of Rights.
The rights of the Optionee are subject to modification and termination
in certain events as provided in this Agreement.
14. Governing Law.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware applicable to contracts made and to be wholly
performed therein.
15. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
16. Entire Agreement.
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof, and supersedes all previously written
or oral negotiations, commitments, representations and agreements with respect
thereto.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
WARBURG, PINCUS CAPITAL COMPANY, L.P.
By: Warburg, Pincus & Co.,
its General Partner
By: /s/ William H. Janeway
-------------------------------------
Name:
Title:
Optionee:
----------------------------------------
Name: Jeffrey S. Rubin
Address: 847 Sasco Hill Road
Fairfield, CT 06430
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
WARBURG, PINCUS CAPITAL COMPANY, L.P.
By: Warburg, Pincus & Co.,
its General Partner
By:
-------------------------------------
Name:
Title:
Optionee:
/s/ Jeffrey S. Rubin
----------------------------------------
Name: Jeffrey S. Rubin
Address: 847 Sasco Hill Road
Fairfield, CT 06430
NONTRANSFERABLE NON-QUALIFIED STOCK OPTION
AGREEMENT dated as of November 28, 1995, between
WARBURG, PINCUS CAPITAL COMPANY, L.P., a Delaware
limited partnership ("WPCC"), and JEFFREY S. RUBIN (the
"Optionee", which term as used herein shall be deemed
to include any successor to the Optionee by will or by
the laws of descent and distribution, unless the
context shall otherwise require).
WPCC is the owner of 1,843,042 shares of Class A Common Stock, $.001
par value (the "Class A Common Stock"), of Vanstar Corporation, a Delaware
corporation ("Vanstar"). The Optionee is a Vice-Chairman of Vanstar. WPCC wishes
to grant to the Optionee an option to purchase up to an aggregate of 110,850
shares of Class A Common Stock owned by WPCC, upon the terms and conditions
hereinafter stated.
NOW, THEREFORE, in order to provide incentive for the Optionee to
continue to serve as a Vice-Chairman of Vanstar and to continue to work for the
best interests of Vanstar and its stockholders and in consideration of the
mutual premises and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. Option; Option Price.
WPCC hereby grants to the Optionee the option (the "Option") to
purchase, subject to the terms and conditions of this Agreement, up to an
aggregate of 110,850 shares (the "Option Shares") of Class A Common Stock owned
by WPCC, at an exercise price per share equal to $4.51 (the "Option Price").
2. Term.
The term (the "Option Term") of the Option shall commence on the date
of this Agreement and shall expire on the tenth anniversary of the date of this
Agreement.
3. Time of Exercise; Vesting.
(a) The Option shall be exercisable only as to those Option Shares that
shall have become Vested Option Shares. As of any date of determination, the
number of Option Shares that shall have become Vested Option Shares shall be
determined by multiplying the number of full calendar months elapsed from and
including April 1, 1995 through the date of determination times the Vesting
Number (as defined below). Anything contained in the immediately previous
sentence to the contrary notwithstanding, (i) all Option Shares that have not
theretofore become Vested
<PAGE>
Option Shares shall be Vested Option Shares on April 1, 1999; (ii) Option Shares
shall become Vested Option Shares upon the occurrence of a Liquidity Event (as
hereinafter defined) as contemplated by Section 3(b); and (iii) no Option Shares
shall become Vested Option Shares on and after the date of termination or
expiration of the Optionee's retention by WPCC as a consultant under the
Consulting Agreement dated as of the date hereof between WPCC and the Optionee.
(b) In the event that a Liquidity Event shall occur with respect to
WPCC or any of its affiliates, then the number of Option Shares that shall be
deemed Vested Option Shares shall be the greater of (1) that number of Vested
Option Shares determined in accordance with the second sentence of Section 3(a)
or (2) that number of Vested Option Shares determined in accordance with the
following formula with respect to all Liquidity Events that shall have occurred
with respect to WPCC and each of its affiliates on or prior to the date of
calculation:
A x (B/C)
A = the number of Option Shares
B = the cumulative number of Stipulated Securities as
to which a Liquidity Event or Liquidity Events shall
have occurred
C = the number of Stipulated Securities
(c) As used herein, the following terms shall have the following
respective meanings: "
(i) "Liquidity Event" shall mean any of the following events:
(A) the sale of Stipulated Securities or the merger or
consolidation of Vanstar with or into any other entity or entities, in
each case in which WPCC and its affiliated entities shall receive
either cash or Freely Tradeable Securities in exchange for Stipulated
Securities;
(B) the sale of any Stipulated Securities or the merger or
consolidation of Vanstar with or into any other entity or entities, in
each case in which WPCC and its affiliated entities shall receive
securities (other than Freely Tradable Securities) in exchange for
Stipulated Securities and WPCC and its affiliated entities shall
distribute such securities to its partners or stockholders, as the
case may be;
(C) the consummation of the initial public offering under
the Securities Act of 1933, as amended (the "Securities Act"), of
capital stock of Vanstar and the
2
<PAGE>
subsequent distribution of Stipulated Securities by WPCC or its
affiliated entities to its partners or stockholders, as the case may
be;
(D) the sale or other disposition of all or substantially
all of the properties and assets of Vanstar and subsidiaries thereof
(other than to any wholly-owned subsidiary of Vanstar) and the
distribution of cash or Freely Tradeable Securities received in
connection with such sale or disposition to WPCC or its affiliated
entities; or
(E) the sale or other disposition of all or substantially
all of the properties and assets of Vanstar and subsidiaries thereof
(other than to any wholly-owned subsidiary of Vanstar), the
distribution of securities (other than Freely Tradeable Securities)
received in connection with such sale or disposition to WPCC or its
affiliated entities and the subsequent distribution of such securities
by WPCC or its affiliated entities to its partners or stockholders, as
the case may be;
(ii) Freely Tradable Securities" shall mean securities of an
issuer having an aggregate market capitalization of at least
$500,000,000 which are immediately tradable by WPCC or any of its
affiliates upon receipt thereof;
(iii) "Stipulated Securities" shall mean all shares of
capital stock of Vanstar owned by WPCC or any of its affiliates on the
date hereof, including shares of Class F Preferred Stock and Class A
Common Stock of Vanstar; and
(iv) "Vesting Number" shall mean 2,309.38 (rounded to the
nearest whole share); provided, however, that on each date on which
any Option Shares shall become Vested Option Shares pursuant to
Section 3(b), "Vesting Number" shall mean the total number of Option
Shares that shall remain Option Shares after giving effect to the
applicable Liquidity Event triggering the vesting of Option Shares
under Section 3(b) divided by the excess of (A) 48 over (B) the total
number of full calendar months elapsed from and including April 1,
1995 to the closing date of such Liquidity Event.
4. Termination of Option.
(a) The unexercised portion of the Option shall automatically terminate
and shall become null and void and be of no further force or effect upon the
first to occur of the following:
(i) the expiration of the Option Term; or
3
<PAGE>
(ii) the date on which the Option or any part thereof or right or
privilege relating thereto is transferred (otherwise than by will or
the laws of descent or distribution), assigned, pledged, hypothecated,
attached or otherwise disposed of by the Optionee.
5. Procedure for Exercise.
(a) The Option may be exercised, from time to time, in whole or in part
(but for the purchase of whole shares only), by delivery of a written notice
(the "Notice") from the Optionee to WPCC, which Notice shall:
(i) state that the Optionee elects to exercise the Option;
(ii) state the number of Vested Option Shares with respect to
which the Option is being exercised;
(iii) state the date upon which the Optionee desires to
consummate the purchase of the Vested Option Shares (which date must
be prior to the termination of the Option Term and no later than 30
days from the delivery of such Notice);
(iv) include any representations of the Optionee required under
Section 9(a) and;
(v) if the Option shall be exercised pursuant to Section 10 by
any person other than the Optionee, include evidence to the
satisfaction of WPCC of the right of such person to exercise the
Option.
(b) Payment of the Option Price for the Vested Optioned Shares shall be
made in cash or by personal or certified check.
(c) WPCC shall use its best efforts to cause Vanstar to issue a stock
certificate in the name of the Optionee (or such other person exercising the
Option in accordance with the provisions of Section 10) for the Vested Optioned
Shares referred to in each Notice or acquired pursuant to the Conversion Right
provided for in Section 6 hereof as soon as practicable after receipt of such
Notice or the notice provided for in Section 6 and payment of the aggregate
Option Price for such Vested Option Shares, in the case of an exercise pursuant
to this Section 5.
6. Right to Convert.
(a) At any time or from time to time during the Option Term when the
Option Price shall be less than the Current Market Price (as hereinafter
defined) of a share of Class A Common Stock, the Optionee shall have the right
to convert the
4
<PAGE>
Option to acquire Vested Option Shares or any portion thereof (the "Conversion
Right"), without payment by the Optionee of the Option Price or any other
consideration, into shares of Class A Common Stock as provided in this Section
6. Upon exercise of the Conversion Right with respect to a particular number of
Vested Option Shares (the "Converted Option Shares"), the Optionee shall be
entitled to receive (without payment by the Optionee of the Option Price or any
other consideration) that number of shares of Class A Common Stock determined in
accordance with the following formula:
X - Y
-----
Z
X = the product of the Current Market Price of a share
of Class A Common Stock times the number of Converted
Option Shares, in each case as of the Conversion Date
(as defined in Section 6(b))
Y = the product of the Option Price multiplied by the
number of the Converted Option Shares, in each case as
of the Conversion Date,
Z = the Current Market Price of a share of Class A
Common Stock on the Conversion Date
No fractional Option Shares shall be issuable upon exercise of the Conversation
Right, and if the number of Option Shares to be issued determined in accordance
with the foregoing formula is other than a whole number, WPCC shall pay to
Optionee an amount in cash equal to the Current Market Price of the resulting
fractional Option Share on the Conversion Date.
(b) The Conversion Right may be exercised by the Optionee by delivery
of a written statement to WPCC specifying that the Optionee intends to exercise
the Conversion Right and indicating the number of Converted Option Shares which
are covered by the exercise of the Conversion Right. Such conversion shall be
effective upon receipt by WPCC of the aforesaid written statement, or on such
later date as is specified therein (the "Conversion Date").
(c) The term "Current Market Price" shall mean:
(i) if the Class A Common Stock is then listed on a national
securities exchange or reported on Nasdaq, the average daily closing
price per share of Class A Common Stock for the 30-day period
preceding the Conversion Date; or
5
<PAGE>
(ii) if the Class A Common Stock is not then so listed or
reported, but it is traded in the over-the-counter market, the average
daily closing bid and asked prices per share of Class A Common Stock
for the 30-day period preceding the delivery of the Conversion Date;
or
(iii) if clauses (i) and (ii) shall not apply, then "Current
Market Price" shall mean the fair market value of a share of Class A
Common Stock as determined in good faith by the Board of Directors of
Vanstar; provided, however, that if the Board of Directors of Vanstar
shall not make such determination within 15 days of request by WPCC
therefor, then such determination shall be made in good faith by WPCC.
7. No Rights as a Stockholder.
The Optionee shall not have any privileges of a stockholder of Vanstar
with respect to any Option Shares until the date of issuance of a stock
certificate representing such Option Shares pursuant to Section 5(c).
8. Adjustments.
If, at any time while the Option is outstanding, the Class A Common
Stock is changed by reason of a stock split, reverse stock split, stock
dividend, conversion or recapitalization, the number and kind of Option Shares
subject to the Option and the Option Price shall be proportionately and
appropriately adjusted.
9. Additional Provisions Related to Exercise.
(a) WPCC in its discretion may, as a condition to the exercise of the
Option, require the Optionee (i) to represent in writing that the shares of the
Class A Common Stock received upon exercise of the Option are being acquired for
investment and not with a view to distribution and (ii) to make such other
representations and warranties as are deemed appropriate by counsel to WPCC. No
shares of the Class A Common Stock shall be issued and delivered upon the
exercise of the Option unless and until WPCC and/or the Optionee shall have
complied with all applicable Federal or state registration, listing and/or
qualification requirements and all other requirements of law or of any
regulatory agencies having jurisdiction.
(b) Stock certificates representing shares of the Class A Common Stock
acquired upon the exercise of the Option that have not been registered under the
Securities Act shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES
6
<PAGE>
ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES
ACT OF 1933 OR AN OPINION OF COUNSEL TO VANSTAR CORPORATION THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT."
10. Restriction on Transfer.
The Option may not be transferred, pledged, assigned, hypothecated or
otherwise disposed of in any way by the Optionee, except by will or by the laws
of descent and distribution, and may be exercised during the lifetime of the
Optionee only by the Optionee. If the Optionee dies, the Option shall thereafter
be exercisable during the Option Term by his executors or administrators to the
full extent to which the Option was exercisable by the Optionee at the time of
his death. The Option shall not be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of the Option contrary to the provisions hereof, and the levy of any
execution, attachment or similar process upon the Option, shall be null and void
and without effect.
11. Notices.
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if (i) personally delivered, (ii)
sent by nationally-recognized overnight courier or (iii) sent by registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
if to the Optionee, to the address set forth on the signature
page hereto; and
if to WPCC, to:
Warburg, Pincus Capital Company, L.P.
466 Lexington Avenue
New York, New York 10017
Attention: William H. Janeway
or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been given (i) when delivered, if
personally delivered, (ii) on the first Business Day (as hereinafter defined)
after dispatch, if sent by nationally-recognized overnight courier and (iii) on
the third Business Day following the date on which the piece of mail containing
such communication is posted, if sent by mail. As used herein, "Business Day"
means a day that is not a Saturday, Sunday or a day on which banking
institutions in the
7
<PAGE>
city to which the notice or communication is to be sent are not required to be
open.
12. No Waiver.
No waiver of any breach or condition of this Agreement shall be deemed
to be a waiver of any other or subsequent breach or condition, whether of like
or different nature.
13. Modification of Rights.
The rights of the Optionee are subject to modification and termination
in certain events as provided in this Agreement.
14. Governing Law.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware applicable to contracts made and to be wholly
performed therein.
15. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
16. Entire Agreement.
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof, and supersedes all previously written
or oral negotiations, commitments, representations and agreements with respect
thereto.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
WARBURG, PINCUS CAPITAL COMPANY, L.P.
By: Warburg, Pincus & Co.,
its General Partner
By: /s/ William H. Janeway
-----------------------------------
Name:
Title:
Optionee:
--------------------------------------
Name: Jeffrey S. Rubin
Address: 847 Sasco Hill Road
Fairfield, CT 06430
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
WARBURG, PINCUS CAPITAL COMPANY, L.P.
By: Warburg, Pincus & Co.,
its General Partner
By:
-----------------------------------
Name:
Title:
Optionee:
/s/ Jeffrey S. Rubin
--------------------------------------
Name: Jeffrey S. Rubin
Address: 847 Sasco Hill Road
Fairfield, CT 06430
NONTRANSFERABLE NON-QUALIFIED STOCK OPTION
AGREEMENT dated as of November 28, 1995, between
WARBURG, PINCUS CAPITAL COMPANY, L.P., a Delaware
limited partnership ("WPCC"), and JEFFREY S. RUBIN (the
"Optionee", which term as used herein shall be deemed
to include any successor to the Optionee by will or by
the laws of descent and distribution, unless the
context shall otherwise require).
WPCC is the owner of 1,843,042 shares of Class A Common Stock, $.001
par value (the "Class A Common Stock"), of Vanstar Corporation, a Delaware
corporation ("Vanstar"). The Optionee is a Vice-Chairman of Vanstar. WPCC wishes
to grant to the Optionee an option to purchase up to an aggregate of 55,425
shares of Class A Common Stock owned by WPCC, upon the terms and conditions
hereinafter stated.
NOW, THEREFORE, in order to provide incentive for the Optionee to
continue to serve as a Vice-Chairman of Vanstar and to continue to work for the
best interests of Vanstar and its stockholders and in consideration of the
mutual premises and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. Option; Option Price.
WPCC hereby grants to the Optionee the option (the "Option") to
purchase, subject to the terms and conditions of this Agreement, up to an
aggregate of 55,425 shares (the "Option Shares") of Class A Common Stock owned
by WPCC, at an exercise price per share equal to $8.12 (the "Option Price").
2. Term.
The term (the "Option Term") of the Option shall commence on the date
of this Agreement and shall expire on the tenth anniversary of the date of this
Agreement.
3. Time of Exercise; Vesting.
(a) The Option shall be exercisable only as to those Option Shares that
shall have become Vested Option Shares. As of any date of determination, the
number of Option Shares that shall have become Vested Option Shares shall be
determined by multiplying the number of full calendar months elapsed from and
including April 1, 1995 through the date of determination times the Vesting
Number (as defined below). Anything contained in the immediately previous
sentence to the contrary notwithstanding, (i) all Option Shares that have not
theretofore become Vested
<PAGE>
Option Shares shall be Vested Option Shares on April 1, 1999; (ii) Option Shares
shall become Vested Option Shares upon the occurrence of a Liquidity Event (as
hereinafter defined) as contemplated by Section 3(b); and (iii) no Option Shares
shall become Vested Option Shares on and after the date of termination or
expiration of the Optionee's retention by WPCC as a consultant under the
Consulting Agreement dated as of the date hereof between WPCC and the Optionee.
(b) In the event that a Liquidity Event shall occur with respect to
WPCC or any of its affiliates, then the number of Option Shares that shall be
deemed Vested Option Shares shall be the greater of (1) that number of Vested
Option Shares determined in accordance with the second sentence of Section 3(a)
or (2) that number of Vested Option Shares determined in accordance with the
following formula with respect to all Liquidity Events that shall have occurred
with respect to WPCC and each of its affiliates on or prior to the date of
calculation:
A x (B/C)
A = the number of Option Shares
B = the cumulative number of Stipulated Securities as
to which a Liquidity Event or Liquidity Events shall
have occurred
C = the number of Stipulated Securities
(c) As used herein, the following terms shall have the following
respective meanings: "
(i) "Liquidity Event" shall mean any of the following events:
(A) the sale of Stipulated Securities or the merger or
consolidation of Vanstar with or into any other entity or entities, in
each case in which WPCC and its affiliated entities shall receive
either cash or Freely Tradeable Securities in exchange for Stipulated
Securities;
(B) the sale of any Stipulated Securities or the merger or
consolidation of Vanstar with or into any other entity or entities, in
each case in which WPCC and its affiliated entities shall receive
securities (other than Freely Tradable Securities) in exchange for
Stipulated Securities and WPCC and its affiliated entities shall
distribute such securities to its partners or stockholders, as the
case may be;
(C) the consummation of the initial public offering under
the Securities Act of 1933, as amended (the "Securities Act"), of
capital stock of Vanstar and the
2
<PAGE>
subsequent distribution of Stipulated Securities by WPCC or its
affiliated entities to its partners or stockholders, as the case may
be;
(D) the sale or other disposition of all or substantially
all of the properties and assets of Vanstar and subsidiaries thereof
(other than to any wholly-owned subsidiary of Vanstar) and the
distribution of cash or Freely Tradeable Securities received in
connection with such sale or disposition to WPCC or its affiliated
entities; or
(E) the sale or other disposition of all or substantially
all of the properties and assets of Vanstar and subsidiaries thereof
(other than to any wholly-owned subsidiary of Vanstar), the
distribution of securities (other than Freely Tradeable Securities)
received in connection with such sale or disposition to WPCC or its
affiliated entities and the subsequent distribution of such securities
by WPCC or its affiliated entities to its partners or stockholders, as
the case may be;
(ii) Freely Tradable Securities" shall mean securities of an
issuer having an aggregate market capitalization of at least
$500,000,000 which are immediately tradable by WPCC or any of its
affiliates upon receipt thereof;
(iii) "Stipulated Securities" shall mean all shares of
capital stock of Vanstar owned by WPCC or any of its affiliates on the
date hereof, including shares of Class F Preferred Stock and Class A
Common Stock of Vanstar; and
(iv) "Vesting Number" shall mean 1,154.69 (rounded to the
nearest whole share); provided, however, that on each date on which
any Option Shares shall become Vested Option Shares pursuant to
Section 3(b), "Vesting Number" shall mean the total number of Option
Shares that shall remain Option Shares after giving effect to the
applicable Liquidity Event triggering the vesting of Option Shares
under Section 3(b) divided by the excess of (A) 48 over (B) the total
number of full calendar months elapsed from and including April 1,
1995 to the closing date of such Liquidity Event.
4. Termination of Option.
(a) The unexercised portion of the Option shall automatically terminate
and shall become null and void and be of no further force or effect upon the
first to occur of the following:
(i) the expiration of the Option Term; or
3
<PAGE>
(ii) the date on which the Option or any part thereof or right or
privilege relating thereto is transferred (otherwise than by will or the
laws of descent or distribution), assigned, pledged, hypothecated, attached
or otherwise disposed of by the Optionee.
5. Procedure for Exercise.
(a) The Option may be exercised, from time to time, in whole or in part
(but for the purchase of whole shares only), by delivery of a written notice
(the "Notice") from the Optionee to WPCC, which Notice shall:
(i) state that the Optionee elects to exercise the Option;
(ii) state the number of Vested Option Shares with respect to
which the Option is being exercised;
(iii) state the date upon which the Optionee desires to
consummate the purchase of the Vested Option Shares (which date must be
prior to the termination of the Option Term and no later than 30 days from
the delivery of such Notice);
(iv) include any representations of the Optionee required under
Section 9(a) and;
(v) if the Option shall be exercised pursuant to Section 10 by
any person other than the Optionee, include evidence to the satisfaction of
WPCC of the right of such person to exercise the Option.
(b) Payment of the Option Price for the Vested Optioned Shares shall be
made in cash or by personal or certified check.
(c) WPCC shall use its best efforts to cause Vanstar to issue a stock
certificate in the name of the Optionee (or such other person exercising the
Option in accordance with the provisions of Section 10) for the Vested Optioned
Shares referred to in each Notice or acquired pursuant to the Conversion Right
provided for in Section 6 hereof as soon as practicable after receipt of such
Notice or the notice provided for in Section 6 and payment of the aggregate
Option Price for such Vested Option Shares, in the case of an exercise pursuant
to this Section 5.
6. Right to Convert.
(a) At any time or from time to time during the Option Term when the
Option Price shall be less than the Current Market Price (as hereinafter
defined) of a share of Class A Common Stock, the Optionee shall have the right
to convert the
4
<PAGE>
Option to acquire Vested Option Shares or any portion thereof (the "Conversion
Right"), without payment by the Optionee of the Option Price or any other
consideration, into shares of Class A Common Stock as provided in this Section
6. Upon exercise of the Conversion Right with respect to a particular number of
Vested Option Shares (the "Converted Option Shares"), the Optionee shall be
entitled to receive (without payment by the Optionee of the Option Price or any
other consideration) that number of shares of Class A Common Stock determined in
accordance with the following formula:
X - Y
-----
Z
X = the product of the Current Market Price of a share
of Class A Common Stock times the number of Converted
Option Shares, in each case as of the Conversion Date
(as defined in Section 6(b))
Y = the product of the Option Price multiplied by the
number of the Converted Option Shares, in each case as
of the Conversion Date,
Z = the Current Market Price of a share of Class A
Common Stock on the Conversion Date
No fractional Option Shares shall be issuable upon exercise of the Conversation
Right, and if the number of Option Shares to be issued determined in accordance
with the foregoing formula is other than a whole number, WPCC shall pay to
Optionee an amount in cash equal to the Current Market Price of the resulting
fractional Option Share on the Conversion Date.
(b) The Conversion Right may be exercised by the Optionee by delivery
of a written statement to WPCC specifying that the Optionee intends to exercise
the Conversion Right and indicating the number of Converted Option Shares which
are covered by the exercise of the Conversion Right. Such conversion shall be
effective upon receipt by WPCC of the aforesaid written statement, or on such
later date as is specified therein (the "Conversion Date").
(c) The term "Current Market Price" shall mean:
(i) if the Class A Common Stock is then listed on a national
securities exchange or reported on Nasdaq, the average daily closing price
per share of Class A Common Stock for the 30-day period preceding the
Conversion Date; or
5
<PAGE>
(ii) if the Class A Common Stock is not then so listed or
reported, but it is traded in the over-the-counter market, the average
daily closing bid and asked prices per share of Class A Common Stock for
the 30-day period preceding the delivery of the Conversion Date; or
(iii) if clauses (i) and (ii) shall not apply, then "Current
Market Price" shall mean the fair market value of a share of Class A Common
Stock as determined in good faith by the Board of Directors of Vanstar;
provided, however, that if the Board of Directors of Vanstar shall not make
such determination within 15 days of request by WPCC therefor, then such
determination shall be made in good faith by WPCC.
7. No Rights as a Stockholder.
The Optionee shall not have any privileges of a stockholder of Vanstar
with respect to any Option Shares until the date of issuance of a stock
certificate representing such Option Shares pursuant to Section 5(c).
8. Adjustments.
If, at any time while the Option is outstanding, the Class A Common
Stock is changed by reason of a stock split, reverse stock split, stock
dividend, conversion or recapitalization, the number and kind of Option Shares
subject to the Option and the Option Price shall be proportionately and
appropriately adjusted.
9. Additional Provisions Related to Exercise.
(a) WPCC in its discretion may, as a condition to the exercise of the
Option, require the Optionee (i) to represent in writing that the shares of the
Class A Common Stock received upon exercise of the Option are being acquired for
investment and not with a view to distribution and (ii) to make such other
representations and warranties as are deemed appropriate by counsel to WPCC. No
shares of the Class A Common Stock shall be issued and delivered upon the
exercise of the Option unless and until WPCC and/or the Optionee shall have
complied with all applicable Federal or state registration, listing and/or
qualification requirements and all other requirements of law or of any
regulatory agencies having jurisdiction.
(b) Stock certificates representing shares of the Class A Common Stock
acquired upon the exercise of the Option that have not been registered under the
Securities Act shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES
6
<PAGE>
ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES
ACT OF 1933 OR AN OPINION OF COUNSEL TO VANSTAR CORPORATION THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT."
10. Restriction on Transfer.
The Option may not be transferred, pledged, assigned, hypothecated or
otherwise disposed of in any way by the Optionee, except by will or by the laws
of descent and distribution, and may be exercised during the lifetime of the
Optionee only by the Optionee. If the Optionee dies, the Option shall thereafter
be exercisable during the Option Term by his executors or administrators to the
full extent to which the Option was exercisable by the Optionee at the time of
his death. The Option shall not be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of the Option contrary to the provisions hereof, and the levy of any
execution, attachment or similar process upon the Option, shall be null and void
and without effect.
11. Notices.
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if (i) personally delivered, (ii)
sent by nationally-recognized overnight courier or (iii) sent by registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
if to the Optionee, to the address set forth on the
signature page hereto; and
if to WPCC, to:
Warburg, Pincus Capital Company, L.P.
466 Lexington Avenue
New York, New York 10017
Attention: William H. Janeway
or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been given (i) when delivered, if
personally delivered, (ii) on the first Business Day (as hereinafter defined)
after dispatch, if sent by nationally-recognized overnight courier and (iii) on
the third Business Day following the date on which the piece of mail containing
such communication is posted, if sent by mail. As used herein, "Business Day"
means a day that is not a Saturday, Sunday or a day on which banking
institutions in the
7
<PAGE>
city to which the notice or communication is to be sent are not required to be
open.
12. No Waiver.
No waiver of any breach or condition of this Agreement shall be deemed
to be a waiver of any other or subsequent breach or condition, whether of like
or different nature.
13. Modification of Rights.
The rights of the Optionee are subject to modification and termination
in certain events as provided in this Agreement.
14. Governing Law.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware applicable to contracts made and to be wholly
performed therein.
15. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
16. Entire Agreement.
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof, and supersedes all previously written
or oral negotiations, commitments, representations and agreements with respect
thereto.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
WARBURG, PINCUS CAPITAL COMPANY, L.P.
By: Warburg, Pincus & Co.,
its General Partner
By: /s/ William H. Janeway
-----------------------------------
Name:
Title:
Optionee:
--------------------------------------
Name: Jeffrey S. Rubin
Address: 847 Sasco Hill Road
Fairfield, CT 06430
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
WARBURG, PINCUS CAPITAL COMPANY, L.P.
By: Warburg, Pincus & Co.,
its General Partner
By:
-----------------------------------
Name:
Title:
Optionee:
/s/ Jeffrey S. Rubin
--------------------------------------
Name: Jeffrey S. Rubin
Address: 847 Sasco Hill Road
Fairfield, CT 06430
