As filed with the Securities and Exchange Commission on April 24, 2013
Registration No. 333-182420
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 4
TO
F
ORM
S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
COTY INC.
(Exact name of registrant as specified in its charter)
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Delaware
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2844
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13-3823358
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2 Park Avenue
New York, NY 10016
(212) 479-4300
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Jules Kaufman
General Counsel
Coty Inc.
2 Park Avenue
New York, NY 10016
(212) 479-4300
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
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Andrew L. Fabens
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Michael Kaplan
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Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: £
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
£
Accelerated filer
£
Non-accelerated filer
S
Smaller reporting company
£
(Do not check if a smaller reporting company)
The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
This Amendment No. 4 to the Registration Statement on Form S-1 (File No. 333-182420) of Coty Inc. is being filed solely for the purpose of filing certain exhibits as indicated in Part II of this Amendment No. 4. This Amendment No. 4 does not modify any provision of the prospectus that forms a
part of the Registration Statement. Accordingly, a preliminary prospectus has been omitted.
PART II
Item 13.
Other Expenses of Issuance and Distribution
The following table sets forth all expenses to be paid by the registrant, other than estimated underwriting discounts and commissions, in connection with this offering. All expenses will be borne by the registrant (except any underwriting and commissions and expenses incurred by the selling
stockholders in this offering). All amounts shown are estimates except for the SEC registration fee, the FINRA filing fee and the New York Stock Exchange listing fee.
Item 14.
Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law authorizes a corporation’s board of directors to grant, and authorizes a court to award, indemnity to officers, directors and other corporate agents. As permitted by Section 102(b)(7) of the Delaware General Corporation Law, or DGCL, the
registrant’s certificate of incorporation to be in effect upon the closing of this offering includes provisions that eliminate the personal liability of its directors and officers for monetary damages for breach of their fiduciary duty as directors and officers, except for liability (i) for any breach of the director’s
duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for unlawful payments of dividends or unlawful stock repurchases, redemptions or other distributions or (iv) for any transaction from
which the director derived an improper personal benefit. The registrant’s amended and restated certificate of incorporation will provide for such limitation of liability.
In addition, as permitted by Section 145 of the DGCL, the bylaws of the registrant to be effective upon completion of this offering provide that:
•
The registrant shall indemnify its directors and officers for serving the registrant in those capacities or for serving other business enterprises at the registrant’s request, to the fullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such
person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful.
•
The registrant may, in its discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law.
•
The registrant is required to advance expenses, as incurred, to its directors and officers in connection with defending a proceeding, except that such director or officer shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification.
•
The registrant will not be obligated pursuant to the bylaws to indemnify a person with respect to proceedings initiated by that person, except with respect to proceedings authorized by the registrant’s board of directors or brought to enforce a right to indemnification.
II-1
INFORMATION NOT REQUIRED IN PROSPECTUS
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The rights conferred in the bylaws are not exclusive, and the registrant is authorized to enter into indemnification agreements with its directors, officers, employees and agents and to obtain insurance to indemnify such persons.
•
The registrant may not retroactively amend the bylaw provisions to reduce its indemnification obligations to directors, officers, employees and agents.
The registrant’s policy is to enter into separate indemnification agreements with each of its directors and officers that provide the maximum indemnity allowed to directors and executive officers by Section 145 of the DGCL and certain additional procedural protections. The registrant will also
maintain directors’ and officers’ insurance to insure such persons against certain liabilities.
These indemnification provisions and the indemnification agreements entered into between the registrant and its officers and directors may be sufficiently broad to permit indemnification of the registrant’s officers and directors for liabilities (including reimbursement of expenses incurred) arising under
the Securities Act.
The underwriting agreement to be filed as Exhibit 1.1 to this registration statement provides for indemnification by the underwriters of the registrant and its officers and directors for certain liabilities arising under the Securities Act and otherwise.
Item 15.
Recent Sales of Unregistered Securities.
Since July 1, 2009, we have sold the following of our securities to the following entities and individuals on the dates set forth below. The issuances of these securities were deemed to be exempt from registration under the Securities Act of 1933, as amended, in reliance on Section 4(2) of the
Securities Act as transactions not involving a public offering or Rule 701 thereunder. The information set forth below with respect to our voting and non-voting common stock gives effect to the 5-for-1 stock split of our common stock that was completed on September 22, 2010.
(1)
Since July 1, 2009, we have granted to certain of our employees options to purchase an aggregate of 27,684,968 shares of our common stock, of which 82,417 have been exercised, none have expired, 7,050,570 have been forfeited and 20,551,981 remain either unvested or unexercised. The exercise
prices of these options were between $8.25 and $11.60 per share.
(2)
Since July 1, 2009, we have sold 2,350,049 shares of restricted stock to certain of our employees under the Executive Ownership Plan or the Omnibus LTIP, of which none have been forfeited and 1,162,249 remain unvested. The purchase prices of these shares of restricted stock were between $9.20
and $15.25.
(3)
Issuances of Common Stock:
(a)
On December 17, 2010, we sold 65,217,391 shares to Donata Holdings BV, at a purchase price of $9.20 per share for an aggregate purchase price of $599,999,997.20.
(b)
On October 18, 2011, we sold 5,226,381 shares to directors on our Board of Directors under the Director Stock Purchase Program, at a purchase price of $10.50 per share for an aggregate purchase price of $54,877,000.50.
(c)
On December 30, 2011, we sold 1,900,000 shares to H.F.S. S.à r.l. under the Director Stock Purchase Program, at a purchase price of $11.25 per share for an aggregate purchase price of $21,375,000.
(d)
On January 10, 2012, we sold 2,873,610 shares to directors on our Board of Directors under the Director Stock Purchase Program, at a purchase price of $11.25 per share for an aggregate purchase price of $32,328,112.50.
(e)
On January 10, 2012, we sold 533,334 shares to Sandycove Ltd. at a purchase price of $11.25 per share for an aggregate purchase price of $6,000,007.50. These shares were purchased under an agreement between Sandycove Ltd. and Coty Inc.
(f)
On February 28, 2012, we sold 22,600 shares to Sérgio Pedreiro, at a purchase price of $11.25 per share for an aggregate purchase price of $254,250.00.
II-2
(4)
Since July 1, 2009, we have granted 3,890,000 IPO Units to certain of our employees, 2,390,000 of which remain unvested and 1,500,000 of which have been forfeited.
(5)
Since July 1, 2009, we have granted 30,000 shares of restricted stock to certain of our employees under the LTIP, all of which were valued at $11.25 when granted and remain unvested.
(6)
Since July 1, 2009, we have granted 355,002 Restricted Stock Units to directors on our Board of Directors under our 2007 Director Stock Plan, 325,002 of which remain unvested and 10,000 of which have been forfeited. The grant prices of the Restricted Stock Units were between $8.25 and $15.50.
(7)
Since July 1, 2009, we have granted 2,230,376 Restricted Stock Units to certain of our employees under the LTIP or the Omnibus LTIP, 2,227,926 of which remain unvested and 2,450 of which have been forfeited. The grant prices of the Restricted Stock Units were between $15.25 and $15.50.
(8)
On June 16, 2010, we issued to 36 accredited investors $500.0 million of Senior Secured Notes in three series in a private placement transaction pursuant to the NPA: (i) $100.0 million in aggregate principal amount of 5.12% Series A Senior Secured Notes due June 16, 2017, (ii) $225.0 million in
aggregate principal amount of 5.67% Series B Senior Secured Notes due June 16, 2020 and (iii) $175.0 million in aggregate principal amount of 5.82% Series C Senior Secured Notes due June 16, 2022. The Senior Secured Notes were sold to certain accredited investors at a total purchase price
equal to the $500.0 million principal amount. J.P. Morgan Securities Inc. and Banc of America Securities LLC acted as placement agents and received fees totaling $3,555,000.
Unless specified above, all grants were awarded under the 2007 Director Stock Plan, the EOP, the LTIP or the Omnibus LTIP. All shares described above were purchased at the valuation of our common stock on the date an irrevocable investment decision was made to purchase such shares. The
grants and purchases described above that are subject to vesting conditions vest or are able to be exercised in accordance with the terms of each individual grant and are subject to the terms of the applicable plan.
Other than the transactions listed immediately above, we have not issued and sold any unregistered securities in the three years preceding the filing of this registration statement.
Item 16.
Exhibits and Financial Statement Schedules.
See the Exhibit Index immediately following the signature page hereto, which is incorporated by reference as if fully set forth herein.
II-3
Valuation and Qualifying Accounts (In millions)
(In millions)
Three Years Ended June 30, 2012
Description
Balance at
Charged to
Deductions
(b)
Balance at
Allowance for doubtful accounts:
2012
$
19.2
$
5.5
$
(5.1
)
(a)
$
19.6
2011
23.8
0.3
(4.9
)
(a)
19.2
2010
26.7
3.1
(6.0
)
(a)
23.8
Allowance for inventory obsolescence:
2012
$
71.1
$
43.0
$
(46.2
)
$
67.9
2011
64.9
35.4
(29.2
)
71.1
2010
97.7
35.6
(68.4
)
64.9
Allowance for customer returns:
2012
$
84.2
$
151.8
$
(161.1
)
$
74.9
2011
68.8
133.9
(118.5
)
84.2
2010
79.7
126.1
(137.0
)
68.8
Deferred tax allowances:
2012
$
45.6
$
4.9
(b)
$
(3.4
)
$
47.1
2011
42.7
7.0
(b)
(4.1
)
45.6
2010
94.7
11.9
(b)
(63.9
)
42.7
(a)
Includes amounts written-off, net of recoveries.
(b)
Includes foreign currency translation adjustments.
Item 17.
Undertakings.
The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 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 Securities and Exchange
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.
The undersigned registrant hereby undertakes that:
1.
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
2.
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus 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-4
Beginning of
Period
Costs and
Expenses
End of Period
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Coty Inc. has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, New York on April 24, 2013.
C
OTY
I
NC
.
By:
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S
/ S
ÉRGIO
P
EDREIRO
Name: Sérgio Pedreiro
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on April 24, 2013.
Signature
Title
Date
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(Michele Scannavini)
Chief Executive Officer and Director
April 24, 2013
*
(Sérgio Pedreiro)
Chief Financial Officer
April 24, 2013
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(James E. Shiah)
Chief Accounting and Compliance Officer
April 24, 2013
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(Lambertus J.H. Becht)
Chairman of the Board of Directors
April 24, 2013
*
(Bernd Beetz)
Director
April 24, 2013
*
(Bradley M. Bloom)
Director
April 24, 2013
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(Peter Harf)
Director
April 24, 2013
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(Joachim Faber)
Director
April 24, 2013
*
(M. Steven Langman)
Director
April 24, 2013
*
(Erhard Schoewel)
Director
April 24, 2013
*
(Robert Singer)
Director
April 24, 2013
*
(Jack Stahl)
Director
April 24, 2013
*By:
/
S
/ J
ULES
K
AUFMAN
Jules Kaufman
II-5
Title: Chief Financial Officer
(Principal Executive Officer)
(Principal Financial Officer)
(Principal Accounting Officer)
Attorney-in-Fact
EXHIBIT INDEX
Item 16.
Exhibits
Exhibit
Document
1.1*
Form of Underwriting Agreement (including form of lock-up agreement)
3.1
Form of Amended and Restated Certificate of Incorporation
3.2
Amended and Restated By-Laws
4.1*
Specimen Class A Common Stock Certificate of the registrant
4.2*
Specimen Class B Common Stock Certificate of the registrant
5.1*
Opinion of Gibson, Dunn & Crutcher LLP
10.1
Credit Agreement, dated as of April 2, 2013, among the registrant, JPMorgan Chase Bank, N.A. as Administrative Agent, Bank of America, N.A., BNP Paribas, Crédit Agricole Corporate & Investment Bank, Deutsche Bank Securities Inc., ING Bank N.V., Morgan Stanley MUFG Loan
Partners, LLC and Wells Fargo Bank, N.A. as Syndication Agents, J.P. Morgan Securities LLC, BNP Paribas Securities Corp., Crédit Agricole Corporate & Investment Bank, Deutsche Bank Securities Inc., ING Bank N.V., Merrill Lynch Pierce, Fenner & Smith Incorporated, Morgan Stanley
MUFG Loan Partners, LLC and Wells Fargo Securities, LLC as Lead Arrangers and Joint Bookrunners, and the lenders party thereto
10.2
Registration Rights Agreement between the registrant, JAB, as successor to Donata Holdings BV and Donata Holding SE, The Berkshire Fund Stockholders and the WB Fund Stockholders
10.3
Form of Amended and Restated Stockholders Agreement between the registrant, JAB Holdings II B.V., the Berkshire Fund Stockholders and the WB Fund Stockholders
10.4**
Lease Agreement, dated as of July 14, 2008 and amended as of March 17, 2009, May 19, 2011 and April 6, 2012, between the registrant and Empire State Building Company
10.5**
Agreement of Lease, dated as of October 29, 1999, between the registrant and One Park Avenue Tenant LLC
10.6**
Lease, dated as of December 30, 2005 and amended as of August 23, 2007, November 18, 2007 and November 13, 2008, between the registrant and PPF Off Two Park Avenue Owner, LLC, as successor in interest to SEB Immobilien-Investment GmbH
10.7**
Lease Agreement, dated as of July 3, 2007, between Société Coty France and SCI Vendôme Paris
10.8**
Lease Agreement, dated as of June 13, 2005, between Société Coty and S.C.I. Fêdêrale Gramont
10.9**
Lease Agreement, dated as of November 12, 1992 and amended as of February 4, 1994, March 10, 1997, January 23, 2000, March 31, 2000, August 1, 2006, January 28, 2008 and August 14, 2012 between Baker-Properties Limited Partnership and Coty US LLC
10.10**
Lease, entered into as of March 31, 2000 and amended as of August 1, 2006, September 8, 2009, August 16, 2010 and August 14, 2012 between Baker Properties Limited Partnership and Coty US Inc.
10.11**
Lease, dated as of July 25, 2011, between Terinvest SA and Coty Geneva S.A.
10.12**
Lease Agreement, dated August 14, 2012 between WU/LH 500 American L.L.C. and Coty US LLC
10.13*
Amended and Restated Employment Agreement, as amended and restated effective January 1, 2009, between the registrant and Bernd Beetz
10.14*
Employment Agreement, dated September 25, 2012, between Coty Italia S.P.A. and Michele Scannavini
10.15*
Employment Agreement, dated November 19, 2007, between the registrant and Jules Kaufman
10.16*
Employment Agreement, dated February 18, 1998, between Coty S.A. and Géraud-Marie Lacassagne
10.17*
Employment Agreement, dated June 24, 2011, between Coty Geneva S.A. and Darryl McCall
10.18*
Transfer Agreement Letter, dated June 24, 2011, between Coty Geneva S.A. and Darryl McCall
Number
Exhibit
Document
10.19*
Employment Agreement, dated July 20, 2006, between Coty S.A.S. and Jean Mortier
10.20*
Rider, dated January 11, 2010, to Employment Agreement, dated July 20, 2006, between Coty S.A.S. and Jean Mortier
10.21*
Employment Agreement, dated November 18, 2008, between the registrant and Sérgio Pedreiro
10.22*
Employment Agreement, dated August 1, 2012, between Coty S.A.S. and Renato Semerari
10.23*
Employment Agreement, dated March 24, 2010, between Coty Geneva S.A. and Peter Shaefer
10.24
Form of Indemnification Agreement between the registrant and its directors and officers
10.25
Agreement Regarding Indemnification Obligations, dated as of April 14, 2011 and effective as of January 25, 2011, by and among the registrant, Berkshire Fund VII Investment Corp., Berkshire Fund VII-A Investment Corp., Berkshire Investors III LLC, Berkshire Investors IV LLC and
Bradley Bloom.
10.26
Agreement Regarding Indemnification Obligations, dated as of April 14, 2011 and effective as of January 25, 2011, by and among the registrant, Worldwide Beauty Onshore L.P., Worldwide Beauty Offshore L.P. and Steven Langman
10.27
Coty Inc. Annual Performance Plan, as amended and restated April 8, 2013
10.28
Coty Inc. Long-Term Incentive Plan, as amended and restated April 8, 2013
10.29
Nonqualified Stock Option Award Terms and Conditions under Coty Inc. Long-Term Incentive Plan, as amended April 8, 2013
10.30
Form of IPO Unit Award under Coty Inc. Long-Term Incentive Plan
10.31
Restricted Stock Unit Award Terms and Conditions under Coty Inc. Long-Term Incentive Plan, as amended April 8, 2013
10.32
Coty Inc. Executive Ownership Plan, as amended and restated on April 8, 2013
10.33
Adoption of Amendments to Restricted Stock Units under the Coty Inc. Executive Ownership Plan (applicable to awards outstanding on September 14, 2010)
10.34
Adoption of Amendments to Restricted Stock Units under the Coty Inc. Executive Ownership Plan (applicable to awards outstanding on December 7, 2012)
10.35
Form of Restricted Stock Agreement under Coty Inc. Executive Ownership Plan, as amended on April 8, 2013
10.36
Matching Option Award Terms and Conditions under Coty Inc. Executive Ownership Plan, as amended on April 8, 2013
10.37
Coty Inc. Stock Plan for Non-Employee Directors
10.38
Form of Nonqualified Stock Option Award Agreement under Coty Inc. Stock Plan for Non-Employee Directors
10.39
Coty Inc. 2007 Stock Plan for Directors, as amended and restated April 8, 2013
10.40
Adoption of Amendments to Pre-2008 Stock Options Granted Under the Coty Inc. 2007 Stock Plan for Directors Or the Coty Inc. Stock Plan for Non-Employee Directors (applicable to awards outstanding on September 14, 2010)
10.41
Restricted Stock Unit Award under Coty Inc. 2007 Stock Plan for Directors, as amended on April 8, 2013
10.42
Coty Inc. Stock Purchase Program for Directors, as amended and restated as of April 8, 2013
10.43
Coty Inc. Equity and Long-Term Incentive Plan, as amended and restated on April 8, 2013
10.44
Restricted Stock Unit Award Terms and Conditions under the Coty Inc. Equity and Long-Term Incentive Plan, as amended and restated April 8, 2013
10.45
Restricted Stock and Restricted Stock Unit Tandem Award Terms and Conditions under the Coty Inc. Equity and Long-Term Incentive Plan, as amended and restated April 8, 2013
11.1*
Statement regarding computation of per share earnings
12.1*
Statements regarding computation of ratios
21.1*
List of significant subsidiaries
23.1**
Consent of Deloitte & Touche LLP regarding Coty Inc. and its Subsidiaries
Number
Exhibit
Document
23.2*
Consent of Gibson Dunn & Crutcher LLP (included in Exhibit 5.1)
24.1**
Power of Attorney (included in signature page)
*
To be included by amendment.
**
Previously filed.
The Company has outstanding certain other long-term indebtedness. Such long-term indebtedness does not exceed 10% of the total assets of the Company; therefore, copies of instruments defining the rights of holders of such indebtedness are not included as exhibits. The Company agrees to furnish
copies of such instruments to the SEC upon request.
Number
Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
COTY INC.
(ORIGINALLY INCORPORATED ON JANUARY 20,
1995 UNDER THE NAME
OF BENCKISER COSMETICS HOLDINGS, INC.)
I, Jules P. Kaufman, Secretary of Coty Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “ GCL ”), do hereby certify that the Certificate of Incorporation of Coty Inc., as amended, has been further amended, and restated as amended, in accordance with the provisions of Sections 141, 242 and 245 of the GCL, and, as amended and restated, is set forth in its entirety as follows.
FIRST .
The name of the corporation is Coty Inc. (the “ Corporation ”).
SECOND .
The address of the registered office of the Corporation in the State of Delaware is 1209 Orange Street, in the City of Wilmington, New Castle County, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.
THIRD .
The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the GCL.
FOURTH .
A. Authorized Capital . The total number of shares of all classes of stock which the Corporation shall have the authority to issue is 1,187,754,370, of which 800,000,000 shall be designated as Class A Common Stock, par value $0.01 per share (the “ Class A Common Stock ”), 367,754,370 shall be designated as Class B Common Stock, par value $0.01 per share (the “ Class B Common Stock ”), and 20,000,000 shall be designated as Preferred Stock, par value $0.01 per share (the “ Preferred Stock ”). The Class A Common Stock and the Class B Common Stock shall hereinafter collectively be called “ Common Stock .” Subject to the rights, if any, of the holders of any outstanding series of Preferred Stock, the number of authorized shares of any class or classes of stock of the Corporation may be increased or decreased (but not below the number of shares then outstanding) by the affirmative vote of the holders of capital stock of the Corporation representing a majority in voting power represented by all outstanding shares
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of capital stock of the Corporation entitled to vote generally, irrespective of the provisions of Section 242(b)(2) of the GCL or any successor provision. Upon the filing of this Certificate of Incorporation with the Secretary of State of the State of Delaware (the “ Effective Time ”) each share of common stock, par value $0.01 per share, issued and outstanding immediately prior to the Effective Time (“ Old Common Stock ”) held by a Permitted Holder shall automatically, without any action on the part of the holder thereof, be reclassified as and converted into one share of Class B Common Stock, par value $0.01 per share, and each share of Old Common Stock held by other than a Permitted Holder shall be reclassified as and converted into one share of Class A Common Stock. Until presented for exchange, certificates that previously represented shares of Old Common Stock shall, from and after the Effective Time, represent the number of shares of Class A Common Stock or Class B Common Stock into which such shares were reclassified and converted pursuant hereto.
B. Common Stock .
(1) Voting Rights .
(i) Except as otherwise provided in this Certificate of Incorporation or otherwise required by applicable law, the holders of shares of Class A Common Stock and Class B Common Stock shall at all times vote together as one class on all matters (including the election of directors) submitted to a vote or for the consent of the stockholders of the Corporation.
(ii) Each holder of Class A Common Stock shall be entitled to one vote for each share of Class A Common Stock held as of the applicable record date on any matter that is submitted to a vote or for the consent of the stockholders of the Corporation.
(iii) Except as otherwise provided in this Certificate of Incorporation or otherwise required by applicable law, each holder of Class B Common Stock shall be entitled to ten votes for each share of Class B Common Stock held as of the applicable date on any matter that is submitted to a vote or for the consent of the stockholders of the Corporation.
(2) Dividends . Subject to the preferences applicable to any series of Preferred Stock, if any, outstanding at any time, the holders of Class A Common Stock and the holders of Class B Common Stock shall be entitled to share equally, on a per share basis, in such dividends and other distributions of cash, property or shares of stock of the Corporation as may be declared by the Board of Directors from time to time with respect to the Common Stock out of assets or funds of the Corporation legally available therefor; provided , however , that in the event that such dividend is paid in the form of shares of Common Stock or rights to acquire Common Stock, the holders of Class A Common Stock shall receive Class A Common Stock or rights to acquire Class A Common Stock, as the case may be, and the holders of Class B Common Stock shall receive Class B Common Stock or rights to acquire Class B Common Stock, as the case may be. Notwithstanding the foregoing, the Board of Directors may pay or make a
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disparate dividend or distribution per share of Class A Common Stock or Class B Common Stock (whether in the amount of such dividend or distribution payable per share, the form in which such dividend or distribution is payable, the timing of the payment, or otherwise) if such disparate dividend or distribution is approved in advance by the affirmative vote (or written consent) of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class.
(3) Liquidation . Subject to the preferences applicable to any series of Preferred Stock, if any, outstanding at any time, in the event of the voluntary or involuntary liquidation, dissolution, distribution of assets or winding up of the Corporation, all assets of the Corporation of whatever kind available for distribution to the holders of Common Stock shall be divided among and paid ratably to the holders of the Class A Common Stock and the Class B Common Stock treated as a single class unless disparate or different treatment of the shares of each such class with respect to distributions upon any such liquidation, dissolution, distribution of assets or winding up is approved in advance by the affirmative vote (or written consent) of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class.
(4) Subdivision, Combinations or Reclassification . If the Corporation in any manner subdivides, combines or reclassifies the outstanding shares of one class of Common Stock, the outstanding shares of the other class of Common Stock will be subdivided, combined or reclassified in the same manner; provided , however , that shares of one such class of Common Stock may be subdivided, combined or reclassified in a different or disproportionate manner if such subdivision, combination or reclassification is approved in advance by the affirmative vote (or written consent) of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class.
(5) Equal Status . Except as expressly provided in this ARTICLE FOURTH, Class A Common Stock and Class B Common Stock shall have the same rights and privileges and rank equally (including as to dividends and distributions, and upon any liquidation, dissolution, distribution of assets or winding up of the Corporation), share ratably and be identical in all respects as to all matters.
(6) Conversion of Class B Common Stock .
(i) Voluntary Conversion . Each share of Class B Common Stock shall be convertible into one fully paid and nonassessable share of Class A Common Stock at the option of the holder thereof at any time upon written notice to the Corporation. Before any holder of Class B Common Stock shall be entitled voluntarily to convert any shares of such Class B Common Stock, such holder shall surrender the certificate or certificates therefor (if any), duly endorsed, at the principal corporate office of the Corporation or of any transfer agent for the Class B Common Stock, and shall give written notice to the Corporation at its principal corporate office of the election to convert the same and shall state therein the name or names (a) in which the certificate or
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certificates representing the shares of Class A Common Stock into which the shares of Class B Common Stock are so converted are to be issued if such shares are certificated or (b) in which such shares are to be registered in book entry if such shares are uncertificated. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Class B Common Stock, or to the nominee or nominees of such holder, a certificate or certificates representing the number of shares of Class A Common Stock to which such holder shall be entitled as aforesaid (if such shares are certificated) or, if such shares are uncertificated, register such shares in book-entry form. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Class B Common Stock to be converted following or contemporaneously with the written notice of such holder’s election to convert required by this Section B(6)(i) of ARTICLE FOURTH, and the person or persons entitled to receive the shares of Class A Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Class A Common Stock as of such date. Each share of Class B Common Stock that is converted pursuant to this Section B(6)(i) of ARTICLE FOURTH shall be retired by the Corporation and shall not be available for reissuance.
(ii) Automatic Conversion . (a) Each share of Class B Common Stock shall automatically, without further action by the holder thereof, be converted into one fully paid and nonassessable share of Class A Common Stock upon the occurrence of a Transfer (as defined below), other than a Permitted Transfer (as defined below), of such share of Class B Common Stock, and (b) all shares of Class B Common Stock shall automatically, without further action by any holder thereof, be converted into an identical number of shares of fully paid and nonassessable Class A Common Stock (i) if, on the record date for any meeting of stockholders of the Corporation, the number of shares of Class B Common Stock then outstanding constitutes less than 10% of the aggregate number of shares of Common Stock then outstanding, as determined by the Board of Directors of the Corporation, or (ii) upon the occurrence of an event, specified by the affirmative vote (or written consent) of the holders of a majority of the then outstanding shares Class B Common Stock, voting as a separate class (the occurrence of an event described in clause (a) or (b) of this Section B(6)(ii) of ARTICLE FOURTH, a “ Conversion Event ”). Each outstanding stock certificate that, immediately prior to a Conversion Event, represented one or more shares of Class B Common Stock subject to such Conversion Event shall, upon such Conversion Event, be deemed to represent an equal number of shares of Class A Common Stock, without the need for surrender or exchange thereof. The Corporation shall, upon the request of any holder whose shares of Class B Common Stock have been converted into shares of Class A Common Stock as a result of a Conversion Event and upon surrender by such holder to the Corporation of the outstanding certificate(s) formerly representing such holder’s shares of Class B Common Stock (if any), issue and deliver to such holder certificate(s) representing the shares of Class A Common Stock into which such holder’s shares of Class B Common Stock were converted as a result of such Conversion Event (if such shares are certificated) or, if such shares are uncertificated, register such shares in book-entry form. Each share of Class B Common Stock that is converted pursuant to this Section B(6)(ii) of ARTICLE FOURTH shall thereupon be retired by the Corporation and shall not be available for reissuance.
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(iii) The Corporation may, from time to time, establish such policies and procedures, not in violation of applicable law or the other provisions of this Certificate of Incorporation, relating to the conversion of the Class B Common Stock into Class A Common Stock, as it may deem necessary or advisable in connection therewith. If the Corporation has a reasonable basis to believe that a Transfer giving rise to a conversion of shares of Class B Common Stock into Class A Common Stock has occurred but has not theretofore been reflected on the books of the Corporation, the Corporation may request in writing that the holder of such shares furnish affidavits or other reasonable evidence to the Corporation as the Corporation deems necessary to determine whether a conversion of shares of Class B Common Stock to Class A Common Stock has occurred and if such holder does not, within thirty days after receipt of such written request, furnish reasonable evidence to the Corporation to enable the Corporation to determine that no such conversion has occurred, any such shares of Class B Common Stock, to the extent not previously converted, shall be automatically converted into shares of Class A Common Stock and the same shall thereupon be registered on the books and records of the Corporation. In connection with any action of stockholders taken at a meeting or by written consent, the stock ledger of the Corporation shall be presumptive evidence as to who are the stockholders entitled to vote in person or by proxy at any meeting of stockholders or in connection with any such written consent and the class or classes or series of shares held by each such stockholder and the number of shares of each class or classes or series held by such stockholder.
(iv) Reservation of Stock . The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose of effecting the conversion of the shares of Class B Common Stock, such number of shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Class B Common Stock into shares of Class A Common Stock.
(v) Protective Provision . The Corporation shall not, whether by merger, consolidation or otherwise, amend, alter, repeal or waive Section B of this ARTICLE FOURTH (or adopt any provision inconsistent therewith), unless such action is first approved by the affirmative vote (or written consent) of the holders of a majority of the then outstanding shares of Class B Common Stock, voting as a separate class, in addition to any other vote required by applicable law, this Certificate of Incorporation or the By-laws, and the holders of Class A Common Stock shall have no right to vote thereon.
(7) Definitions . For purposes of this ARTICLE FOURTH:
(i) “ Affiliate ” shall mean, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with such Person.
(ii) “ Benckiser Controlled Trust ” shall mean any trust the primary beneficiaries of which are Benckiser Family Members (“ Benckiser Beneficiaries ”). For purposes of this provision, the primary beneficiaries of a trust will
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be deemed to be Benckiser Beneficiaries if, under the maximum exercise of discretion by the trustee in favor of persons who are not Benckiser Beneficiaries, the value of the interests of such persons in such trust, computed actuarially, is less than 50%. The factors and methods prescribed in section 7520 of the Internal Revenue Code of 1986, as amended, for use in ascertaining the value of certain interests shall be used in determining a beneficiary’s actuarial interest in a trust for purposes of applying this provision. For purposes of this provision, the actuarial value of the interest in a trust of any person in whose favor a testamentary power of appointment may be exercised shall be deemed to be zero. For purposes of this provision, in the case of a trust created by a Benckiser Family Member, the actuarial value of the interest in such trust of any person who may receive trust property only at the termination of the trust and then only in the event that, at the termination of the trust, there are no living issue of such Benckiser Family Member shall be deemed to be zero.
(iii) “ Benckiser Family Member ” shall mean the lineal descendants, by natural birth or by or through adoption prior to the attainment of their eighteenth birthday, of Dr. Albert Reimann (born in 1898 and died in 1984), including without limitation, the lineal descendants by natural birth or by or through adoption prior to the attainment of their eighteenth birthday of persons who qualify as lineal descendants of said Dr. Albert Reimann by reason of their and/or their ancestors’ adoption prior to the attainment of their eighteenth birthday, as well as the surviving spouses of any such lineal descendant of Dr. Albert Reimann, after such descendant’s death, if such surviving spouse is also a stockholder of Donata Holding SE and/or Parentes Holding SE.
(iv) “ Benckiser Permitted Holder ” shall mean (a) Benckiser Family Members, (b) any Benckiser Controlled Trust, or (c) any Person of which more than 50% of the voting shares or voting (or otherwise controlling) equity interests in such Person are directly or indirectly owned or controlled by, or held for the benefit of, one or more of the Persons described in clauses (a) or (b) of this definition. A Benckiser Permitted Holder shall not lose such status merely because (x) the identity of the individuals comprising Benckiser Family Members and owning or for whose benefit such shares or equity interests are held and/or (y) any executor(s), administrator(s), guardian(s), trustee(s) or other Person(s) acting as a fiduciary with respect to such Benckiser Family Members or serving in any similar or corresponding capacity may change from time to time for any reason, including without limitation, death, retirement, resignation, removal, appointment, intra-family transfers or otherwise.
(v) “ control ” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, by contract or otherwise.
(vi) “ Fund Permitted Holder ” shall mean (a) Berkshire Partners LLC and those of its Affiliates that Berkshire Partners LLC or its Affiliate controls through managers or general partners, subject to the fiduciary duties thereof and any specific provision of such entity’s governing documents applicable thereto, to which
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Class B Common Stock is Transferred, but only for so long as Berkshire Partners LLC and entities under common control with Berkshire Partners LLC retain with respect to such Class B Common Stock, directly or indirectly, (1) Voting Control, (2) control over the disposition thereof, and (3) at least 33% of the economic consequences of ownership held by the transferring entities prior to the first such Transfer and (b) Rhône Capital L.L.C. and those of its Affiliates that Rhône Capital L.L.C. or its Affiliate controls through managers or general partners, subject to the fiduciary duties thereof and any specific provision of such entity’s governing documents applicable thereto, to which Class B Common Stock is Transferred, but only for so long as Rhône Capital L.L.C. and entities under common control with Rhône Capital L.L.C. retain with respect to such Class B Common Stock, directly or indirectly, (1) Voting Control, (2) control over the disposition thereof, and (3) at least 33% of the economic consequences of ownership held by the transferring entities prior to the first such Transfer.
(vii) “ Permitted Holder ” shall mean (a) a Benckiser Permitted Holder, (b) a Fund Permitted Holder or (c) any Person (other than a Benckiser Permitted Holder or Fund Permitted Holder) to whom shares of Class B Common Stock originally held by a Fund Permitted Holder have been Transferred where such Transfer and each preceding Transfer of such shares of Class B Common Stock under subsection (c) of the definition of “Permitted Holder” herein has been consented to in writing in advance (a copy of which has been delivered contemporaneously to the Company) by the holders of a majority of the shares of Class B Common Stock held by all Benckiser Permitted Holders; provided that such Person shall be deemed a Permitted Holder only in respect of the shares of Class B Common Stock so Transferred, unless the written consent provides otherwise.
(viii) “ Permitted Transfer ” shall mean any of the following: (A) any Transfer of shares of Class B Common Stock to a broker or other nominee; provided that the transferor, immediately following such Transfer, retains (1) Voting Control, (2) control over the disposition of such shares, and (3) the economic consequences of ownership of such shares; and (B) any Transfer of shares of Class B Common Stock between or among Permitted Holders.
(ix) “ Person ” shall mean any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization or other entity, whether domestic or foreign.
(x) “ Transfer ” of a share of Class B Common Stock shall mean, directly or indirectly, any sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of such share or any legal or beneficial interest in such share, whether or not for value and whether voluntary or involuntary or by operation of law (including by merger, consolidation or otherwise), including, without limitation, the transfer of, or entering into a binding agreement with respect to, Voting Control over such share, by proxy or otherwise. A “Transfer” shall also be deemed to have occurred with respect to a share of Class B Common Stock if such share of Class B Common Stock is beneficially held by a Person that is not a Permitted Holder for any reason.
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Notwithstanding the foregoing, the following shall not be considered a “Transfer” within the meaning of this ARTICLE FOURTH:
(A) the granting by a stockholder of a proxy to (y) officers or directors of the Corporation at the request of the Board of Directors, or (z) a representative of such stockholder, in connection with actions to be taken at an annual or special meeting of stockholders or in connection with any action by written consent of the stockholders;
(B) the pledge of shares of Class B Common Stock by a stockholder that creates a mere security interest in such shares pursuant to a bona fide loan or indebtedness transaction for so long as such stockholder continues to exercise Voting Control over such pledged shares; provided , however , that a foreclosure on such shares or other similar action by the pledgee shall constitute a “Transfer” unless such foreclosure or similar action qualifies as a “Permitted Transfer” at such time; or
(C) any change in the trustees or the Person(s) acting as a fiduciary with respect to a Permitted Holder having or exercising Voting Control over shares of Class B Common Stock of a Permitted Holder; provided that following such change such Permitted Holder continues to be a Permitted Holder.
(xi) “ Voting Control ” shall mean, with respect to a share of Class B Common Stock, the power (whether exclusive or shared) to vote or direct the voting of such share by proxy, voting agreement or otherwise.
C. Preferred Stock . The shares of Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby vested with authority to fix by resolution or resolutions the designations and the powers, including voting powers, if any, preferences and relative, participating, optional or other special rights, if any, and qualifications, limitations or restrictions thereof, of any series of shares of Preferred Stock, and to fix the number of shares constituting any such series, and to increase (but not above the authorized shares of the class) or decrease (but not below the number of shares thereof then outstanding) the number of shares of any such series. In case the number of shares of any such series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution or resolutions originally fixing the number of shares of such series. The holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate of Incorporation (including any certificate of designations setting forth the rights, powers and preferences, and the qualifications, limitations and restrictions thereof) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation (including any certificate of designations setting forth the rights, powers and preferences, and the qualifications, limitations and restrictions thereof) or pursuant to the GCL.
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FIFTH .
The Corporation is to have perpetual existence.
SIXTH .
In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware:
A. The Board or Directors of the Corporation is expressly authorized to adopt, amend or repeal the By-laws of the Corporation.
B. Elections of directors of the Corporation need not be by written ballot unless the By-laws of the Corporation shall so provide.
C. Stockholders shall not be entitled to cumulative voting rights in the election of directors of the Corporation.
D. The books of the Corporation may be kept at such place within or without the State of Delaware as the By-laws of the Corporation may provide or as may be designated from time to time by the Board of Directors of the Corporation.
E. Any action required or permitted to be taken by the stockholders at any annual or special meeting of the stockholders of the Corporation may be taken without a meeting if a consent or consents in writing, setting forth the action so taken, are signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
F. Unless otherwise prescribed by law, special meetings of stockholders, for any purpose or purposes, may be called by either (i) the Chairman of the Board of Directors, (ii) the Chief Executive Officer or (iii) the Board of Directors. The Secretary shall call a special meeting of stockholders upon the request, in writing, of the holders of a majority in voting power of the outstanding shares of the Corporation entitled to vote in an election of directors.
SEVENTH .
A. Elections of directors shall be decided by a plurality of the votes cast. Abstentions and broker non-votes shall not be counted as votes cast.
B. The Board of Directors shall consist of not fewer than five nor more than thirteen directors, the exact number to be fixed from time to time solely by resolution of the Board of Directors.
C. Subject to the rights of the holders of any one or more series of Preferred Stock then outstanding, any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the directors then in
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office, provided that a quorum is present, or by the affirmative vote of the holders of a majority in voting power of all issued and outstanding capital stock entitled to vote in an election of directors, and any other vacancy occurring on the Board of Directors may be filled by a majority of the directors then in office, even if less than a quorum, by a sole remaining director, or by the affirmative vote of the holders of a majority in voting power of all issued and outstanding capital stock entitled to vote in an election of directors. Each director so elected shall hold office until the expiration of the term of office of the director whom he or she has replaced and until his or her successor shall be elected and qualified. No decrease in the authorized number of directors shall shorten the term of any incumbent director.
D. Subject to the rights of the holders of any one or more series of Preferred Stock then outstanding, any director, or the entire Board of Directors, may be removed from office at any time, but only by the affirmative vote of the holders of at least a majority in voting power of the issued and outstanding capital stock of the Corporation entitled to vote in the election of directors.
E. During any period when the holders of any series of Preferred Stock have the right to elect additional directors as provided for or fixed pursuant to the provisions of ARTICLE FOURTH hereof, then upon commencement and for the duration of the period during which such right continues: (i) the then otherwise total authorized number of directors of the Corporation shall automatically be increased by such specified number of directors, and the holders of such Preferred Stock shall be entitled to elect the additional directors so provided for or fixed pursuant to said provisions and (ii) each such additional director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates pursuant to said provisions, whichever occurs earlier, subject to his earlier death, disqualification, resignation or removal. Except as otherwise provided by the Board of Directors in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such additional directors elected by the holders of such stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate and the total authorized number of directors of the Corporation shall be reduced accordingly.
EIGHTH .
No director shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation is not permitted under the GCL as the same exists or may hereafter be amended. If the GCL is amended hereafter to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent authorized by the GCL, as so amended. Any amendment, modification or repeal of this ARTICLE EIGHTH by the stockholders of the Corporation shall not adversely affect any right or protection of a
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director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal of modification.
NINTH .
The Corporation shall indemnify its directors and officers to the fullest extent authorized or permitted by law, as now or hereafter in effect, and such right to indemnification shall continue as to a person who has ceased to be a director or officer of the Corporation and shall inure to the benefit of his or her heirs, executors and personal and legal representatives; provided , however , that, except for proceedings to enforce rights to indemnification, the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors. The right to indemnification conferred by this ARTICLE NINTH shall include the requirement that the Corporation shall advance and pay the expenses incurred in defending or otherwise participating in any proceeding in advance of its final disposition, without the necessity of the Board of Directors determining whether such person has the ability to repay any such advances or whether such person would be entitled to indemnification hereunder.
The Corporation may, to the extent authorized in the By-laws or from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this ARTICLE NINTH to the directors and officers of the Corporation.
The rights to indemnification and to the advancement of expenses conferred in this ARTICLE NINTH shall be not exclusive of any other right which any person may have or hereafter acquire under this Certificate of Incorporation, the By-laws of the Corporation, any statute, agreement, vote of stockholders, vote of disinterested directors or otherwise. Any repeal or modification of this ARTICLE NINTH by the stockholders of the Corporation shall not adversely affect any rights to indemnification and to the advancement of expenses of a director, officer, employee or agent of the Corporation existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.
TENTH .
Subject to the GCL and the terms hereof, the Corporation reserves the right to amend or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation.
ELEVENTH .
Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation,
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(ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the GCL, this Certificate of Incorporation or the By-laws of the Corporation, (iv) any action to interpret, apply, enforce or determine the validity of this Certificate of Incorporation or the By-laws of the Corporation, or (v) any other action asserting a claim governed by the internal affairs doctrine except for, as to each of (i) through (v) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction. If any provision or provisions of this ARTICLE ELEVENTH shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this ARTICLE ELEVENTH (including, without limitation, each portion of any sentence of this ARTICLE ELEVENTH containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this ARTICLE ELEVENTH.
IN WITNESS WHEREOF, the undersigned has hereunto signed his name and affirms that the statements made in this Certificate of Incorporation are true and under the penalties of perjury as of the [●] day of [●], 2013.
| By: | |||
| Name: | Jules P. Kaufman | ||
| Title: |
Senior Vice President, General Counsel
and Secretary |
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Exhibit 3.2
AMENDED AND RESTATED
BY-LAWS
OF
COTY INC.
A Delaware Corporation
Effective January 15, 1997
Amended April 8, 2013
AMENDED AND RESTATED
BY-LAWS
OF
COTY INC.
(hereinafter called the “Corporation”)
ARTICLE I
OFFICES
Section 1 . Registered Office . The registered office of the Corporation may be in the City of Wilmington, County of New Castle, State of Delaware, or in such other location within the State of Delaware as may be determined from time to time by the Board of Directors.
Section 2 . Other Offices . The Corporation may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1 . Place of Meetings . Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof.
Section 2 . Annual Meetings . The annual meetings of stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting, at which meetings the stockholders shall elect directors, and transact such other business as may properly be brought before the meeting. The Board of
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Directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as described in Section 12 of these By-laws in accordance with Section 211(a)(1) and (2) of the General Corporation Law of the State of Delaware (the “GCL”). Except as otherwise provided by law, the Certificate of Incorporation or these By-laws, written notice of the annual meeting stating the place, date and hour of the meeting and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, shall be mailed or transmitted electronically to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting. If mailed, notice to stockholders shall be deemed given when deposited in the mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation.
Section 3 . Special Meetings . Unless otherwise prescribed by law or by the certificate of incorporation of the Corporation, as amended and restated from time to time (the “Certificate of Incorporation”), special meetings of stockholders, for any purpose or purposes, may be called by either (i) the Chairman of the Board of Directors, (ii) the Chief Executive Officer or (iii) the Board of Directors. The Secretary shall call a special meeting of stockholders upon the request, in writing, of the holders of a majority of the voting power of the outstanding shares of the Corporation entitled to vote in an election of directors. At a special meeting of the stockholders, only such business shall be conducted as shall be specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors. Business transacted at a stockholder-requested special meeting shall be limited to the business stated in the valid special meeting request(s) received from the requisite percent of stockholders and any additional business that the Board of Directors determines to include in the Corporation’s notice of
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meeting. Except as otherwise provided by law, the Certificate of Incorporation or these By-laws, written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be mailed or transmitted electronically not less than ten nor more than sixty days before the date of the meeting to each stockholder entitle to vote at such meeting. If mailed, notice to stockholders shall be deemed given when deposited in the mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation.
Section 4 . Quorum . Except as otherwise required by law or by the Certificate of Incorporation, the stockholders representing a majority of the voting power of the issued and outstanding capital stock of the Corporation, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, may, by a majority in voting power thereof, adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be or have been present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting not less than ten nor more than sixty days before the date of the meeting.
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Section 5 . Proxies . Any stockholder entitled to vote may do so in person or by his or her proxy appointed by an instrument in writing subscribed by such stockholder or by his or her attorney thereunto authorized, delivered to the Secretary of the meeting; provided , however , that no proxy shall be voted or acted upon after three years from its date, unless said proxy provides for a longer period. Without limiting the manner in which a stockholder may authorize another person or persons to act for him or her as proxy, either of the following shall constitute a valid means by which a stockholder may grant such authority:
(i) A stockholder may execute a writing authorizing another person or persons to act for him or her as proxy. Execution may be accomplished by the stockholder or his or her authorized officer, director, employee or agent signing such writing or causing his or her signature to be affixed to such writing by any reasonable means, including, but not limited to, by facsimile signature.
(ii) A stockholder may authorize another person or persons to act for him or her as proxy by transmitting or authorizing the transmission of a proxy by facsimile or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy, provided that any such facsimile or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the facsimile or other electronic transmission was authorized by the stockholder.
Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission authorizing another person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing or transmission for any and all purposes for
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which the original writing or transmission could be used; provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.
Section 6 . Voting . At all meetings of the stockholders at which a quorum is present, except as otherwise required by law, the Certificate of Incorporation or these By-laws, any question brought before any meeting of stockholders other than the election of directors shall be decided by the affirmative vote of the holders of a majority of the votes cast. Elections of directors shall be decided by a plurality of the votes cast. Abstentions and broker non-votes shall not be counted as votes cast. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of stockholders, in his or her discretion, may require that any votes cast at such meeting shall be cast by written ballot.
Section 7 . Notice of Stockholder Business and Nominations at Meetings of Stockholders .
(a) Annual Meeting .
(i) No persons may be nominated for election to the Board of Directors and no other business may be transacted at an annual meeting of stockholders, other than nominations and business that are either (A) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (B) otherwise properly brought before the annual meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (C) otherwise properly brought before the annual meeting by any stockholder of the Company (1) who is a stockholder of record on the date of the giving of the notice provided for in this Section 7 and on
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the record date for the determination of stockholders entitled to vote at such annual meeting and (2) who complies with the notice procedures set forth in this Section 7.
(ii) For nominations and other business to be properly brought before an annual meeting by a stockholder pursuant to the foregoing paragraph, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such business must be a proper subject for stockholder action. To be timely, a stockholder’s notice to the Secretary must be sent to, either by mail or electronic transmission, and received at the principal executive offices of the Company no later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided , however , that in the event that no annual meeting of stockholders was held in the prior year or the annual meeting is called for a date that is more than thirty (30) days before or more than seventy (70) days after such anniversary date, notice by the stockholder in order to be timely must be so received not earlier than the close of business on the one hundred twentieth (120th) day prior to the annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement (as defined below) of the date of the annual meeting was first made by the Corporation. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. To be in proper written form, a stockholder’s notice to the Secretary must set forth
(A) as to each person whom the stockholder proposes to nominate for election or re-election as a director: (1) all information relating to such person that is required to
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be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to and in accordance with Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (2) such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected;
(B) as to any other business such stockholder proposes to bring before the annual meeting: (1) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (2) the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the By-laws of the Corporation, the language of the proposed amendment), and (3) any substantial interest (within the meaning of Item 5 of Schedule 14A under the Exchange Act) in such business of such stockholder and the beneficial owner within the meaning of Section 13(d) of the Exchange Act), if any, on whose behalf the proposal is made;
(C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made or the business is proposed: (1) the name and record address of such stockholder, and the name and address of such beneficial owner, (2) the class or series and number of shares of capital stock of the Company which are owned of record by such stockholder and such beneficial owner as of the date of the notice, and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for such meeting of the class or series and number of shares of capital stock of the Corporation owned of record by the stockholder and such beneficial owner as of the record date for the meeting (except as otherwise provided in Section 7(a)(iii) below), and (3) a representation that
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the stockholder intends to appear in person or by proxy at the meeting to propose such nomination or business; and
(D) as to the stockholder giving the notice or, if the notice is given on behalf of a beneficial owner on whose behalf the nomination is made or the business is proposed, as to such beneficial owner: (1) the class or series and number of shares of capital stock of the Company which are beneficially owned (as defined below) by such stockholder and such beneficial owner as of the date of the notice, and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for such meeting of the class or series and number of shares of capital stock of the Corporation beneficially owned by the stockholder and such beneficial owner as of the record date for the meeting (except as otherwise provided in Section 7(a)(iii) below), (2) a description of all agreements, arrangements or understandings between or among such stockholder or beneficial owner and any other person or persons (including their names) in connection with the nomination or proposal of such business by such stockholder, including, without limitation, any agreements that would be required to be disclosed pursuant to Item 5 or Item 6 of Exchange Act Schedule 13D (regardless of whether the requirement to file a Schedule 13D is applicable to the stockholder or beneficial owner) and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for such meeting of any such agreement, arrangement or understanding in effect as of the record date for the meeting (except as otherwise provided in Section 7(a)(iii) below), and (3) a description of all agreements, arrangements or understandings (including any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the stockholder’s notice by, or on behalf of, such stockholder or beneficial owner, the effect or intent of which is to mitigate loss,
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manage risk or benefit from changes in the share price of any class of the Corporation’s capital stock, or maintain, increase or decrease the voting power of the stockholder or beneficial owner with respect to shares of stock of the Corporation, and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for such meeting of any such agreement, arrangement or understanding in effect as of the record date for the meeting (except as otherwise provided in Section 7(a)(iii) below).
(iii) The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation, including information relevant to a determination whether such proposed nominee can be considered an independent director. Notwithstanding anything in Section 7(a)(ii) above to the contrary, if the record date for determining the stockholders entitled to vote at any meeting of stockholders is different from the record date for determining the stockholders entitled to notice of the meeting, a stockholder’s notice required by this Section 7(a) shall set forth a representation that the stockholder will notify the Corporation in writing within five business days after the record date for determining the stockholders entitled to vote at the meeting, or by the opening of business on the date of the meeting (whichever is earlier), of the information required under clauses (a)(ii)(C)(2) and (a)(ii)(D)(1)-(3) of this Section 7, and such information when provided to the Corporation shall be current as of the record date for determining the stockholders entitled to vote at the meeting.
(iv) The foregoing notice requirements of this Section 7(a) shall be deemed satisfied by a stockholder with respect to business other than a nomination if the stockholder has notified the Corporation of his or her intention to present the proposal at an annual or special meeting only pursuant to and in compliance with regulations promulgated under the Exchange
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Act and such proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such meeting. Notwithstanding the foregoing provisions of this Section 7(a), a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein; provided , however , that any references in these By-laws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 7(a), and compliance with the requirements under this Section 7(a) shall be the exclusive means for a stockholder to make nominations or submit other business (other than, as provided in the first sentence of this Section 7(a)(iv), business other than nominations brought properly under and in compliance with Rule 14a-8 of the Exchange Act, as may be amended from time to time). Nothing in this Section 7(a) shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or the holders of any series of Preferred Stock to elect directors elected by one or more series of Preferred Stock pursuant to any applicable provisions of the Certificate of Incorporation.
(b) Special Meeting . At a special meeting of the stockholders, only such business shall be conducted as shall be specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (i) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (ii) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the
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Corporation who is a stockholder of record at the time the notice provided for in this Section 7(b) is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and upon such election and who complies with the notice procedures set forth in this Section 7. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the notice required by paragraph (a)(ii) of this Section 7 shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120 th ) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90 th ) day prior to such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(c) General .
(i) No persons shall be nominated for election to the Board of Directors and no business shall be conducted at a meeting of stockholders except nominations and business brought before the meeting in accordance with the procedures set forth in this Section 7, provided , however , that, once business has been properly brought before the meeting in accordance with such procedures, nothing in this Section 7 shall be deemed to preclude discussion by any stockholder of any such business. The Chairman of the Board of Directors shall have the power and duty to determine whether a nomination or any business proposed to be
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brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 7. If the Chairman of the meeting determines that any proposed nomination or business was not properly brought before the meeting in accordance with the foregoing procedures, the Chairman shall declare to the meeting that the business was not properly brought before the meeting and such nomination shall be disregarded and such business shall not be transacted. Notwithstanding the foregoing provisions of this Section 7, unless otherwise required by law, if the stockholder does not provide the information required under clauses (a)(ii)(C)(2) and (a)(ii)(D)(1)-(3) of this Section 7 to the Corporation within the time frames specified herein, or if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 7, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or authorized by a writing executed by such stockholder (or a reliable reproduction or electronic transmission of the writing) delivered to the Corporation prior to the making of such nomination or proposal at such meeting by such stockholder stating that such person is authorized to act for such stockholder as proxy at the meeting of stockholders.
(ii) For purposes of this Section 7, a “ public announcement ” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act. For purposes of clause (a)(ii)(D)(1) of this Section 7, shares shall be treated as “ beneficially
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owned ” by a person if the person beneficially owns such shares, directly or indirectly, for purposes of Section 13(d) of the Exchange Act and Regulations 13D and 13G thereunder or has or shares pursuant to any agreement, arrangement or understanding (whether or not in writing): (A) the right to acquire such shares (whether such right is exercisable immediately or only after the passage of time or the fulfillment of a condition or both), (B) the right to vote such shares, alone or in concert with others and/or (C) investment power with respect to such shares, including the power to dispose of, or to direct the disposition of, such shares.
(iii) Nothing in this Section 7 shall be deemed to affect any rights of the holders of preferred stock of the Corporation to nominate and elect a specified number of directors as provided in the certificate of designations for any such preferred stock.
Section 8 . List of Stockholders Entitled to Vote . The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting. Such list shall be arranged in alphabetical order and shall show the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least ten days prior to the meeting (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of meeting or (b) during ordinary business hours at the principal place of business of the Corporation. If the meeting is to be held at a place, then the list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder of the corporation who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the
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whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.
Section 9 . Stock Ledger . The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 8 of this Article II or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.
Section 10 . Record Date . In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors and which record date: (1) in the case of determination of stockholders entitled to notice of any meeting of stockholders or adjournment thereof, shall not be more than sixty nor less than ten days before the date of such meeting; and (2) in the case of any other action, shall not be more than sixty days prior to such other action. If the Board of Directors fixes a record date for determining the stockholders entitled to notice of any meeting of stockholders or adjournment thereof, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed: (1) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding that day on which notice is given, or, if notice is
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waived, at the close of business on the day next preceding that day on which the meeting is held; and (2) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided , however , that the Board of Directors may fix a new record date for the adjourned meeting.
Section 11 . Inspectors of Election . In advance of any meeting of stockholders, the Board by resolution or the Chairman or Chief Executive Officer may, and shall if required by the GCL, appoint one or more inspectors of election to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is present, ready and willing to act at a meeting of stockholders, the Chairman of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by law, inspectors may be officers, employees or agents of the Corporation. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by law.
Section 12 . Meetings By Remote Communication . If authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxy holders not physically present at a meeting of stockholders may, by means of remote communication:
(a) participate in a meeting of stockholders; and
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(b) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication,
provided that
(i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder;
(ii) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings; and
(iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.
ARTICLE III
DIRECTORS
Section 1 . Number, Election and Qualifications of Directors . The number of directors constituting the Board of Directors shall be fixed as provided in the Certificate of Incorporation. Except as provided in Section 2 of this Article III, directors shall be elected by the stockholders at the annual meetings of stockholders by a plurality of the votes cast, and each director so elected shall hold office until such director’s successor is duly elected and qualified, or until such director’s death, or until such director’s earlier resignation or removal.
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No person shall be eligible to serve as a director after the annual meeting of shareholders coincident with or next following his or her attainment of age seventy (70), unless a majority of the Board then in office approves his or her re-nomination. When any person serving as a director shall cease to be eligible to serve as such pursuant to the foregoing requirement, he or she shall immediately cease to be a director and his or her office shall thereupon become vacant.
Section 2 . Vacancies . Subject to the terms of any one or more classes or series of preferred stock, any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the directors then in office, provided that a quorum is present, or by the affirmative vote of the holders of a majority in voting power of all issued and outstanding capital stock entitled to vote in an election of directors, and any other vacancy occurring on the Board of Directors may be filled by a majority of the Board of Directors then in office, even if less than a quorum, by a sole remaining director, or by the affirmative vote of the holders of a majority in voting power of all issued and outstanding capital stock entitled to vote in an election of directors. Each director so elected shall hold office until the expiration of the term of office of the director whom he or she has replaced and until his or her successor shall be elected and qualified if later. Notwithstanding the foregoing, whenever the holders of any one or more class or classes or series of preferred stock of the Corporation shall have the right, voting separately as a class, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the Certificate of Incorporation.
Section 3 . Duties and Powers . The business of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the
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Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-laws required to be exercised or done by the stockholders.
Section 4 . Organization . At each meeting of the Board of Directors, the Chairman of the Board of Directors, or, in the absence of the Chairman, the Vice Chairman, or in the absence of the Vice Chairman, the director then serving with the longest tenure, shall act as Chairman. The Secretary of the Corporation shall act as Secretary at each meeting of the Board of Directors. In case the Secretary shall be absent from any meeting of the Board of Directors, an Assistant Secretary shall perform the duties of Secretary at such meeting; and in the absence from any such meeting of the Secretary and all the Assistant Secretaries, the Chairman of the meeting may appoint any person to act as Secretary of the meeting.
Section 5 . Resignations and Removal of Directors . Any director of the Corporation may resign at any time, upon notice given in writing or by electronic transmission to the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer or the Secretary of the Corporation. Such resignation shall take effect at the time therein specified or, if no time is specified, immediately; and, unless otherwise specified in such notice, the acceptance of such resignation shall not be necessary to make it effective. Except as otherwise required by law and subject to the rights, if any, of the holders of shares of preferred stock then outstanding, any director or the entire Board of Directors may be removed from office at any time, but only by the affirmative vote of the holders of at least a majority in voting power of the issued and outstanding capital stock of the Corporation entitled to vote in the election of directors.
Section 6 . Meetings . The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors may be held at such time and at such place as may from time to time be
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determined by written or electronic transmission of consent of the Board of Directors and, unless required by resolution of the Board of Directors, without notice. Special meetings of the Board of Directors may be called by the Chairman of the Board of Directors, the Vice Chairman, if there be one, or a majority of the directors then in office. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than forty-eight (48) hours before the date of the meeting, by telephone, facsimile, telegram, electronic transmission or other form of recorded communication or in person on twenty-four (24) hours’ notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances.
Section 7 . Quorum . Except as may be otherwise required by law, the Certificate of Incorporation or these By-laws, at all meetings of the Board of Directors, a majority of the Board of Directors then in office shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meetings at which there is a quorum shall be the act of the Board of Directors. If a quorum should not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting of the time and place of the adjourned meeting, until a quorum shall be present.
Section 8 . Actions of Board . Unless otherwise provided by the Certificate of Incorporation or these By-laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or committee.
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Section 9 . Meetings by Means of Conference Telephone . Unless otherwise provided by the Certificate of Incorporation or these By-laws, members of the Board of Directors of the Corporation, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 9 shall constitute presence in person at such meeting.
Section 10 . Committees . The Board of Directors may, by resolution passed by a majority of the Board of Directors then in office, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. In the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. A quorum for a meeting of a committee shall consist of a majority of the members of the Board appointed to the Committee, whether by the Board or in accordance with this Section. Any committee, to the fullest extent permitted by the GCL and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation. The act of a majority of the committee members present
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at any meeting at which there is a quorum shall be the act of the committee. Each committee shall keep regular minutes and report to the Board of Directors when required.
Section 11 . Compensation . The Board of Directors shall have the authority to fix the compensation of directors for their services. In addition, as determined by the Board of Directors, directors may be reimbursed by the Corporation for their expenses, if any, in the performance of their duties as directors. No such payment shall preclude any director from serving the Corporation in any other capacity, other than as an officer or employee, and receive compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. Directors who are officers or employees of the Corporation shall not receive any compensation except that as may be received in accordance with their status as officers or employees.
ARTICLE IV
OFFICERS
Section 1 . General . The officers of the Corporation shall be chosen by the Board of Directors and shall be a Chairman of the Board of Directors (who must be a director), a Chief Executive Officer, a Secretary and a Treasurer. The Board of Directors, in its discretion, may also choose one or more Presidents, Vice Presidents, Assistant Officers, and any other officers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Certificate of Incorporation or these By-laws. Except in the case of the Chairman of the Board of Directors, the officers need not be directors of the Corporation.
Section 2 . Election . The Board of Directors at its first meeting held after each Annual Meeting of Stockholders shall elect the officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be
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determined from time to time by the Board of Directors; and all officers of the Corporation shall hold office until their successors are chosen and qualified, or until their earlier resignation or removal. Any officer elected by the Board of Directors may be removed at any time, with or without cause, by the affirmative vote of a majority of the Board of Directors then in office. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. The salaries and compensation of all officers of the Corporation shall be fixed by the Board of Directors or a committee thereof. Election of an officer shall not of itself create any contract rights.
Section 3 . Voting Securities Owned by the Corporation . Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chief Executive Officer, any President or any Vice President, and any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.
Section 4 . Chairman of the Board of Directors . The Chairman of the Board of Directors, if there be one, shall preside at all meetings of the stockholders and of the Board of Directors. In the absence or disability of the Chairman of the Board of Directors, or if there be none, the Vice Chairman shall preside at all meetings of the stockholders and the Board of Directors, or in the absence of the Vice Chairman, the director then serving with the longest
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tenure. The Chairman of the Board of Directors may be the Chief Executive Officer of the Corporation. During the absence or disability of the Chief Executive Officer or if the office of Chief Executive Officer is vacant, the Chairman of the Board of Directors shall exercise all the powers and discharge all the duties of the Chief Executive Officer. The Chairman of the Board of Directors shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him or her by these By-laws or by the Board of Directors.
Section 5 . Chief Executive Officer . The Chief Executive Officer shall, subject to the control of the Board of Directors and, if there be one, the Chairman of the Board of Directors, have general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. The Chief Executive Officer shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him or her by these By-laws or by the Board of Directors.
Section 6 . Secretary . The Secretary shall attend all meetings of the Board of Directors and all meetings of stockholders and record all the proceedings of those meetings in a book or books to be kept for that purpose; the Secretary shall also perform like duties for the committees of the Board of Directors when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders, special meetings of the Board of Directors and meetings of committees, and shall perform such other duties as may be prescribed by the Board of Directors or the Chief Executive Officer, under whose supervision the Secretary shall be. If the Secretary shall be unable or shall refuse to cause to be given notice of such meetings, and if there be no Assistant Secretary, then either the Board of Directors or the Chief Executive Officer may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Corporation and the Secretary or any Assistant Secretary, if there be one, shall
23
have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of any such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his or her signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.
Section 7 . Treasurer . The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Chief Executive Officer and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of Treasurer and for the restoration to the Corporation, in case of the Treasurer’s death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Treasurer’s possession or under control of the Treasurer belonging to the Corporation.
Section 8 . Other Officers . Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any officer of the Corporation
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the power to select or appoint such other subordinate officers or committees thereof and to prescribe their respective duties and powers.
ARTICLE V
STOCK
Section 1 . Form of Certificates . The shares of the Corporation shall be uncertificated shares, provided that the Board of Directors may provide by resolution that some or all of any or all classes or series of stock shall be represented by certificates. Unless otherwise determined by the Board of Directors, every holder of stock represented by certificates shall be entitled to have a certificate signed, in the name of the Corporation, (i) by the Chairman of the Board of Directors, the Chief Executive Officer, a President or a Vice President and, (ii) by the officer designated as Chief Financial Officer, the Treasurer or the Secretary, certifying the number of shares owned by such holder of stock in the Corporation in certificate form.
Section 2 . Signatures . Any or all of the signatures on a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.
Section 3 . Lost, Destroyed, Stolen or Mutilated Certificates . The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such allegedly lost, stolen or
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destroyed certificate, or such person’s legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.
Section 4 . Transfers . Stock of the Corporation shall be transferable in the manner prescribed by law, the Certificate of Incorporation and in these By-laws. Transfers of stock shall be made on the books of the Corporation only by the person named in the certificate or by such person’s attorney lawfully constituted in writing and upon (i) the surrender and delivery to the Corporation of the certificate representing such stock and a duly executed instrument authorizing transfer of such stock, if certificated, or delivery of a duly executed instrument authorizing transfer of such stock, if uncertificated, to the person in charge of the stock and transfer books and ledgers, and (ii) payment of all necessary transfer taxes; provided , however , that such surrender and endorsement or payment of taxes shall not be required in any case in which the appropriate officer of the Corporation shall determine to waive such requirement. Every certificate exchanged, returned or surrendered to the Corporation shall be marked “Cancelled,” with the date of cancellation, by the Secretary or Treasurer of the Corporation or the transfer agent thereof. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.
Section 5 . Transfer and Registry Agents . The Corporation may from time to time maintain one or more transfer offices or agencies and registry offices or agencies at such place or places as may be determined from time to time by the Board of Directors.
Section 6 . Beneficial Owners . The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends,
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and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law.
ARTICLE VI
NOTICES
Section 1 . Notices . Whenever written notice is required by law, the Certificate of Incorporation or these By-laws, to be given to any director, member of a committee or stockholder, such notice may be given by mail, addressed to such director, member of a committee or stockholder, at such person’s address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Written notice may also be given personally or by telegram, facsimile, telex, cable, electronic mail or any other means of electronic transmission and shall be deemed given at the time delivered, if delivered personally, or at the time sent for the other alternatives of delivery, provided there is reasonable evidence of such personal delivery or sending maintained by the Secretary.
Section 2 . Waivers of Notice .
(a) Whenever any notice is required by law, the Certificate of Incorporation or these By-laws, to be given to any director, member of a committee or stockholder, a waiver thereof in writing or by electronic transmission, signed, by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting, whether present by person or represented by proxy, shall constitute a waiver of notice of such meeting, except where the person attends the meeting for the express
27
purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened.
(b) Neither the business to be transacted, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need to be specified in any written waiver of notice unless so required by law, the Certificate of Incorporation or these By-laws.
ARTICLE VII
GENERAL PROVISIONS
Section 1 . Dividends . Subject to the requirements of the GCL and the provisions of the Certificate of Incorporation, dividends upon the capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting of the Board of Directors, and may be paid in cash, in property, or in shares of the Corporation’s capital stock. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for purchasing any of the shares of capital stock, warrants, rights, options, bonds, debentures, notes, scrip or other securities or evidences of indebtedness of the Corporation, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any other proper purpose, and the Board of Directors may modify or abolish any such reserve.
Section 2 . Disbursements . All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.
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Section 3 . Fiscal Year . The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.
Section 4 . Corporate Seal . The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
Section 5 . Electronic Transmission . For purposes of these By-laws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
Section 6 . Section Headings . Section headings in these By-laws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.
Section 7 . Inconsistent Provisions; Changes in Delaware Law . If any provision of these By-laws is or becomes inconsistent with any provision of the Certificate of Incorporation, the GCL or any other applicable law, the provision of these By-laws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect. If any of the provisions of the GCL referred to above are modified or superseded, the references to those provisions is to be interpreted to refer to the provisions as so modified or superseded.
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ARTICLE VIII
INDEMNIFICATION
Section 1 . Power to Indemnify in Actions, Suits or Proceedings Other than Those by or in the Right of the Corporation . Subject to Section 3 of this Article VIII, the Corporation shall indemnify and hold harmless to the fullest extent authorized by the GCL, as the same exists or may be amended hereafter, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, arbitral, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director or officer of the Corporation or while a director or officer of the Corporation is or was serving at the request of the Corporation as a director, officer, employee, agent or trustee of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an “indemnitee”), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement by or on behalf of the indemnitee) actually and reasonably incurred by such indemnitee in connection with such action, suit or proceeding if such indemnitee acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, such indemnitee had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that such person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.
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Section 2 . Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation . Subject to Section 3 of this Article VIII, the Corporation shall indemnify and hold harmless to the fullest extent authorized by the GCL, as the same exists or may be amended hereafter, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was an indemnitee, against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of the State of Delaware or such other court shall deem proper.
Section 3 . Authorization of Indemnification . Any indemnification under this Article VIII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the indemnitee is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Such determination shall be made (i) by a majority vote of the directors then in office who are not parties to such action, suit or proceeding, even though less than a quorum, (ii) by a committee of such directors designated by
31
majority vote of such directors, even though less than a quorum (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, (iv) by the stockholders or (v) in the event that a change of control (as defined below) has occurred, by independent legal counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the indemnitee. To the extent, however, that a director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case. Further, advancement of expenses under Section 6 of this Article shall not require prior authorization under this Section 3, provided there has been compliance with the terms of Section 6. For purposes of this Section 3, a “change of control” will be deemed to have occurred if the individuals who, as of the effective date of these By-laws, constitute the Board of Directors (the “incumbent board”) cease for any reason to constitute at least a majority of the Board of Directors; provided , however , that any individual becoming a director subsequent to such effective date whose election, or nomination for election by the stockholders of the Corporation, was approved by a vote of at least a majority of the directors then comprising the incumbent board shall be considered as though such individual were a member of the incumbent board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board of Directors.
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Section 4 . Good Faith Defined . For purposes of any determination under Section 3 of this Article VIII, an indemnitee shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe his or her conduct was unlawful, if such person’s action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the directors or officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise, or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The term “another enterprise” as used in this Section 4 shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. The provisions of this Section 4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 1 or 2 of this Article VIII, as the case may be.
Section 5 . Indemnification by a Court . Notwithstanding any contrary determination in the specific case under Section 3 of this Article VIII, and notwithstanding the absence of any determination thereunder, any indemnitee may apply to the Court of Chancery of the State of Delaware or any other court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Sections 1 and 2 of this Article VIII. The basis of such indemnification by a court shall be a determination by such court that
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indemnification of the indemnitee is proper in the circumstances because such person has met the applicable standards of conduct set forth in Section 1 or 2 of this Article VIII, as the case may be. Neither a contrary determination in the specific case under Section 3 of this Article VIII nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the indemnitee seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 5 shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the indemnitee seeking indemnification shall also be entitled to be paid the expense of prosecuting such application.
Section 6 . Expenses Payable in Advance . Expenses incurred by an indemnitee in defending or investigating a threatened or pending action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such indemnitee to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article VIII.
Section 7 . Nonexclusivity of Indemnification and Advancement of Expenses . The indemnification and advancement of expenses provided by or granted pursuant to this Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation or any By-law, agreement, contract, vote of stockholders or disinterested directors or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. The Corporation may, by action of the Board of Directors, grant rights to indemnification and
34
advancement of expenses to employees or agents or groups of employees or agents of the Corporation with the same scope and effect as the provisions of this Article VIII with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.
Section 8 . Insurance . The Corporation may purchase and maintain insurance on behalf of itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article VIII.
Section 9 . Certain Definitions . For purposes of this Article VIII, references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation, merger or other business combination which, if its separate existence had continued, would have had the power and authority to indemnify its directors and officers, so that any person who is or was a director or officer of such constituent corporation, shall stand in the same position under the provisions of this Article VIII with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. For purposes of this Article VIII, “party” shall include, without limitation, the giving of testimony, the production of documents or other evidence, the appearance as a witness or deponent or any similar involvement in any action, suit or proceeding. For purposes of this Article VIII, references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on,
35
or involves services by, such indemnitee with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article VIII.
Section 10 . Survival of Indemnification and Advancement of Expenses . The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall, unless otherwise expressly provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and personal and legal representatives of such a person.
Section 11 . Limitation on Indemnification . Notwithstanding anything contained in this Article VIII to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 5 hereof), the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) or make advance payment of expenses in connection with a proceeding (or part thereof) initiated by such person, unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Corporation.
Section 12 . Reliance on Provisions . Each person who shall act as a director or officer of the Corporation shall be deemed to be doing so in reliance upon the rights of indemnification and advancement of expenses provided by this Article VIII.
Section 13 . Subrogation . Except as otherwise provided in agreements entered into with the Corporation, in the event of payment under this Article VIII, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of the indemnitee, who
36
shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Corporation effectively to bring suit to enforce such rights.
ARTICLE IX
AMENDMENTS
Section 1 . Amendments . These By-laws may be altered, amended or repealed, in whole or in part, or new By-laws may be adopted, by the Board of Directors or by the stockholders as provided in the Certificate of Incorporation.
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Exhibit 10.1
EXECUTION VERSION
$2,500,000,000
CREDIT AGREEMENT
Dated as of April 2, 2013
among
COTY INC.,
THE LENDERS PARTIES HERETO,
BANK OF AMERICA, N.A.,
BNP PARIBAS,
CREDIT AGRICOLE CORPORATE & INVESTMENT BANK,
DEUTSCHE BANK SECURITIES INC.,
ING BANK N.V.,
MORGAN STANLEY MUFG LOAN PARTNERS, LLC,
and
WELLS FARGO BANK, N.A.
as Syndication Agents,
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
|
|
J.P. MORGAN SECURITIES LLC,
BNP PARIBAS SECURITIES CORP.,
CREDIT AGRICOLE CORPORATE & INVESTMENT BANK,
DEUTSCHE BANK SECURITIES INC.,
ING BANK N.V.,
MERRILL LYNCH PIERCE, FENNER & SMITH INCORPORATED,
MORGAN STANLEY MUFG LOAN PARTNERS, LLC,
and
WELLS FARGO SECURITIES, LLC
as Lead Arrangers and Joint Bookrunners
Table of Contents
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ARTICLE I Definitions |
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1 |
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SECTION 1.1 |
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Defined Terms |
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1 |
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SECTION 1.2 |
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Classification of Loans and Borrowings |
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23 |
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SECTION 1.3 |
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Terms Generally |
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23 |
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SECTION 1.4 |
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Accounting Terms; GAAP |
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24 |
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SECTION 1.5 |
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Currency Conversion |
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24 |
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ARTICLE II The Credits |
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24 |
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SECTION 2.1 |
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Commitments |
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24 |
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SECTION 2.2 |
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Loans and Borrowings |
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25 |
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SECTION 2.3 |
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Requests for Borrowings |
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25 |
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SECTION 2.4 |
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Swingline Loans |
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26 |
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SECTION 2.5 |
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Letters of Credit |
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27 |
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SECTION 2.6 |
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Funding of Borrowings |
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31 |
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SECTION 2.7 |
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Interest Elections |
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32 |
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SECTION 2.8 |
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Termination and Reduction of Commitments |
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33 |
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SECTION 2.9 |
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Repayment of Loans; Evidence of Debt |
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34 |
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SECTION 2.10 |
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Repayment of Term Loans |
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34 |
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SECTION 2.11 |
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Prepayment of Loans |
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35 |
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SECTION 2.12 |
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Fees |
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36 |
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SECTION 2.13 |
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Interest |
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36 |
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SECTION 2.14 |
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Alternate Rate of Interest |
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37 |
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SECTION 2.15 |
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Increased Costs |
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38 |
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SECTION 2.16 |
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Break Funding Payments |
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39 |
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SECTION 2.17 |
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Taxes |
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39 |
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SECTION 2.18 |
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Payments Generally; Pro Rata Treatment; Sharing of Set-offs |
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42 |
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SECTION 2.19 |
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Mitigation Obligations; Replacement of Lenders |
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44 |
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SECTION 2.20 |
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Defaulting Lenders |
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44 |
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SECTION 2.21 |
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Incremental Loans |
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46 |
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SECTION 2.22 |
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Refinancing Term Loans |
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47 |
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ARTICLE III Representations and Warranties |
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SECTION 3.1 |
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Organization; Powers |
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47 |
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SECTION 3.2 |
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Authorization; Enforceability |
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48 |
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SECTION 3.3 |
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Governmental Approvals; No Conflicts |
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48 |
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SECTION 3.4 |
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Financial Condition; No Material Adverse Effect |
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48 |
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SECTION 3.5 |
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Properties |
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48 |
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SECTION 3.6 |
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Litigation and Environmental Matters |
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49 |
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SECTION 3.7 |
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Compliance with Laws and Agreements |
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49 |
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SECTION 3.8 |
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Investment Company Status |
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49 |
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SECTION 3.9 |
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Taxes |
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49 |
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SECTION 3.10 |
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ERISA |
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49 |
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SECTION 3.11 |
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Disclosure |
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50 |
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SECTION 3.12 |
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Subsidiaries |
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50 |
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SECTION 3.13 |
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Solvency |
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50 |
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SECTION 3.14 |
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Senior Indebtedness |
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50 |
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SECTION 3.15 |
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Use of Proceeds; Margin Regulations; OFAC |
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ARTICLE IV Conditions |
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51 |
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SECTION 4.1 |
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Effective Date |
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51 |
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SECTION 4.2 |
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Each Credit Event |
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ARTICLE V Affirmative Covenants |
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SECTION 5.1 |
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Financial Statements and Other Information |
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53 |
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SECTION 5.2 |
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Notices of Material Events |
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54 |
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SECTION 5.3 |
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Existence; Conduct of Business |
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54 |
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SECTION 5.4 |
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Payment of Obligations |
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55 |
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SECTION 5.5 |
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Maintenance of Properties; Insurance |
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55 |
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SECTION 5.6 |
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Books and Records; Inspection and Audit Rights |
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55 |
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SECTION 5.7 |
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Compliance with Laws and Agreements |
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55 |
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SECTION 5.8 |
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Intellectual Property |
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55 |
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SECTION 5.9 |
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Environmental Laws |
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56 |
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SECTION 5.10 |
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Future Guarantors |
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56 |
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ARTICLE VI Negative Covenants |
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56 |
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SECTION 6.1 |
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Financial Condition Covenants |
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56 |
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SECTION 6.2 |
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Priority Debt |
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56 |
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SECTION 6.3 |
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Liens |
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57 |
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SECTION 6.4 |
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Fundamental Changes |
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58 |
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SECTION 6.5 |
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Asset Sales |
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58 |
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SECTION 6.6 |
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Restricted Payments; Certain Payments of Subordinated Indebtedness |
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59 |
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SECTION 6.7 |
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Limitations on Modifications of Subordinated Indebtedness |
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60 |
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SECTION 6.8 |
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Transactions with Affiliates |
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60 |
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SECTION 6.9 |
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Restrictive Agreements |
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60 |
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ARTICLE VII Events of Default |
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61 |
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ARTICLE VIII The Administrative Agent |
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ARTICLE IX Miscellaneous |
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65 |
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SECTION 9.1 |
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Notices |
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65 |
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SECTION 9.2 |
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Waivers; Amendments |
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65 |
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SECTION 9.3 |
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Judgment Currency |
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66 |
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SECTION 9.4 |
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Expenses; Indemnity; Damage Waiver |
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67 |
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SECTION 9.5 |
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Successors and Assigns; Participations and Assignments |
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68 |
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SECTION 9.6 |
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Survival |
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71 |
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SECTION 9.7 |
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Counterparts; Integration; Effectiveness |
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71 |
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SECTION 9.8 |
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Severability |
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71 |
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SECTION 9.9 |
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Right of Setoff |
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71 |
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SECTION 9.10 |
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Governing Law; Jurisdiction; Consent to Service of Process |
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71 |
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SECTION 9.11 |
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WAIVER OF JURY TRIAL |
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72 |
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SECTION 9.12 |
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Headings |
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72 |
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SECTION 9.13 |
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Confidentiality |
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72 |
ii
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SECTION 9.14 |
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Releases of Guarantees |
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73 |
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SECTION 9.15 |
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USA Patriot Act |
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73 |
iii
SCHEDULES:
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Schedule 1.1 |
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Subsidiary Guarantors |
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Schedule 2.1 |
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Commitments |
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Schedule 2.5 |
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Existing Letters of Credit |
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Schedule 3.6 |
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Disclosed Matters |
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Schedule 3.12 |
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Subsidiaries |
EXHIBITS:
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Exhibit A |
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Form of Assignment and Assumption |
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Exhibit B-1 |
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Form of Opinion of General Counsel |
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Exhibit B-2 |
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Form of Opinion of Gibson, Dunn & Crutcher LLP |
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Exhibit C |
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Form of Subsidiary Guarantee |
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Exhibit D |
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Form of Affiliate Subordinated Note |
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Exhibit E |
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Form of Tax Certificate |
iv
CREDIT AGREEMENT, dated as of April 2, 2013 (this “ Agreement ”), among COTY INC., a Delaware corporation (the “ Borrower ”), the banks, financial institutions or other entities from time to time parties to this Agreement (as more specifically defined below, the “ Lenders ”) BNP PARIBAS, CREDIT AGRICOLE CORPORATE & INVESTMENT BANK, DEUTSCHE BANK SECURITIES INC., ING BANK N.V., BANK OF AMERICA, N.A., MORGAN STANLEY MUFG LOAN PARTNERS, LLC and WELLS FARGO BANK, N.A. as syndication agents (in such capacities, the “ Syndication Agents ”), and JPMORGAN CHASE BANK, N.A., as administrative agent .
The parties hereto hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.1 Defined Terms . As used in this Agreement, the following terms have the meanings specified below:
“ ABR ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.
“ Additional Lender ” has the meaning set forth in Section 2.21.
“ Adjusted Eurocurrency Rate ” means, with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to (a) the Eurocurrency Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate, plus with respect to any Eurocurrency Borrowing funded in Sterling through a branch of any Lender which is located in the United Kingdom, the cost certified by such Lender to the Administrative Agent to be the cost to that Lender of compliance with the Mandatory Liquid Asset requirements of the Bank of England during such Interest Period, expressed as a percentage rate per annum.
“ Administrative Agent ” means JPMorgan Chase Bank, N.A., together with its affiliates, as an arranger of the Commitments and as the administrative agent for the Lenders under this Agreement and the other Loan Documents, together with any of its successors; it being understood that matters concerning Qualified Foreign Currency Loans will be administered by J.P. Morgan Europe Limited and therefore all notices concerning such Loans will be required to be given at the London Administrative Office.
“ Administrative Office ” means the New York Administrative Office or the London Administrative Office, as applicable.
“ Administrative Questionnaire ” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“ Affiliate ” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“ Affiliate Subordinated Indebtedness ” means unsecured Indebtedness of the Borrower owing to any holder of Capital Stock of the Borrower, provided that such Indebtedness has substantially the terms specified in the form of Affiliate Subordinated Note attached as Exhibit D hereto (with such
modifications as may be approved by the Administrative Agent in connection with the inclusion of Indebtedness of the Parent incurred as “Senior Indebtedness” for the purposes of any such Affiliate Subordinated Note).
“ Agreement ” has the meaning set forth in the preamble.
“ Alternate Base Rate ” means, for any day, a rate per annum equal to the highest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1% and (c) the Eurocurrency Rate that would be calculated as of such day (or, if such day is not a Business Day, as of the next preceding Business Day) in respect of a proposed Eurocurrency Loan denominated in Dollars (or, in the case of Swingline Loans, the relevant currency) with a one-month Interest Period plus 1.0%. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or such Eurocurrency Rate shall be effective from and including the effective date of such change in Prime Rate, the Federal Funds Effective Rate or such Eurocurrency Rate, respectively.
“ Applicable Rate ” means:
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(a) in the case of Term Loans (except Incremental Term Loans), a per annum rate determined pursuant to the pricing grid set forth below: |
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Consolidated Leverage Ratio |
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ABR Spread |
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Eurocurrency Spread |
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Greater than or equal to 2.75 to 1.0 |
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0.500 |
% |
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1.500 |
% |
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Greater than or equal to 2.0 to 1.0 and less than 2.75 to 1.0 |
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0.375 |
% |
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1.375 |
% |
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Greater than or equal to 1.5 to 1.0 and less than 2.0 to 1.0 |
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0.125 |
% |
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1.125 |
% |
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Less than 1.5 to 1.0 |
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0.000 |
% |
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1.000 |
% |
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(b) in the case of the Revolving Facility, a per annum rate determined pursuant to the pricing grid set forth below: |
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Consolidated Leverage Ratio |
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ABR
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Eurocurrency
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Facility Fee
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Greater than or equal to 2.75 to 1.0 |
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0.275 |
% |
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1.275 |
% |
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0.225 |
% |
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Greater than or equal to 2.0 to 1.0 and less than 2.75 to 1.0 |
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0.175 |
% |
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1.175 |
% |
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0.200 |
% |
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Greater than or equal to 1.5 to 1.0 and less than 2.0 to 1.0 |
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0.000 |
% |
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0.950 |
% |
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0.175 |
% |
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Less than 1.5 to 1.0 |
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0.000 |
% |
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0.850 |
% |
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0.150 |
% |
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(c) in the case of Incremental Term Loans and Refinancing Term Loans, such per annum rates as shall be agreed to by the Borrower and the applicable Incremental Term Lenders or Refinancing Term Loans Lenders. |
2
For purposes of the foregoing, (i) the Consolidated Leverage Ratio shall be determined as of the end of each fiscal quarter of the Borrower’s fiscal year for the four fiscal quarters then ended based upon the Borrower’s consolidated financial statements delivered pursuant to Section 5.1(a) or (b) and (ii) each change in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall be effective during the period commencing on and including the date that is three Business Days after the delivery to the Administrative Agent of such consolidated financial statements indicating such change (each, an “ Adjustment Date ”) and ending on the date immediately preceding the next succeeding Adjustment Date on which a further change becomes applicable; provided that the Consolidated Leverage Ratio shall be deemed to be greater than or equal to 2.75 to 1.0 if the Borrower fails to deliver the consolidated financial statements required to be delivered by it pursuant to Section 5.1(a) or (b), during the period from the expiration of the time for delivery thereof until the date that is three Business Days after such consolidated financial statements are delivered.
In addition, at all times while an Event of Default shall have occurred and be continuing, the highest rate set forth under the column entitled “Facility Fee Rate” of the pricing grid immediately above shall apply for the facility fee.
“ Assignee ” has the meaning set forth in Section 9.5(b).
“ Assignment and Assumption ” means an Assignment and Assumption entered into by a Lender and an Assignee (with the consent of any party whose consent is required by Section 9.5), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.
“ Bankruptcy Event ” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or, other than via an Undisclosed Administration, has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.
“ Base Leverage Ratio ” means 3.50 to 1.0.
“ Benckiser Family Member ” shall mean the lineal descendants, by natural birth or by or through adoption prior to the attainment of their eighteenth birthday, of Dr. Albert Reimann (born in 1898 and died in 1984), including without limitation, the lineal descendants by natural birth or by or through adoption prior to the attainment of their eighteenth birthday of persons who qualify as lineal descendants of said Dr. Albert Reimann by reason of their and/or their ancestors’ adoption prior to the attainment of their eighteenth birthday, as well as the surviving spouses of any such lineal descendant of Dr. Albert Reimann, after such descendant’s death, if such surviving spouse is also a stockholder of Donata Holding SE and/or Parentes Holding SE.
“ Benckiser Controlled Trust ” shall mean any trust the primary beneficiaries of which are Benckiser Family Members (“Benckiser Beneficiaries”). For purposes of this definition, the primary beneficiaries of a trust will be deemed to be Benckiser Beneficiaries if, under the maximum exercise of
3
discretion by the trustee in favor of persons who are not Benckiser Beneficiaries, the value of the interests of such persons in such trust, computed actuarially, is less than 50%. The factors and methods prescribed in section 7520 of the Internal Revenue Code of 1986, as amended, for use in ascertaining the value of certain interests shall be used in determining a beneficiary’s actuarial interest in a trust for purposes of applying this definition. For purposes of this definition, the actuarial value of the interest in a trust of any person in whose favor a testamentary power of appointment may be exercised shall be deemed to be zero. For purposes of this definition, in the case of a trust created by a Benckiser Family Member, the actuarial value of the interest in such trust of any person who may receive trust property only at the termination of the trust and then only in the event that, at the termination of the trust, there are no living issue of such Benckiser Family Member shall be deemed to be zero.
“ Blockage Amount ” has the meaning set forth in Section 2.4(b).
“ Board ” means the Board of Governors of the Federal Reserve System of the United States of America.
“ Borrower ” has the meaning set forth in the preamble.
“ Borrowing ” means (a) Loans of the same Class and Type, made, converted or continued on the same date and, in the case of Eurocurrency Loans, as to which a single Interest Period is in effect, or (b) a Swingline Loan.
“ Borrowing Request ” means a request by the Borrower for a Borrowing in accordance with this Agreement.
“ Business Day ” means any day that (a) is not a Saturday or Sunday and (b)(i) when used in connection with a Loan denominated in Euros, is a TARGET Settlement Day, (ii) when used in connection with a Loan denominated in Dollars, is a New York Business Day, provided , that if such Loan is a Eurocurrency Loan, such day is also a London Business Day, (iii) when used in connection with a Loan denominated in any other currency, is a day on which dealings in such currency can occur in the London interbank market and on which banks are open for business in the principal financial center for that currency and (iv) when used in connection with matters not relating to Loans, is a New York Business Day.
“ Calculation Date ” means two Business Days prior to the last Business Day of each fiscal quarter (or any other day selected by the Administrative Agent when an Event of Default has occurred and is continuing (each, an “ Optional Calculation Date ”)); provided , that the second Business Day preceding each borrowing date with respect to any Qualified Foreign Currency Loan and each Letter of Credit denominated in a Qualified Foreign Currency shall also be a “Calculation Date” with respect to the relevant Qualified Foreign Currency; provided , further , that the second Business Day preceding each date on which any Qualified Foreign Currency Loan is extended or rolled-over shall also be a “Calculation Date” with respect to the relevant Qualified Foreign Currency.
“ Capital Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal Property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“ Capital Stock ” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a
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Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.
“ Change in Control ” means (a) at any time prior to an IPO, the Owner Group shall cease to have the power, directly or indirectly, to vote or direct the voting of securities having a majority of the ordinary voting power for the election of directors of the Borrower (determined on a fully diluted basis); (b) at any time after an IPO, (i)(A) any person or group (within the meaning of Sections 13(d) and 14(d) under the Exchange Act), other than the Owner Group, acquires the power, directly or indirectly, to vote or direct the voting of securities having more than 30% of the ordinary voting power for the election of directors of the Borrower (determined on a fully diluted basis) and (B) the Owner Group shall cease to be the ultimate “beneficial owner” (as defined in Rules 13d-3 and 13d5 under the Exchange Act), directly or indirectly, of a greater percentage of the securities having the ordinary voting power for the election of directors of the Borrower (determined on a fully diluted basis) than such other person or group (within the meaning of Sections 13(d) and 14(d) under the Exchange Act) or (ii) at any time after an IPO, the board of directors of the Borrower shall cease to consist of a majority of Continuing Directors; or (c) the occurrence of any change in control (or any defined term having a similar purpose) under the documentation governing the Borrower’s Notes issued June 16, 2010 in the original aggregate principal amount of $500,000,000.
“ Change in Law ” means (a) the adoption of any law, rule or regulation after the Effective Date, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the Effective Date or (c) compliance by any Lender or Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s or Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the Effective Date. Notwithstanding anything herein to the contrary, (i) all requests, rules, guidelines, requirements and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or by United States or foreign regulatory authorities, in each case pursuant to Basel III, and (ii) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder or issued in connection therewith or in implementation thereof, shall in each case be deemed to be a Change in Law, regardless of the date enacted, adopted, issued or implemented; provided that the determination by any Lender of any additional amount owing to it, to the extent (but only to the extent) claimed in reliance on this sentence, shall be made in good faith in a manner generally consistent with such Lender’s standard practices.
“ Class ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Term Loans, Incremental Loans, Refinancing Term Loans or Swingline Loans.
“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.
“ Commitment ” means, as to any Lender, the sum of the Term Loan Commitment and the Revolving Commitment of such Lender.
“ Conduit Lender ” means any special purpose corporation organized and administered by any Lender for the purpose of making Loans otherwise required to be made by such Lender and designated by such Lender in a written instrument; provided , that the designation by any Lender of a Conduit Lender shall not relieve the designating Lender of any of its obligations to fund a Loan under this Agreement if, for any reason, its Conduit Lender fails to fund any such Loan, and the designating Lender (and not the Conduit Lender) shall have the sole right and responsibility to deliver all consents and waivers required or requested under this Agreement with respect to its Conduit Lender and to exercise all
5
rights and remedies under this Agreement with respect to its Conduit Lender, and provided , further , that no Conduit Lender shall (a) be entitled to receive any greater amount pursuant to Section 2.15, 2.17 and 9.4 than the designating Lender would have been entitled to receive in respect of the extensions of credit made by such Conduit Lender or (b) be deemed to have any Commitment.
“ Consolidated EBITDA ” for any period, Consolidated Net Income for such period plus , without duplication and to the extent reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of (a) total income tax expense, (b) interest expense, amortization or write-off of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness (including the Loans), (c) depreciation and amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and organization costs, (e) charges incurred during such period in connection with restructuring or reorganization changes, including without limitation post-closing restructuring, reorganization and/or integration charges or costs, (f) non-recurring fees and expenses relating to consummated acquisitions of property or a series of related acquisitions of property, provided that for purposes of clause (e) and this clause (f) the aggregate amount of such charges, fees and expenses shall not exceed in any rolling four quarter period an amount equal to 15% of Consolidated EBITDA for such period (determined without giving effect to the charges, fees and expenses in clause (e) and this clause (f)), (g) non-recurring acquisition expenses relating to non-consummated acquisitions, provided that for purposes of this clause (g) any such expenses shall not exceed $30,000,000 in the aggregate during the term of this Agreement, (h) non-recurring transaction costs, fees and expenses incurred in connection with any IPO and any follow-on public offerings of the Capital Stock of the Borrower whether or not consummated, and (i) any other non-cash charges (not including accruals) and minus , to the extent included in the statement of such Consolidated Net Income for such period, the sum of (a) interest income and (b) any other non-cash income (not including accruals), all as determined on a consolidated basis. For the purposes of calculating Consolidated EBITDA for any period of four consecutive fiscal quarters (each, a “ Reference Period ”) pursuant to any determination of the Consolidated Leverage Ratio, (i) if at any time during such Reference Period the Borrower or any Subsidiary shall have made any Significant Disposition, the Consolidated EBITDA for such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the property that is the subject of such Significant Disposition for such Reference Period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such Reference Period and (ii) if during such Reference Period the Borrower or any Subsidiary shall have made a Significant Acquisition, Consolidated EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto as if such Significant Acquisition occurred on the first day of such Reference Period. As used in this definition, “ Significant Acquisition ” means any acquisition of property or series of related acquisitions of property that (a) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes all or substantially all of the common stock of a Person and (b) involves the payment of consideration by the Borrower and its Subsidiaries in excess of $20,000,000; and “ Significant Disposition ” means any Disposition of property or series of related Dispositions of property that yields gross proceeds to the Borrower or any of its Subsidiaries in excess of $20,000,000.
“ Consolidated Interest Coverage Ratio ” for any period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for such period.
“ Consolidated Interest Expense ” for any period, total cash interest expense (including that attributable to Capital Lease Obligations) of the Borrower and its Subsidiaries that is payable during such period with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries (including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and net costs under Interest Rate Protection Agreements to the extent such net costs are allocable to interest expense for such period in accordance with GAAP), reduced by the amount of cash interest income earned during such period.
6
“ Consolidated Leverage Ratio ” as at the last day of any period, the ratio of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA for such period.
“ Consolidated Net Income ” for any period, the consolidated net income (or loss) of the Borrower and its Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided , that there shall be excluded (a) except as otherwise expressly provided herein, the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary) in which the Borrower or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Borrower or such Subsidiary in the form of dividends and (c) the undistributed earnings of any Subsidiary that is not a Loan Party to the extent that the declaration or payment of dividends by such Subsidiary is not at the time permitted by the terms of any Contractual Obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary.
“ Consolidated Total Debt ” means at any date, an amount equal to (a) the aggregate principal amount of all Indebtedness of the Borrower and its Subsidiaries (excluding (i) contingent obligations in respect of undrawn letters of credit, (ii) Affiliate Subordinated Indebtedness ( provided that on the date of incurrence of such Affiliate Subordinated Indebtedness, no Default or Event of Default shall have been in existence) and (iii) obligations in respect of the deferred purchase price of Property or services) at such date minus (b) the aggregate amount of cash and Permitted Investments held at such date by the Borrower and its Subsidiaries, in each case free and clear of any Lien, but only to the extent that the aggregate amount of such cash and Permitted Investments exceeds $25,000,000, determined on a consolidated basis in accordance with GAAP.
“ Continuing Directors ” means the directors of the Borrower on the date of an IPO and each other director, if, in each case, such other director’s election to the board of directors of the Borrower is recommended by, or such other director’s election is approved by, at least a majority of the then Continuing Directors.
“ Contractual Obligation ” as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its Property is bound.
“ Control ” means the possession, directly or indirectly, of the power either to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.
“ Copyright Licenses ” means all agreements providing for the grant of any interest in a Copyright by or to any Person.
“ Copyrights ” means all current and future copyrights and copyrightable works, registered or unregistered, and all other rights therein or derived therefrom, and all registrations, applications, recordings, renewals or extensions relating thereto.
“ Credit Increase ” has the meaning set forth in Section 2.21.
“ Credit Party ” means the Administrative Agent, the Issuing Lender, the Swingline Lender or any other Lender.
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“ Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
“ Defaulting Lender ” means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Credit Party or the Borrower, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s and the Borrower’s receipt of such certification in form and substance satisfactory to them and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.
“ Determination Date ” means the last Business Day of each month and each date that is two Business Days after any Optional Calculation Date.
“ Disclosed Matters ” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.6.
“ Disposition ” with respect to any Property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof; and the terms “ Dispose ” and “ Disposed of ” shall have correlative meanings.
“ Dollar Equivalent ” means, with respect to an amount of any Qualified Foreign Currency on any date, the amount of Dollars that may be purchased with such amount of such currency at the Spot Exchange Rate (determined as of the most recent Calculation Date) with respect to such currency on such date.
“ Dollars ”, “ dollars ” or “ $ ” refers to lawful money of the United States of America.
“ Domestic Subsidiary ” means any Subsidiary that is not a Foreign Subsidiary.
“ Effective Date ” means the date on which the conditions specified in Section 4.1 are satisfied (or waived in accordance with Section 9.2), which date is April 2, 2013.
“ Eligible Assignee ” means (a) a commercial bank organized under the laws of the United States, or any state thereof, and having total assets in excess of $1,000,000,000 or (b) a commercial bank organized under the laws of any country that is a member of the Organization for Economic Cooperation and Development, or under the laws of a political subdivision of any such country, and having total assets in excess of $1,000,000,000; provided that such bank is acting through a branch or agency located in such country or the United States.
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“ Environmental Laws ” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.
“ Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities) of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ ERISA Affiliate ” means any trade or business (whether or not incorporated) that, together with the Borrower or any Subsidiary, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(m) of the Code.
“ ERISA Event ” means (a) the failure of any Plan, or any of the Borrower or any ERISA Affiliate to comply with any applicable provisions of ERISA and/or the Code (and applicable regulations under either) or with the terms of any such Plan; (b) the existence with respect to Borrower or any ERISA Affiliate or any Plan of a Prohibited Transaction; (c) any Reportable Event; (d) the failure of Borrower or any ERISA Affiliate to make by its due date a required installment under Section 430(j) of the Code with respect to any Plan or any failure by any Plan to satisfy the minimum funding standards (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (e) a determination that any Plan is, or is expected to be, in “at risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA); (f) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (g) the occurrence of any event or condition which might constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Plan or the incurrence by the Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan, including but not limited to the imposition of any Lien in favor of the PBGC or any Plan; (h) the receipt by the Borrower, any Subsidiary or any ERISA Affiliate from PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan under Section 4042 of ERISA; (i) the failure by Borrower, any Subsidiary or any ERISA Affiliate to make any required contribution to a Multiemployer Plan; (j) the incurrence by the Borrower, any Subsidiary or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; (k) the receipt by the Borrower, any Subsidiary or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower, any Subsidiary or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, Insolvent, in Reorganization, in “endangered” or “critical” status (within the meaning of Section 432 of the Code or Section 305 of ERISA), or terminated (within the meaning of Section 4041A of ERISA; (l) the failure by the Borrower, any Subsidiary or any ERISA Affiliate to pay when due (after expiration of any applicable grace period) any installment payment with respect to Withdrawal Liability under Section 4201 of ERISA; and (m) a Foreign Plan Event.
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“ Euro ” means the lawful single currency of participating member states of the European Monetary Union.
“ Eurocurrency ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted Eurocurrency Rate.
“ Eurocurrency Rate ” means, with respect to any Eurocurrency Borrowing for any Interest Period, the rate appearing on the relevant page of the Reuters screen (or any successor to or substitute for such screen, providing rate quotations comparable to those currently provided on such page of such screen, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to deposits in Dollars or the relevant Qualified Foreign Currency, as the case may be, in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to (and in the case of a Sterling Borrowing on the day of) the commencement of such Interest Period, as the rate for deposits in such currency with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the “ Eurocurrency Rate ” with respect to such Eurocurrency Borrowing for such Interest Period shall be the rate at which deposits in the relevant currency of $5,000,000 (or the appropriate equivalent thereof) and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the relevant interbank market at approximately 11:00 a.m., London time, two Business Days prior to (and in the case of a Sterling Borrowing on the day of) the commencement of such Interest Period.
“ Event of Default ” has the meaning assigned to such term in Article VII.
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.
“ Excluded Taxes ” means, with respect to the Administrative Agent, any Lender, any Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder, (a) income, franchise or similar taxes imposed on (or measured by) its net income (i) by the United States of America or any political subdivision thereof, (ii) by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located, (iii) in the case of any Lender, in which its applicable lending office is located or (iv) imposed solely by reason of the Administrative Agent, such Lender, such Issuing Bank or such other recipient, as the case may be, doing business in the jurisdiction imposing such tax, other than as a result of this Agreement or any other Loan Document or any transaction contemplated hereby or thereby, (b) any branch profits taxes imposed by the United States of America or any political subdivision thereof or any similar tax imposed by any other jurisdiction in which the Borrower is located, (c) in the case of a Foreign Lender (other than an Assignee pursuant to a request by the Borrower under Section 2.19(b)), any United States withholding tax resulting from any Requirement of Law in effect on the date such Foreign Lender becomes a party to this Agreement (or designates a new lending office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such United States withholding tax pursuant to Section 2.17(a), (d) any United States withholding tax that is attributable to such Foreign Lender’s failure to comply with Section 2.17(e) and (e) any United States withholding tax imposed under FATCA.
“ Existing Credit Agreement ” means the Credit Agreement dated as of August 22, 2011, as amended, among the Borrower, certain of its Subsidiaries, the lenders parties thereto, JPMorgan Chase Bank, N.A., as administrative agent, and certain other parties.
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“ Existing Letters of Credit ” means the letters of credit listed on Schedule 2.5 hereto.
“ FATCA ”: Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
“ Federal Funds Effective Rate ” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
“ Fee Payment Date ” means each date that is three Business Days after the last Business Day of each March, June, September and December.
“ Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.
“ Foreign Lender ” means any Lender that is not organized under the laws of the United States of America, any State thereof or the District of Columbia.
“ Foreign Plan Event ” means with respect to each employee pension benefit plan (within the meaning of Section 3(3) of ERISA, whether or not subject to ERISA) that is not subject to US law and is maintained or contributed to by the Borrower, any other Loan Party or any ERISA Affiliate (any of the foregoing, a “Foreign Plan”): (A) the failure to make or, if applicable, accrue in accordance with normal accounting practices, any employer or employee contributions required by applicable law or by the terms of any Foreign Plan; (B) the failure to register or loss of good standing with applicable regulatory authorities of any Foreign Plan required to be registered; or (C) the failure of any Foreign Plan to comply with any material provisions of applicable law and regulations or with the material terms of such Foreign Plan.
“ Foreign Subsidiary ” means any Subsidiary that is organized under the laws of a jurisdiction other than any State of the United States of America or the District of Columbia.
“ Fronting Fee Rate ” means a rate per annum separately agreed to between the Borrower and the relevant Issuing Bank.
“ GAAP ” means generally accepted accounting principles in the United States of America.
“ Governmental Authority ” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including, without limitation, any European central bank or other similar agency, authority or regulatory body).
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“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease Property, securities or services for the purpose of assuring the owner of such Indebtedness of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided , that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.
“ Hazardous Materials ” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
“ Holdings ” means any Person formed in connection with an acquisition and/or the financing thereof as to which the Borrower is a direct or indirect subsidiary, it being understood that the foregoing shall not include any Person formed directly or indirectly by the Owner Group in connection with an acquisition not intended to be integrated with the business of the Borrower and its Subsidiaries.
“ Immaterial Subsidiary ” means one or more Domestic Subsidiaries, as to which the (i) assets, (ii) revenues and (iii) earnings before interest, taxes, depreciation and amortization (excluding intercompany receivables and revenues that would be eliminated upon consolidation in accordance with GAAP) of which do not, in the case of each of clauses (i), (ii) and (iii) in the aggregate for all such Domestic Subsidiaries, at the time of determination (determined, in the case of clauses (ii) and (iii), in respect of the most recent period of four consecutive fiscal quarters of the Borrower for which the relevant financial information is available), exceed five percent of the consolidated assets, consolidated revenues or Consolidated EBITDA (excluding intercompany receivables and revenue that would be eliminated upon consolidation in accordance with GAAP), respectively, of the Borrower and its Subsidiaries at such time.
“ Incremental Amendment ” has the meaning set forth in Section 2.21.
“ Incremental Term Loans ” has the meaning set forth in Section 2.21.
“ Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to Property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of Property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all obligations of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on Property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) the liquidation value of all redeemable preferred Capital Stock of such Person (excluding preferred Capital Stock of the Borrower), (k) all obligations, contingent or
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otherwise, of such Person in respect of bankers’ acceptances and (l) to the extent not otherwise included, indebtedness or other similar obligations (including, if applicable, net investment amounts) pursuant to any Permitted Receivables Facility. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
“ Indemnified Taxes ” means Taxes other than Excluded Taxes.
“ Information Memorandum ” means the Confidential Information Memorandum dated March 2013 relating to the Borrower and the Transactions.
“ Infringement ” means infringement, imitation, dilution, misappropriation, other impairment, or unauthorized use or conduct in derogation of.
“ Insolvent ” means, with respect to any Multiemployer Plan, the condition that such plan is insolvent within the meaning of Section 4245 of ERISA.
“ Intellectual Property ” means the aggregate of the Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses, and all other intellectual property, including without limitation, trade secrets, technology, know-how and confidential information, and (a) the right to sue or otherwise recover for any and all past, present and future Infringement of the foregoing, (b) all income, royalties, damages, settlements and other payments now and hereafter due and/or payable with respect to the foregoing and (c) all other rights, privileges and priorities of any Person with respect to all U.S., state and foreign intellectual property.
“ Interest Election Request ” means a request by the Borrower to convert or continue a Revolving Borrowing or Term Borrowing in accordance with Section 2.7.
“ Interest Payment Date ” means (a) with respect to any ABR Loan (other than a Swingline Loan), the last day of each March, June, September and December, (b) with respect to any Eurocurrency Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurocurrency Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period, and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid.
“ Interest Period ” means, with respect to any Eurocurrency Borrowing, the period commencing on the date of such Borrowing and ending one week thereafter or on the numerically corresponding day in the calendar month that is one, two, three or six months (or if agreed to by each relevant Lender, nine or twelve, months) thereafter, as the Borrower may elect; provided , that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.
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“ Interest Rate Protection Agreement ” means any interest rate protection agreement, interest rate futures contract, interest rate option, interest rate cap or other interest rate hedge arrangement, to or under which the Borrower or any Subsidiary is a party or a beneficiary on the date hereof or becomes a party or a beneficiary after the date hereof.
“ IPO ” means an initial public offering of the common Capital Stock of the Borrower pursuant to an effective registration statement under the Securities Act of 1933, as amended.
“ Issuing Bank ” means JPMorgan Chase Bank, N.A., in its capacity as the issuer of Letters of Credit, and its successors in such capacity as provided in Section 2.5(i). The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing Bank reasonably acceptable to the Borrower, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.
“ Joint Lead Arrangers ” means the entities listed as Joint Lead Arrangers and Joint Bookrunners on the cover page hereto.
“ Judgment Currency ” has the meaning set forth in Section 9.3.
“ Judgment Currency Conversion Date ” has the meaning set forth in Section 9.3.
“ L/C Disbursement ” means a payment made by any Issuing Bank pursuant to a Letter of Credit.
“ L/C Exposure ” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time that are denominated in Dollars, plus (b) the Dollar Equivalent at such time of the aggregate undrawn amount of all outstanding Letters of Credit at such time that are denominated in Qualified Foreign Currencies, plus (c) the aggregate principal amount of all L/C Disbursements in respect of Letters of Credit denominated in Dollars that have not yet been reimbursed at such time, plus (d) the Dollar Equivalent at such time of the aggregate principal amount of all L/C Disbursements in respect of Letters of Credit denominated in Qualified Foreign Currencies that have not yet been reimbursed at such time. The L/C Exposure of any Revolving Lender at any time shall mean its Revolving Percentage of the aggregate L/C Exposure at such time.
“ Lender Parent ” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a Subsidiary.
“ Lenders ” means the Persons listed on Schedule 2.1 and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term “Lenders” includes each Swingline Lender and each Issuing Bank.
“ Letter of Credit ” means any letter of credit issued pursuant to this Agreement.
“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effects as any of the foregoing) relating to such asset, (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities and (d) any similar or equivalent rights or encumbrances under the laws of foreign jurisdictions.
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“ Loan ” means any loan made by any Lender to the Borrower pursuant to this Agreement.
“ Loan Documents ” means this Agreement and the Subsidiary Guarantee.
“ Loan Parties ” means the Borrower and the Subsidiary Guarantors.
“ London Administrative Office ” means the Administrative Agent’s office located at 25 Bank Street, Canary Wharf, London, or such other office in London as may be designated by the Administrative Agent by written notice to the Borrower and the Lenders.
“ London Business Day ” means any day on which banks are open for general business in London.
“ Material Acquisition ” means any acquisition of property or series of related acquisitions of property that (a) constitutes assets comprising of all or substantially all of an operating unit or brand of a business or constitutes all or substantially all of the common stock of a Person and (b) involves the payment of consideration or assumption of Indebtedness by the Borrower and its Subsidiaries in excess of $350,000,000.
“ Material Adverse Effect ” means a material adverse effect on (a) the business, results of operations, assets or financial condition of the Borrower and its Subsidiaries taken as a whole, or (b) the validity or enforceability of any of the Loan Documents or the rights and remedies of the Administrative Agent and the Lenders thereunder.
“ Material Domestic Subsidiary ” means any Domestic Subsidiary whose (a) assets, (b) revenues and (c) earnings before interest, taxes, depreciation and amortization (excluding intercompany receivables and revenues that would be eliminated upon consolidation in accordance with GAAP), at the time of determination (determined, in the case of clauses (b) and (c), in respect of the most recent period of four consecutive fiscal quarters of the Borrower for which the relevant financial information is available), in each case exceed $5,000,000.
“ Material Subsidiary ” means (a) any Subsidiary (other than a joint venture), the (i) assets, (ii) revenues or (iii) earnings before interest, taxes, depreciation and amortization (excluding intercompany receivables and revenues that would be eliminated upon consolidation in accordance with GAAP) of which are, at the time of determination (determined, in the case of clauses (ii) and (iii), in respect of the most recent period of four consecutive fiscal quarters of the Borrower for which the relevant financial information is available), equal to or greater than five percent of the consolidated assets, consolidated revenues or Consolidated EBITDA (excluding intercompany receivables and revenue that would be eliminated upon consolidation in accordance with GAAP), respectively, of the Borrower and its Subsidiaries at such time or (b) any Material Domestic Subsidiary (other than a joint venture).
“ Maturity Date ” means the fifth anniversary of the Effective Date.
“ Maximum Leverage Ratio ” means the Base Leverage Ratio; provided that for the four consecutive fiscal quarters ended immediately following the closing of a Material Acquisition (including the fiscal quarter in which such Material Acquisition occurs), the Maximum Leverage Ratio shall be the Post-Acquisition Leverage Ratio; provided, however, that, immediately after any such four fiscal quarter period, there shall be at least two consecutive fiscal quarters the Maximum Leverage Ratio applicable to which shall be the Base Leverage Ratio regardless of any other Material Acquisitions.
“ Moody’s ” means Moody’s Investors Service, Inc.
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“ Multiemployer Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“ Net Proceeds ” means, with respect to any event (a) the cash proceeds received in respect of such event, net of (b) all reasonable fees and out-of-pocket expenses paid by the Borrower and the Subsidiaries to third parties (other than Affiliates) in connection with such event.
“ New York Administrative Office ” means the Administrative Agent’s office located at 383 Madison Avenue, 24 th Fl., New York, NY 10179, or such other office in New York City as may be designated by the Administrative Agent by written notice to the Borrower and the Lenders.
“ New York Business Day ” means any day on which commercial banks are open for business and are not required or authorized by law to close in New York City.
“ Notes ” means the collective reference to any promissory note evidencing Loans.
“ Obligation Currency ” shall have the meaning set forth in Section 9.3.
“ OFAC ” shall have the meaning set forth in Section 3.15(c).
“ OFAC Listed Person ” shall have the meaning set forth in Section 3.15(c).
“ Optional Calculation Date ” has the meaning set forth in the definition of “Calculation Date”.
“ Other Connection Taxes ” with respect to any Credit Party, Taxes imposed as a result of a present or former connection between such Credit Party and the jurisdiction imposing such Taxes (other than a connection arising from such Credit Party having executed, delivered, enforced, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to, or enforced any Loan Document, or sold or assigned an interest in any Loan Document).
“ Other Taxes ” means any and all present or future stamp or documentary taxes or any other excise taxes, charges or similar levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document.
“ Overdraft Swingline Loans ” means Swingline Loans made by JPMorgan Chase Bank, N.A., pursuant to the second to last sentence of Section 2.4(b).
“ Owner Group ” means (a) Benckiser Family Members, (b) any Benckiser Controlled Trust, or (c) any Person of which more than 50% of the voting shares or voting (or otherwise controlling) equity interests in such Person are directly or indirectly owned or controlled by, or held for the benefit of, one or more of the Persons described in clauses (a) or (b) of this definition (each such person described in clauses (a),(b) and (c), a “Benckiser Permitted Holder”). A Benckiser Permitted Holder shall not lose such status merely because (x) the identity of the individuals comprising Benckiser Family Members (as determined in accordance with the definition thereof) and owning or for whose benefit such shares or equity interests are held and/or (y) any executor(s), administrator(s), guardian(s), trustee(s) or other Person(s) acting as a fiduciary with respect to such Benckiser Family Members or serving in any similar or corresponding capacity may change from time to time for any reason, including without limitation, death, retirement, resignation, removal, appointment, intra-family transfers or otherwise.
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“ Participant ” has the meaning set forth in Section 9.5(c).
“ Participant Register ” has the meaning set forth in Section 9.5(c).
“ Patent Licenses ” means all agreements providing for the grant by or to any Person of any right to manufacture, use or sell in any country any invention covered by a Patent.
“ Patents ” means all current and future letters patent of the United States or any other country, and all applications, divisions, continuations, continuations-in-part, reissues and extensions thereof.
“ PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
“ Permitted Encumbrances ” means:
(a) Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.4;
(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 90 days or are being contested in compliance with Section 5.4;
(c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute an Event of Default under clause (j) of Article VII;
(f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary; and
(g) Liens encumbering deposits in favor of depositing banks arising as a matter of law;
provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.
“ Permitted Investments ” means:
(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;
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(b) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;
(c) investments in certificates of deposit, banker’s acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any Lender, any domestic office of any commercial bank organized or licensed under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000 or, in the case of Foreign Subsidiaries, any local office of any commercial bank organized under the laws of the relevant local jurisdiction or any political subdivision thereof which has a combined capital and surplus and undivided profits of not less than $100,000,000; and
(d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above.
“ Permitted Receivables Facility ” means any program for the transfer by the Borrower or any of its Subsidiaries, without recourse (other than customary limited recourse) to the Borrower or any of its Subsidiaries (other than the Receivables Subsidiary), to any buyer, purchaser or lender of interests in accounts receivable (including any Subsidiary of the Borrower), so long as the aggregate outstanding principal amount of Indebtedness incurred pursuant to such program shall not exceed $400,000,000 at any one time.
“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“ Plan ” means any employee pension benefit plan (as defined in Section 3(2) of ERISA, other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower, any Subsidiary or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4062 or 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“ Pooling System ” means a notional netting or similar cash management program.
“ Post-Acquisition Leverage Ratio ” means 4.00 to 1.0.
“ Prime Rate ” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City; each change in Prime Rate shall be effective from and including the date such change is publicly announced as being effective.
“ Priority Debt ” means (a) all unsecured Indebtedness of any Subsidiary, other than (i) Indebtedness of any Subsidiary owed to the Borrower or a Subsidiary Guarantor and (ii) Indebtedness of a Subsidiary Guarantor, and (b) Indebtedness and other obligations of the Borrower or any Subsidiary secured by Liens described in Sections 6.3(j) and 6.3(k). Notwithstanding the foregoing, Priority Debt shall not include (1) Indebtedness of a Receivables Subsidiary pursuant to any Permitted Receivables Facility or (2) Indebtedness of any Person acquired by the Borrower or any Subsidiary which Indebtedness (w) was in existence at the time of such acquisition, (x) was not incurred in contemplation of such acquisition, (y) is in a principal amount not exceeding the principal amount outstanding at the time of such acquisition and (z) is repaid in full within 360 days after such acquisition.
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“ Prohibited Transaction ” has the meaning assigned to such term in Section 406 of ERISA and Section 4975(c) of the Code.
“ Property ” means any right or interest in or to property or assets of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Capital Stock.
“ Qualified Foreign Currency ” means Sterling, Swiss Franc, Canadian Dollar and Euro.
“ Qualified Foreign Currency Borrowing ” means any Borrowing comprised of Qualified Foreign Currency Loans.
“ Qualified Foreign Currency Loan ” means any Loan denominated in a Qualified Foreign Currency.
“ Receivables Subsidiary ” means the special purpose entity established as a “bankruptcy remote” Subsidiary of the Borrower for the purpose of acquiring accounts receivable under any Permitted Receivables Facility, which shall engage in no operations or activities other than those related to such Permitted Receivables Facility.
“ Refinancing Term Loans ” shall have the meaning set forth in Section 2.22.
“ Register ” has the meaning set forth in Section 9.5(b).
“ Reimbursement Obligation ” means the obligation of the Borrower to reimburse the relevant Issuing Bank pursuant to Section 2.5(e) for amounts drawn under Letters of Credit.
“ Related Parties ” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.
“ Reorganization ” means, with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.
“ Reportable Event ” means any “reportable event,” as defined in Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a Plan, other than those events as to which notice is waived pursuant to DOL Reg. § 4043.
“ Required Lenders ” means, at any time, Lenders having Term Loans outstanding, Revolving Exposures and unused Revolving Commitments representing more than 50% of the sum of the total aggregate Term Loans outstanding, Revolving Exposures and unused Revolving Commitments at such time.
“ Requirement of Law ” means, as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.
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“ Responsible Officer ”: the chief executive officer, president or chief financial officer of the Borrower, but in any event, with respect to financial matters, the chief financial officer of the Borrower.
“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other Property) with respect to any shares of any class of Capital Stock of the Borrower or any Subsidiary, or any payment (whether in cash, securities or other Property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such shares of Capital Stock of the Borrower or any Subsidiary or any option, warrant or other right to acquire any such shares of Capital Stock of the Borrower or any Subsidiary.
“ Revolving Availability Period ” means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Revolving Commitments.
“ Revolving Commitment ” means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.8, (b) increased from time to time pursuant to Section 2.21 and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.5. The initial amount of each Lender’s Revolving Commitment is set forth on Schedule 2.1, the applicable Incremental Amendment or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable. The initial aggregate amount of the Revolving Commitments is $1,250,000,000.
“ Revolving Commitment Increase ” has the meaning set forth in Section 2.21.
“ Revolving Exposure ” means, with respect to any Lender, at any time, the sum of (a) the aggregate outstanding principal amount of such Lender’s Revolving Loans at such time that are denominated in Dollars, plus (b) the Dollar Equivalent at such time of the aggregate outstanding principal amount of such Lender’s Revolving Loans at such time that are denominated in Qualified Foreign Currencies, plus (c) such Lender’s L/C Exposure at such time, plus (d) such Lender’s Swingline Exposure at such time.
“ Revolving Lender ” means a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving Exposure.
“ Revolving Loan ” means a Loan made pursuant to clause (b) of Section 2.1.
“ Revolving Percentage ” means, with respect to any Revolving Lender, the percentage of the total Revolving Commitments represented by such Lender’s Revolving Commitment. If the Revolving Commitments have terminated or expired, the Revolving Percentages shall be determined based upon the Revolving Commitments most recently in effect, giving effect to any assignments.
“ S&P ” means Standard & Poor’s Ratings Services.
“ Specified Debt ” means any Indebtedness for borrowed money of the Borrower or any of its Subsidiaries incurred or issued in the form of credit facilities, notes, bonds or similar instruments.
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“ Spot Exchange Rate ” means, on any day, with respect to any Qualified Foreign Currency, the spot rate appearing on the relevant page of the Reuters screen or any successor to or substitute for such screen, providing rate quotations comparable to those currently provided on such page of such screen, as determined by the Administrative Agent from time to time for purposes of providing quotations of rates at which such Qualified Foreign Currencies are offered on such day in London at approximately 11:00 A.M. (London time) for delivery two Business Days later. For purposes of determining the Spot Exchange Rate in connection with a Qualified Foreign Currency Borrowing, such spot exchange rate shall be determined as of the Calculation Date for such Borrowing with respect to transactions in the applicable Qualified Foreign Currency that will settle on the date of such Borrowing.
“ Statutory Reserve Rate ” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board or by any other Governmental Authority, domestic or foreign, with jurisdiction over the Administrative Agent or any Lender (including any branch, Affiliate or other funding office thereof making or holding a Loan) with respect to the Adjusted Eurocurrency Rate applicable to any Borrowing, for any category of liabilities which includes deposits by reference to which the Adjusted Eurocurrency Rate in respect of such Borrowing is determined. Such reserve percentages shall include those imposed pursuant to Regulation D of the Board. Eurocurrency Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
“ Subordinated Indebtedness ” means any Indebtedness that is expressly subordinated in right of payment to any of the obligations of any Loan Party under any Loan Document, pursuant to a written agreement.
“ subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, directly or indirectly, owned, controlled or held, or (b) that is, as of such date, otherwise directly or indirectly Controlled (within the meaning of clause (b) of the definition of “Control”) by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
“ Subsidiary ” means any subsidiary of the Borrower.
“ Subsidiary Guarantee ” means the Subsidiary Guarantee executed and delivered by the Subsidiary Guarantors, substantially in the form of Exhibit C.
“ Subsidiary Guarantor ” means each Subsidiary listed on Schedule 1.1 and each other Subsidiary that becomes a party to a Subsidiary Guarantee pursuant to Section 5.10.
“ Swingline Exposure ” means, at any time the sum of (a) the aggregate outstanding principal amount at such time of all Swingline Loans that are denominated in Dollars, plus (b) the Dollar Equivalent at such time of the aggregate outstanding principal amount of Swingline Loans at such time
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that are denominated in Qualified Foreign Currencies. The Swingline Exposure of any Revolving Lender at any time shall mean its Revolving Percentage of the aggregate Swingline Exposure at such time.
“ Swingline Lender ” means JPMorgan Chase Bank, N.A., in its capacity as a lender of Swingline Loans hereunder.
“ Swingline Loan ” means a Loan made pursuant to Section 2.4(a).
“ Syndication Agents ” means the entities listed as such on the cover page hereto.
“ TARGET Settlement Day ” means any day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer System (or, if such clearing system ceases to be operative, such other clearing system (if any) determined by the Administrative Agent to be a suitable replacement) is open for settlement of payment in Euros.
“ Taxes ” means any and all present or future taxes, levies, imposts, duties, deductions or withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“ Term Commitment ” means, with respect to each Lender, the commitment, if any, of such Lender to make a Term Loan hereunder on the Effective Date, expressed as an amount representing the maximum principal amount of the Term Loan to be made by such Lender hereunder. The amount of each Lender’s Term Commitment is set forth on Schedule 2.1. The initial aggregate amount of the Term Commitments is $1,250,000,000. In addition, the “Term Commitment” of a Lender means, as the context requires, any commitment of such Lender to make Incremental Term Loans or Refinancing Term Loans.
“ Term Loan ” means (a) a Loan made pursuant to clause (a) of Section 2.1, (b) an Incremental Term Loan or (c) a Refinancing Term Loan.
“ Term Loan Lender ” means a Lender with a Term Commitment or an outstanding Term Loan.
“ Term Loan Percentage ” means, as to any Term Loan Lender at any time, the percentage which such Lender’s Term Commitment then constitutes of the aggregate Term Commitments (or, at any time after the Effective Date, the percentage which the aggregate principal amount of such Lender’s Term Loans then outstanding constitutes of the aggregate principal amount of the Term Loans then outstanding).
“ Total Revolving Exposure ” means, at any time, the sum of the total Revolving Exposures.
“ Trademark Licenses ” means all agreements providing for the grant by or to any Person of any right to use any Trademark.
“ Trademarks ” means all current and future trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, service marks, logos and other source or business identifiers, and the goodwill associated therewith or symbolized thereby, and all registrations, applications, recordings and renewals relating thereto, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise.
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“ Transactions ” means the execution, delivery and performance by the Borrower of this Agreement, the borrowing of Loans, the use of the proceeds thereof, the issuance of Letters of Credit hereunder and the execution, delivery and performance of the other Loan Documents by each Loan Party party thereto.
“ Type ”, when used in respect of any Loan or Borrowing, means the rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined and the currency in which such Loan or the Loans comprising such Borrowing are denominated. For purposes hereof, “Rate” shall include the Adjusted Eurocurrency Rate and the Alternate Base Rate, and “currency” shall include Dollars and any Qualified Foreign Currency.
“ Undisclosed Administration ” means in relation to a Lender the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator under or based on the law in the country where such Lender is subject to home jurisdiction supervision if applicable law requires that such appointment is not to be publicly disclosed.
“ Wholly Owned Subsidiary ” means, as to any Person, any other Person all of the Capital Stock of which (other than directors’ qualifying shares required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries.
“ Withdrawal Liability ” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“ Withholding Agent ” means any Loan Party and the Administrative Agent.
SECTION 1.2 Classification of Loans and Borrowings . For purposes of this Agreement, Loans may be classified and referred to by Class ( e.g. , a “Revolving Loan”) or by Type ( e.g. , a “Eurocurrency Loan”) or by Class and Type ( e.g. , a “Eurocurrency Revolving Loan”). Borrowings also may be classified and referred to by Class ( e.g. , a “Revolving Borrowing”) or by Type ( e.g. , a “Eurocurrency Borrowing”) or by Class and Type ( e.g. , a “Eurocurrency Revolving Borrowing”).
SECTION 1.3 Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument, license or other document herein shall be construed as referring to such agreement, instrument, license or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (f) where applicable, any amount (including, without limitation, minimum borrowing, prepayment or repayment amounts) expressed in Dollars shall, when referring to any currency other than
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Dollars, be deemed to mean an amount of such currency having a Dollar equivalent approximately equal to such amount.
SECTION 1.4 Accounting Terms; GAAP . Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided , that all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value”, as defined therein and (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof; and provided, further, that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.
SECTION 1.5 Currency Conversion . (a) If more than one currency or currency unit are at the same time recognized by the central bank of any country as the lawful currency of that country, then (i) any reference in the Loan Documents to, and any obligations arising under the Loan Documents in, the currency of that country shall be translated into or paid in the currency or currency unit of that country designated by the Administrative Agent and (ii) any translation from one currency or currency unit to another shall be at the official rate of exchange recognized by the central bank for conversion of that currency or currency unit into the other, rounded up or down by the Administrative Agent as it deems appropriate.
(b) If a change in any currency of a country occurs, this Agreement shall be amended (and each party hereto agrees to enter into any supplemental agreement necessary to effect any such amendment) to the extent that the Administrative Agent specifies to be necessary to reflect the change in currency and to put the Lenders in the same position, so far as possible, that they would have been in if no change in currency had occurred.
ARTICLE II
The Credits
SECTION 2.1 Commitments . Subject to the terms and conditions set forth herein, each relevant Lender severally agrees (a) to make Term Loans in Dollars to the Borrower on the Effective Date in an aggregate principal amount not exceeding its Term Commitment and (b) to make Revolving Loans in Dollars or one or more Qualified Foreign Currencies (as specified in the Borrowing Requests with respect thereto) to the Borrower from time to time during the Revolving Availability Period in an aggregate principal amount that will not result in such Lender’s Revolving Exposure exceeding such Lender’s Revolving Commitment. Within the foregoing limits and subject to the terms and conditions set
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forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans. Amounts repaid in respect of Term Loans may not be reborrowed.
SECTION 2.2 Loans and Borrowings . (a) Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Term Loan Lenders or the relevant Revolving Lenders, as the case may be, ratably in accordance with their respective Commitments of the applicable Class. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.
(b) Subject to Section 2.14, (i) each Revolving Borrowing denominated in Dollars shall be comprised entirely of ABR Loans or Eurocurrency Loans as the Borrower may request in accordance herewith, (ii) each Swingline Loan denominated in Dollars shall be an ABR Loan and (iii) each Qualified Foreign Currency Borrowing shall be comprised entirely of Eurocurrency Loans. Each Lender at its option may make any Eurocurrency Loan or Qualified Foreign Currency Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurocurrency Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $10,000,000 (in the case of Term Eurocurrency Borrowings) or $3,000,000 (in the case of Revolving Eurocurrency Borrowings). At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $3,000,000; provided that an ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Commitments or that is required to finance the reimbursement of an L/C Disbursement as contemplated by Section 2.5(e). Each Swingline Loan shall be in an amount that is an integral multiple of $100,000 and not less than $500,000; provided that the Borrower may enter into alternative arrangements with the Swingline Lender acceptable to the Swingline Lender. Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of eighteen Revolving Eurocurrency Borrowings outstanding and four Term Eurocurrency Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.
SECTION 2.3 Requests for Borrowings . To request a Revolving Borrowing or Term Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurocurrency Borrowing, not later than 12:00 noon, New York City time (or if the request is delivered in London, 11:00 a.m. London time; provided that such request in London must be delivered by telecopy), three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time, one Business Day before the date of the proposed Borrowing; provided that any such notice of an ABR Revolving Borrowing to finance the reimbursement of an L/C Disbursement as contemplated by Section 2.5(e) may be given not later than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such telephonic (or telecopy if delivered in London) Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower. Each Borrowing Request shall specify the following information in compliance with Section 2.2:
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(i) the Borrower requesting such Borrowing (and be signed on behalf of the Borrower); |
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(ii) if such Borrowing is to be made on the Effective Date, whether the requested Borrowing is to be a Revolving Borrowing or Term Borrowing; |
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(iii) the amount of such Borrowing; |
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(iv) the date of such Borrowing, which shall be a Business Day; |
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(v) whether such Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; |
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(vi) in the case of a Eurocurrency Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; |
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(vii) the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.6; and |
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(viii) the currency of such Borrowing (which shall be Dollars in the case of Term Loans and otherwise shall be Dollars or a Qualified Foreign Currency). |
If no election as to the currency of a Revolving Borrowing is specified in any such notice, then the requested Borrowing shall be denominated in Dollars. If no election as to the Type of Borrowing is specified in any such notice, then the requested Borrowing shall be an ABR Borrowing if denominated in Dollars or a Eurocurrency Borrowing if denominated in a Qualified Foreign Currency. If no Interest Period with respect to any Eurocurrency Borrowing is specified in any such notice, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. The Administrative Agent shall promptly advise the applicable Lenders of any notice given pursuant to this Section 2.3 (and the contents thereof), and of each Lender’s portion of the requested Borrowing.
SECTION 2.4 Swingline Loans . (a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from time to time during the Revolving Availability Period, in Dollars or Qualified Foreign Currencies, in an aggregate principal amount at any time outstanding that will not result in (x) the Dollar Equivalent of the aggregate principal amount of outstanding Swingline Loans (including, in any event, the Blockage Amount) exceeding $80,000,000 or (y) the Total Revolving Exposure exceeding the total Revolving Commitments; provided that notwithstanding the foregoing, (i) after giving effect to any Swingline Loan, the Swingline Lender’s Swingline Exposure shall not exceed such Lender’s Revolving Commitment then in effect and (ii) the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the Administrative Agent and the Swingline Lender of such request by telephone (confirmed by telecopy), not later than 12:00 noon, New York City time or 11:00 a.m. London time, as applicable, on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the name of the Borrower, the requested date (which shall be a Business Day) and the amount and currency of the requested Swingline Loan. Not later than 2:00 p.m., New York City time or 2:00 p.m., London time, as applicable, on the borrowing date specified in the Borrowing Request, the Swingline Lender shall make available to the Administrative
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Agent an amount in immediately available funds equal to the amount of the Swingline Loan to be made by the Swingline Lender. The Administrative Agent shall make the proceeds of such Swingline Loan available to the Borrower by means of a credit to the general deposit account of the Borrower with the Administrative Agent or such other account as indicated by the Borrower in the Borrowing Request (or, in the case of a Swingline Loan made to finance the reimbursement of an L/C Disbursement as provided in Section 2.5(e), by remittance to the Issuing Bank) by 3:00 p.m., New York City time or 3:00 p.m., London time, as applicable, on the requested date of such Swingline Loan. In lieu of the foregoing, the Borrower may enter into such alternative arrangements as are acceptable to the Swingline Lender and the Administrative Agent. Notwithstanding the foregoing, and subject to the limitations set forth in Section 2.4(a), amounts advanced by JPMorgan Chase Bank, N.A. to cover overdrafts of the Borrower shall be deemed to be Swingline Loans. JPMorgan Chase Bank, N.A. agrees to notify the Administrative Agent of the aggregate outstanding principal amount of Overdraft Swingline Loans (i) on any Business Day on which the aggregate outstanding principal amount of Overdraft Swingline Loans exceeds an amount designated from time to time in writing to the Administrative Agent by the Borrower and JPMorgan Chase Bank, N.A. (the “ Blockage Amount ”) and (ii) at any other time upon request by the Administrative Agent.
(c) The Swingline Lender may by written notice given to the Administrative Agent not later than 10:00 a.m., New York City time, or 10:00 a.m., London time, as applicable, on any Business Day require the Revolving Lenders to acquire participations on such Business Day (or three Business Days after the date of such notice in the case of Qualified Foreign Currency Borrowings) in all or a portion of the outstanding Swingline Loans. Such notice shall specify the aggregate amount of Swingline Loans in which Revolving Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Revolving Lender, specifying in such notice such Lender’s Revolving Percentage of the relevant Swingline Loans. In the event that any such notice is given in respect of any Qualified Foreign Currency Swingline Loan, payments by the Revolving Lenders will be made in the corresponding Qualified Foreign Currency. Each Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, in Dollars or the applicable Qualified Foreign Currency, for the account of the Swingline Lender, such Lender’s Revolving Percentage of such Swingline Loan or Loans. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this clause is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Revolving Lender shall comply with its obligation under this clause by wire transfer of immediately available funds, in the same manner as provided in Section 2.6 with respect to Loans made by such Lender (and Section 2.6 shall apply, mutatis mutandis , to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Revolving Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this clause, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Revolving Lenders that shall have made their payments pursuant to this clause and to the Swingline Lender, as their interests may appear. The purchase of participations in a Swingline Loan pursuant to this clause shall not relieve the Borrower of any default in the payment thereof.
SECTION 2.5 Letters of Credit . (a) General . Subject to the terms and conditions set forth herein, the Borrower may request the issuance of Letters of Credit for the account of the Borrower
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or, subject to the Borrower’s reimbursement obligations pursuant to Section 2.5(e), any of its Subsidiaries, in a form reasonably acceptable to the Administrative Agent and the applicable Issuing Bank, at any time and from time to time during the Revolving Availability Period. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the applicable Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions . To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the applicable Issuing Bank) to the applicable Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice specifying the name of the Borrower and requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with clause (c) of this Section), the amount of such Letter of Credit, the currency in which such Letter of Credit is to be denominated (which shall be Dollars or a Qualified Foreign Currency), the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the relevant Issuing Bank, the Borrower also shall submit a letter of credit application on such Issuing Bank’s standard form in connection with any request for a Letter of Credit. Following receipt of such notice and prior to the issuance of the requested Letter of Credit, the Administrative Agent shall calculate the Dollar Equivalent of such Letter of Credit and shall notify the Borrower and the applicable Issuing Bank of the amount of the Total Revolving Exposure after giving effect to (i) the issuance of such Letter of Credit, (ii) the issuance or expiration of any other Letter of Credit that is to be issued or will expire prior to the requested date of issuance of such Letter of Credit and (iii) the borrowing or repayment of any Revolving Loans or Swingline Loans that (based upon notices delivered to the Administrative Agent by the Borrower) are to be borrowed or repaid prior to the requested date of issuance of such Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the L/C Exposure shall not exceed $50,000,000 and (ii) the Total Revolving Exposure shall not exceed the total Revolving Commitments.
(c) Expiration Date . Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension); provided that any Letter of Credit with a one-year tenor may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (ii) below) and (ii) the date that is five Business Days prior to the Maturity Date.
(d) Participations . By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the applicable Issuing Bank or the Lenders, the applicable Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Revolving Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Revolving Percentage of each L/C Disbursement made by such Issuing Bank and not reimbursed by the Borrower on the date due as provided in clause (e) of this Section, or of any
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reimbursement payment required to be refunded to the Borrower for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this clause in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement . If the applicable Issuing Bank shall make any L/C Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such L/C Disbursement by paying to the Administrative Agent an amount equal to such L/C Disbursement not later than 1:00 p.m., New York City time or London time, as applicable, on the date that such L/C Disbursement is made, if the Borrower shall have received notice of such L/C Disbursement prior to 10:00 a.m., New York City time or London time, as applicable, on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than 1:00 p.m., New York City time or London time, as applicable, on (i) the Business Day that the Borrower receives such notice, if such notice is received prior to 10:00 a.m., New York City time or London time, as applicable, on the day of receipt, or (ii) the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time on the day of receipt; provided that in the case of Dollar L/C Disbursements, the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.3 or 2.4 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Revolving Lender of the applicable L/C Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Revolving Percentage thereof. Promptly following receipt of such notice, each Revolving Lender shall pay to the Administrative Agent its Revolving Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.6 with respect to Loans made by such Lender (and Section 2.6 shall apply, mutatis mutandis , to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the applicable Issuing Bank the amounts so received by it from such Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this clause, the Administrative Agent shall distribute such payment to the applicable Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to this clause to reimburse such Issuing Bank, then to such Lenders and such Issuing Bank as their interests may appear. Any payment made by a Revolving Lender pursuant to this clause to reimburse an Issuing Bank for any L/C Disbursement (other than the funding of Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such L/C Disbursement.
(f) Obligations Absolute . The Borrower’s obligation to reimburse L/C Disbursements as provided in clause (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the applicable Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder. Neither the Administrative Agent, the Lenders nor any Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any
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payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the applicable Issuing Bank; provided that the foregoing shall not be construed to excuse such Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by such Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on part of an Issuing Bank, such Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, an Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.
(g) Disbursement Procedures . The applicable Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. Such Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether such Issuing Bank has made or will make an L/C Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse such Issuing Bank and the Revolving Lenders with respect to any such L/C Disbursement.
(h) Interim Interest . If an Issuing Bank shall make any L/C Disbursement, then, unless the Borrower shall reimburse such L/C Disbursement in full on the date such L/C Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such L/C Disbursement is made to but excluding the date that the Borrower reimburses such L/C Disbursement, (i) if such L/C Disbursement is denominated in Dollars, at the rate per annum then applicable to ABR Revolving Loans and (ii) if such L/C Disbursement is denominated in a Qualified Foreign Currency, at the rate per annum determined by the Administrative Agent to represent its cost of overnight or short-term funds in the relevant currency (which determination shall be conclusive absent manifest error) plus the Applicable Rate then applicable to Revolving Loans which are Eurocurrency Loans; provided that, if the Borrower fails to reimburse such L/C Disbursement when due pursuant to clause (e) of this Section, then Section 2.13(d) shall apply. Interest accrued pursuant to this clause shall be for the account of the applicable Issuing Bank, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to clause (e) of this Section to reimburse such Issuing Bank shall be for the account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank . An Issuing Bank may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of such Issuing Bank. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b). From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of such Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall
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require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.
(j) Cash Collateralization . If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated or the Revolving Commitments have been terminated, Revolving Lenders with L/C Exposure representing greater than 50% of the total L/C Exposure) demanding the deposit of cash collateral pursuant to this clause, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Revolving Lenders, an amount in cash equal to 103% of the L/C Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (g) or (h) of Article VII. Each such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the applicable Issuing Bank for L/C Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the L/C Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of, as applicable, Revolving Lenders with L/C Exposure representing greater than 50% of the total L/C Exposure), be applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived.
(k) On and as of the Effective Date the Existing Letters of Credit will constitute Letters of Credit under this Agreement and for the purposes hereof will be deemed to have been issued hereunder for the account of the Borrower on the Effective Date for all purposes under this Agreement and the other Loan Documents.
SECTION 2.6 Funding of Borrowings . (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders in federal funds (in the case of any Loan denominated in Dollars) or such other immediately available funds as may then be customary for the settlement of international transactions in the relevant currency not later than 11:00 a.m., New York City time, in the case of fundings to an account in New York City, or 11:00 a.m., local time, in the case of fundings to an account in another jurisdiction; provided that Swingline Loans shall be made as provided in Section 2.4. The Administrative Agent shall by 1:00 p.m. New York City time, in the case of fundings to an account in New York City, or 3:00 p.m. local time, in the case of fundings to an account in another jurisdiction, credit the amounts so received to an account designated by the Borrower in the applicable Borrowing Request, which account must be in the name of the Borrower and, as applicable, in London or in the financial center of the country of the currency of the Loan or, if a Borrowing shall not occur on such date because any condition precedent herein specified shall not have been met, return the amounts so received to the respective Lenders; provided that Revolving Loans made
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to finance the reimbursement of an L/C Disbursement as provided in Section 2.5(e) shall be remitted by the Administrative Agent to the relevant Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with clause (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount in the required currency. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon in such currency, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent to represent its cost of overnight or short-term funds in the relevant currency (which determination shall be conclusive absent manifest error) or (ii) in the case of the Borrower, the interest rate applicable to such Borrowing. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.
SECTION 2.7 Interest Elections . (a) Each Revolving Borrowing and Term Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurocurrency Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurocurrency Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. Notwithstanding the foregoing, the Borrower may not (i) elect to convert the currency in which any Loans are denominated, (ii) elect to convert Qualified Foreign Currency Loans from Eurocurrency Loans to ABR Loans, (iii) elect an Interest Period for Eurocurrency Loans that does not comply with Section 2.2(d), (iv) elect to convert any ABR Loans to Eurocurrency Loans that would result in the number of Eurocurrency Borrowings exceeding the maximum number of Eurocurrency Borrowings permitted under Section 2.2(c), (v) elect an Interest Period for Eurocurrency Loans unless the aggregate outstanding principal amount of Eurocurrency Loans (including any Eurocurrency Loans made to the Borrower in the same currency on the date that such Interest Period is to begin) to which such Interest Period will apply complies with the requirements as to minimum principal amount set forth in Section 2.2(c), or (vi) elect to convert or continue any Swingline Borrowings.
(b) To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone (confirmed by telecopy) by the time that a Borrowing Request would be required under Section 2.3 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.2 and clause (f) of this Section:
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(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be |
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allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing); |
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(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day; |
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(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; and |
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(iv) if the resulting Borrowing is a Eurocurrency Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”. |
If any such Interest Election Request requests a Eurocurrency Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.
(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.
(e) Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no Borrowing denominated in Dollars may be made as, or converted to or continued as, a Eurocurrency Borrowing, (ii) unless repaid, each outstanding Eurocurrency Borrowing denominated in Dollars shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto and (iii) no Borrowing denominated in a Qualified Foreign Currency having an Interest Period in excess of one month may be made or continued.
(f) In the event that the Borrower fails to submit an Interest Election Request in accordance with this Section in respect of an outstanding Eurocurrency Borrowing, then such Loan shall automatically continue, at the end of the applicable Interest Period, as a Eurocurrency Loan having an Interest Period of one month.
SECTION 2.8 Termination and Reduction of Commitments . (a) The Term Loan Commitments shall terminate at 5:00 p.m., New York City time, on the Effective Date and, unless previously terminated, the Revolving Commitments shall terminate on the Maturity Date.
(b) The Borrower may at any time terminate, or from time to time reduce, the Revolving Commitments; provided that (i) each reduction of the Revolving Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not terminate or reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.11, the Total Revolving Exposure would exceed the total Revolving Commitments.
(c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Revolving Commitments under clause (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of Revolving Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice
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may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Revolving Commitments shall be permanent. Each reduction of the Revolving Commitments shall be applied ratably among the Revolving Lenders in accordance with their respective Revolving Commitments.
SECTION 2.9 Repayment of Loans; Evidence of Debt . (a) The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Revolving Lender the then unpaid principal amount of each Revolving Loan of such Lender on the Maturity Date, (ii) to the Administrative Agent for the account of each Term Loan Lender the then unpaid principal amount of each Term Loan of such Lender as provided in Section 2.10, (iii) in the case of Dollar denominated Swingline Loans, to the Swingline Lender the then unpaid principal amount of each such Swingline Loan on the earlier of the Maturity Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least two Business Days after such Swingline Loan is made and (iv) in the case of Qualified Foreign Currency denominated Swingline Loans, to the relevant Swingline Lender the then unpaid principal amount of each such Swingline Loan on the earlier of the Maturity Date and the fifth Business Day after such Swingline Loan is made. Notwithstanding the foregoing, Overdraft Swingline Loans shall be due and payable on the next Business Day following the Business Day on which such Swingline Loans are made, unless their maturity is extended in the sole discretion of JPMorgan Chase Bank, N.A., but not beyond the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.
(d) The entries made in the accounts maintained pursuant to clause (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.
SECTION 2.10 Repayment of Term Loans . (a) The Term Loan of each Term Loan Lender shall mature in 12 consecutive quarterly installments, each of which shall be in an amount equal to such Lender’s Term Loan Percentage multiplied by the amount set forth below opposite such installment:
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Installment |
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Principal Amount |
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July 1, 2015 |
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$31,250,000 |
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October 1, 2015 |
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$31,250,000 |
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January 1, 2016 |
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$31,250,000 |
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April 1, 2016 |
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$31,250,000 |
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July 1, 2016 |
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$62,500,000 |
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October 1, 2016 |
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$62,500,000 |
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January 1, 2017 |
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$62,500,000 |
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April 1, 2017 |
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$62,500,000 |
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July 1, 2017 |
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$62,500,000 |
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October 1, 2017 |
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$62,500,000 |
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January 1, 2018 |
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$62,500,000 |
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March 31, 2018 |
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$687,500,000 |
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(b) Each repayment or prepayment of a Term Borrowing shall be applied to the remaining installments of the Term Loans included in the repaid Borrowing as determined by the Borrower.
SECTION 2.11 Prepayment of Loans . (a) The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to the requirements of this Section.
(b) If on any Determination Date, the Total Revolving Exposure exceeds 105% of the Revolving Commitments then in effect, the Borrower shall, without notice or demand, within three Business Days after such Determination Date, repay such of the outstanding Revolving Loans in an aggregate principal amount such that, after giving effect thereto, the Total Revolving Exposure does not exceed the Revolving Commitments.
(c) Prior to any optional or mandatory prepayment of Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such prepayment pursuant to clause (d) of this Section.
(d) The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurocurrency Borrowing, not later than 11:00 a.m., New York City time or 11:00 a.m., London time as applicable), three Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than 12:00 noon, New York City time, one Business Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 12:00 noon, New York City time or 11:00 a.m. London time, as applicable, on the date of prepayment. Each such notice shall be irrevocable and shall specify the repayment date, the principal amount of each Borrowing or portion thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment; provided that, if a notice of optional prepayment is given in connection with a conditional notice of termination of the Revolving Commitments as contemplated by Section 2.8, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.8. Promptly following receipt of any such notice (other than a notice relating solely to Swingline Loans), the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in
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Section 2.2, except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the repaid Borrowing. Each prepayment of Term Loans shall be applied to the installments thereof in direct order of maturity. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13 and any compensation pursuant to Section 2.16, if applicable.
SECTION 2.12 Fees . (a) The Borrower agrees to pay to the Administrative Agent for the account of each Lender (other than Defaulting Lenders) a facility fee, which shall accrue at the Applicable Rate on the average daily amount of the Revolving Commitment of such Lender (whether or not utilized) during the period from and including the Effective Date to but excluding the date on which the Revolving Commitments terminate. Accrued facility fees shall be payable in arrears on each Fee Payment Date and on the date on which the Revolving Commitments terminate, commencing on the first such date to occur after the date hereof. All facility fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(b) The Borrower agrees to pay (i) to the Administrative Agent for the account of each Revolving Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the Applicable Rate then in effect with respect to Eurocurrency Revolving Loans on the average daily amount of such Lender’s L/C Exposure (excluding any portion thereof attributable to unreimbursed L/C Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Revolving Commitment terminates and the date on which such Lender ceases to have any L/C Exposure, and (ii) to the relevant Issuing Bank a fronting fee, which shall accrue at a rate per annum equal to the Fronting Fee Rate on the average daily amount of the L/C Exposure (excluding any portion thereof attributable to unreimbursed L/C Disbursements), during the period from and including the Effective Date to but excluding the later of the date of termination of the Revolving Commitments and the date on which there ceases to be any L/C Exposure, as well as the relevant Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third Business Day following such last day, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Revolving Commitments terminate and any such fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand. Any other fees payable to the relevant Issuing Bank pursuant to this clause shall be payable within 10 days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of facility fees and participation fees, to the Lenders entitled thereto. Fees paid shall not be refundable under any circumstances.
SECTION 2.13 Interest . (a) The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Rate.
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(b) Dollar Borrowings of Swingline Loans shall bear interest at the Alternate Base Rate plus the Applicable Rate. Qualified Foreign Currency Borrowings of Swingline Loans shall have an Interest Period of at least one day and not more than one month and shall bear interest at rate at which each JPMorgan Chase Bank, N.A. offers to place deposits in the currency of such Swingline Loan for such Interest Period to first-class banks in the London interbank market at approximately 11:00 a.m., London time, on the first day of such Interest Period plus the Applicable Rate for Eurocurrency Revolving Loans. In the case of an Overdraft Swingline Loan, the interest rate shall be quoted by the Swingline Lender to the Borrower.
(c) The Loans comprising each Eurocurrency Borrowing shall bear interest at a rate per annum equal to in the case of a Eurocurrency Revolving Loan or Term Loan, the Adjusted Eurocurrency Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.
(d) Notwithstanding the foregoing, (i) if all or a portion of the principal amount of any Loan or Reimbursement Obligation shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement Obligations (whether or not overdue) shall bear interest at a rate per annum which is equal to the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section 2.13 or 2.5(h) as the case may be, in each case plus 2%, and (ii) if all or a portion of any interest payable on any Loan or Reimbursement Obligation or any facility fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate applicable to ABR Loans plus 2% or, in the case of amounts denominated in a Qualified Foreign Currency at the rate per annum determined by the Administrative Agent to represent its cost of overnight or short-term funds in the relevant currency (which determination shall be conclusive absent manifest error) plus the Applicable Rate then in effect with respect to Eurocurrency Loans plus 2%, in each case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such amount is paid in full (as well after as before judgment).
(e) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and, in the case of Revolving Loans, upon termination of the Revolving Commitments; provided that (i) interest accrued pursuant to clause (d) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Revolving Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurocurrency Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.
(f) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on Prime Rate, and interest in respect of Sterling Loans, shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or Adjusted Eurocurrency Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.14 Alternate Rate of Interest . If prior to the commencement of any Interest Period for a Eurocurrency Borrowing:
(a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted Eurocurrency Rate for such Interest Period;
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(b) the Administrative Agent is advised by the Required Lenders that the Adjusted Eurocurrency Rate or the Eurocurrency Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period; or
(c) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that deposits in the principal amounts of the Loans comprising such Borrowing and in the currency in which such Loans are to be denominated are not generally available in the relevant market,
then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, any request by the Borrower for a Eurocurrency Borrowing of the affected Type or in the affected currency, or a conversion to or continuation of a Eurocurrency Borrowing of the affected Type or in the affected currency, pursuant to Section 2.3 or 2.7, shall be deemed rescinded; provided that if the circumstances giving rise to such notice affect only one Type of Borrowings, then the other Type of Borrowings shall be permitted.
SECTION 2.15 Increased Costs . (a) If any Change in Law (other than changes in the rate of net income, franchise or similar taxes) shall:
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(i) subject any Credit Party to any Taxes (other than (A) Indemnified Taxes imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (B) Other Connection Taxes on gross or net income, profits or revenue (including value-added or similar Taxes)) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; |
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(ii) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge, liquidity or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted Eurocurrency Rate) or the Issuing Bank; or |
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(iii) impose on any Lender or Issuing Bank or the London interbank market any other condition, cost or expense affecting this Agreement or Eurocurrency Loans made by such Lender or any Letter of Credit or participation therein; |
and the result of any of the foregoing shall be to increase the cost to such Lender or such other Credit Party of making, continuing, converting or maintaining any Eurocurrency Loan (or in the case of (i), any Loan) (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or Issuing Bank hereunder (whether of principal, interest or otherwise), then each relevant Borrower will pay to such Lender or Issuing Bank or such other Credit Party, as the case may be, such additional amount or amounts as will compensate such Lender or Issuing Bank or such other Credit Party, as the case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or Issuing Bank determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or Issuing Bank’s capital or on the capital of such Lender’s or Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit
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held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a level below that which such Lender or Issuing Bank or such Lender’s or Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or Issuing Bank’s policies and the policies of such Lender’s or Issuing Bank’s holding company with respect to capital adequacy and liquidity), then from time to time the Borrower will pay to such Lender or Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or Issuing Bank or such Lender’s or Issuing Bank’s holding company for any such reduction suffered.
(c) A certificate of a Lender or Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or Issuing Bank or its holding company, as the case may be, as specified in clause (a) or (b) of this Section and the basis of the calculation thereof shall be delivered to the Borrower, and such Lender’s or Issuing Bank’s calculation of such amount or amounts shall be conclusive absent manifest error. The Borrower shall pay such Lender or Issuing Bank, as the case may be, the amount shown as due on any such certificate within 15 days after receipt thereof.
(d) Failure or delay on part of any Lender or Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender or Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.
SECTION 2.16 Break Funding Payments . In the event of (a) the payment of any principal of any Eurocurrency Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.11(d) and is revoked in accordance therewith), or (d) the assignment of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. Such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the applicable rate of interest for such Loans provided for herein (excluding, however, the Applicable Rate included therein, if any), for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for deposits in the relevant currency of a comparable amount and period from other banks in the relevant market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.17 Taxes
(a) Any and all payments by or on account of any obligation of a Loan Party hereunder or under any other Loan Document shall be made free and clear of and without deduction for any
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Indemnified Taxes or Other Taxes; provided that, if any Withholding Agent determines that it is so required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Withholding Agent shall make such deductions and (iii) such Withholding Agent shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Loan Parties shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) (i) the Loan Parties shall indemnify the Administrative Agent, each Lender and each Issuing Bank, within 15 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes actually paid by the Administrative Agent, such Lender or Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of any Loan Party hereunder or under any other Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or Issuing Bank, shall be conclusive absent manifest error.
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(ii) Each Lender shall severally indemnify the Administrative Agent for any Taxes (but, in the case of any Indemnified Taxes, only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so) attributable to such Lender that are paid or payable by the Administrative Agent in connection with any Loan Document and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The indemnity under this Section 2.17(c)(ii) shall be paid within 10 days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount of Taxes so paid or payable by the Administrative Agent. Such certificate shall be conclusive of the amount so paid or payable absent manifest error. |
(d) As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 2.17, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e) Status of Lenders. (i) Any Lender that is entitled to an exemption from, or reduction of any applicable withholding Tax with respect to any payments under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without, or at a reduced rate of, withholding. In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to any withholding (including backup withholding) or information reporting requirements. Notwithstanding anything to the contrary in the
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preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Sections 2.17(e)(ii)(A) through (E) and Section 2.17(e)(iii) below) shall not be required if in the Lender’s judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense (or, in the case of a Change in Law, any incremental material unreimbursed cost or expense) or would materially prejudice the legal or commercial position of such Lender. Upon the reasonable request of the Borrower or the Administrative Agent, any Lender shall update any form or certification previously delivered pursuant to this Section 2.17(e). If any form or certification previously delivered pursuant to this Section expires or becomes obsolete or inaccurate in any respect with respect to a Lender, such Lender shall promptly (and in any event within 10 days after such expiration, obsolescence or inaccuracy) notify the Borrower and the Administrative Agent in writing of such expiration, obsolescence or inaccuracy and update the form or certification if it is legally eligible to do so.
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(ii) Without limiting the generality of the foregoing, if the Borrower is a United States person as defined in Section 7701(a)(30) of the Code (a “U.S. Person”), any Lender with respect to the Borrower shall, if it is legally eligible to do so, deliver to the Borrower and the Administrative Agent (in such number of copies reasonably requested by the Borrower and the Administrative Agent) on or prior to the date on which such Lender becomes a party hereto, duly completed and executed copies of whichever of the following is applicable: |
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(A) in the case of a Lender that is a U.S. Person, IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax; |
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(B) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (1) with respect to payments of interest under this Agreement, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “interest” article of such tax treaty and (2) with respect to any other applicable payments under this Agreement, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty; |
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(C) in the case of a Foreign Lender for whom payments under this Agreement constitute income that is effectively connected with such Lender’s conduct of a trade or business in the United States, IRS Form W-8ECI; |
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(D) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code both (1) IRS Form W-8BEN and (2) a certificate substantially in the form of Exhibit E (a “U.S. Tax Certificate”) to the effect that such Lender is not (a) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (b) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, (c) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code or (d) conducting a trade or business in the United States with which the relevant interest payments are effectively connected; |
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(E) in the case of a Foreign Lender that is not the beneficial owner of payments made under this Agreement (including a partnership or a Lender that sells participations pursuant to Section 9.5(c)(i)) (1) an IRS Form W-8IMY on behalf of itself and (2) the relevant forms prescribed in clauses (A), (B), (C), (D) and (F) of this paragraph (e)(ii) that would be required of each such beneficial owner or partner of such partnership if such beneficial owner or partner were a Lender; provided, however, that if the Lender is a partnership and one or more of its partners |
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are claiming the exemption for portfolio interest under Section 881(c) of the Code, such Lender may provide a U.S. Tax Certificate on behalf of such partners; or |
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(F) any other form prescribed by law as a basis for claiming exemption from, or a reduction of, U.S. Federal withholding Tax together with such supplementary documentation necessary to enable the Borrower or the Administrative Agent to determine the amount of Tax (if any) required by law to be withheld. |
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(iii) If a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Withholding Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Withholding Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Withholding Agent as may be necessary for the Withholding Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.17(e)(iii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement. |
(f) If a Lender or Issuing Bank determines in its sole discretion exercised in good faith, that it has received a refund in respect of any Indemnified Taxes or Other Taxes as to which it has been indemnified by the Borrower pursuant to this Section, or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall promptly notify the Borrower of such refund and shall within 30 days from the date of receipt of such refund pay over the amount of such refund (including any interest paid or credited by the relevant Governmental Authority with respect to such refund) to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of such Lender or Issuing Bank and without interest; provided , however , that the Borrower, upon the request of such Lender or Issuing Bank, agrees to repay the amount paid over to the Borrower (plus penalties, interest or other charges due to the appropriate authorities in connection therewith) to such Lender or Issuing Bank in the event such Lender or Issuing Bank, as the case may be, is required to repay such refund to such relevant authority. This Section 2.17(f) shall not be construed to require any Lender or Issuing Bank to make available its Tax returns (or any other information relating to its Taxes which it deems confidential) to the Borrower or any other Person.
(g) For purposes of this Section 2.17, the term “applicable law” includes FATCA.
SECTION 2.18 Payments Generally; Pro Rata Treatment; Sharing of Set-offs . (a) The Borrower shall make each payment required to be made by it hereunder or under any other Loan Document (whether of fees or reimbursement of L/C Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 1:00 p.m., local time, at place of payment, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to such account of the Administrative Agent as the Administrative Agent shall specify by notice to the Borrower and, unless and until otherwise specified, all such payments shall be made to the Administrative Agent at its Administrative Office, except that payments pursuant to Sections 2.15, 2.16, 2.17, 9.4 and 9.5 shall be made directly to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons specified therein. Except as otherwise specified in this Agreement, each
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such payment (other than principal of and interest on Qualified Foreign Currency Loans and L/C Disbursements denominated in a Qualified Foreign Currency, which shall be made in the applicable Qualified Foreign Currency) shall be made in Dollars. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment under any Loan Document shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.
(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed L/C Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed L/C Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed L/C Disbursements then due to such parties.
(c) If any Lender shall, pursuant to a court order or by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Loans, Term Loans or participations in L/C Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Loans, Term Loans, participations in L/C Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Revolving Loans, Term Loans, participations in L/C Disbursements and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans, Term Loans, participations in L/C Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, unless the Lender from which such payment is recovered is required to pay interest thereon, in which case each Lender returning funds to such Lender shall pay its pro rata share of such interest, and (ii) the provisions of this clause shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in L/C Disbursements to any Assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this clause shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or any Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the relevant Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment
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to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.4(c), 2.5(d) or (e), 2.6(a), 2.18(d) or 9.4(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.19 Mitigation Obligations; Replacement of Lenders . (a) If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender becomes a Defaulting Lender, the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.5 or pursuant to other procedure approved by the Borrower and the Administrative Agent, which may include deemed assignment), all its interests, rights and obligations under this Agreement to an Assignee that shall assume such obligations (which Assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld and (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in L/C Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the Assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts). A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
SECTION 2.20 Defaulting Lenders . Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
(a) fees shall cease to accrue on the Revolving Commitment of such Defaulting Lender pursuant to Section 2.12(a);
(b) the Revolving Commitment and Revolving Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 9.2); provided, that this clause (b) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender affected thereby;
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(c) if any Swingline Exposure or L/C Exposure exists at the time such Lender becomes a Defaulting Lender then:
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(i) (i) all or any part of the Swingline Exposure and L/C Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Revolving Percentages but only to the extent the sum of each non-Defaulting Lender’s Revolving Exposure plus such Defaulting Lender’s Swingline Exposure and L/C Exposure does not exceed such non-Defaulting Lender’s Revolving Commitment; |
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(ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize for the benefit of the Issuing Lender only the Borrower’s obligations corresponding to such Defaulting Lender’s L/C Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.5(j) for so long as such L/C Exposure is outstanding; |
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(iii) if the Borrower cash collateralizes any portion of such Defaulting Lender’s L/C Exposure pursuant to clause (ii) above, the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b)(i) with respect to such Defaulting Lender’s L/C Exposure during the period such Defaulting Lender’s L/C Exposure is cash collateralized; |
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(iv) if the L/C Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Section 2.12(b)(i) shall be adjusted in accordance with such non-Defaulting Lenders’ Revolving Percentages; and |
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(v) if all or any portion of such Defaulting Lender’s L/C Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Lender or any other Lender hereunder, all fees payable under Section 2.12(b)(i) with respect to such Defaulting Lender’s L/C Exposure shall be payable to the Issuing Lender until and to the extent that such L/C Exposure is reallocated and/or cash collateralized; and |
(b) so long as such Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Lender shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure and the Defaulting Lender’s then outstanding L/C Exposure will be 100% covered by the Revolving Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.20(c), and participating interests in any newly made Swingline Loan or any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.20(c)(i) (and such Defaulting Lender shall not participate therein).
If (i) a Bankruptcy Event with respect to a Lender Parent of any Lender shall occur following the date hereof and for so long as such event shall continue or (ii) the Swingline Lender or the Issuing Lender has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Lender shall not be required to issue, amend or increase any Letter of Credit, unless the Swingline Lender or the Issuing Lender, as the case may be, shall have entered into arrangements with the Borrower or such Lender, satisfactory to the Swingline Lender or the Issuing Lender, as the case may be, to defease any risk to it in respect of such Lender hereunder.
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In the event that the Administrative Agent, the Borrower, the Swingline Lender and the Issuing Lender each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and L/C Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Revolving Percentage.
SECTION 2.21 Incremental Loans . At any time or from time to time after the Effective Date (on one or more occasions), by notice to the Administrative Agent (whereupon the Administrative Agent shall promptly deliver a copy to each of the Lenders), without having to seek consent from the Lenders, the Borrower may request (a) one or more additional tranches of term loans or additional Term Loans under an existing tranche (the “ Incremental Term Loans ”) and (b) one or more increases in the amount of the Revolving Commitments (each such increase, a “ Revolving Commitment Increase ” and, together with any Incremental Term Loans, referred to herein as a “ Credit Increase ”) in an aggregate principal amount not to exceed $750,000,000; provided that both at the time of any such request and upon the effectiveness of any Incremental Amendment referred to below, no Default or Event of Default shall exist and at the time that any such Incremental Term Loan is made (and immediately after giving effect thereto) no Default or Event of Default shall exist. The Incremental Term Loans (A) shall rank pari passu in right of payment and of security with the other Loans, (B) shall not mature or have any installments prior to the Maturity Date, (C) will accrue interest at rates determined by the Borrower and the lenders providing such Incremental Term Loans, which rates may be higher or lower than the rates applicable to the Term Loans, and (D) except with respect to clauses (B) and (C) above, shall be subject to terms and conditions substantially the same as the Term Loans. Each notice from the Borrower pursuant to this Section shall set forth the requested amount and proposed terms of the relevant Credit Increases and demonstrate compliance with the conditions set forth in the proviso to the first sentence of this Section. Incremental Term Loans may be made, and Revolving Commitment Increases may be provided, by any existing Lender or by any other bank or other financial institution (any such other bank or other financial institution being called an “ Additional Lender ”); provided that the Administrative Agent shall have consented (such consent not to be unreasonably withheld or delayed) to such Lenders or Additional Lenders making such Incremental Term Loans or providing such Revolving Commitment Increases, if such consent would be required under Section 9.5 for an assignment of Term Loans or Revolving Commitments, as applicable, to such Lender or Additional Lender. Commitments in respect of Credit Increases shall become Commitments (or in the case of a Revolving Commitment Increase to be provided by an existing Revolving Lender, an increase in such Lender’s applicable Revolving Commitment) under this Agreement pursuant to an amendment (an “ Incremental Amendment ”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, each Lender agreeing to provide such Commitment, if any, each Additional Lender, if any, and the Administrative Agent. An Incremental Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions and intent of this Section and the application of the proceeds thereof. No Lender shall be obligated to provide any Credit Increases, unless it so agrees. Upon each increase in the Revolving Commitments pursuant to this Section, the participations held by the Revolving Lenders in Letters of Credit or L/C Commitment immediately prior to such increase will be reallocated so as to be held by the Revolving Lenders ratably in accordance with their respective Revolving Percentages after giving effect to such Revolving Commitment Increase. If, on the date of a Revolving Commitment Increase, there are any Revolving Loans outstanding under the Revolving Commitments being increased, the Borrower shall prepay such Revolving Loans in accordance with this Agreement on the date of effectiveness of such Revolving Commitment Increase (but the Borrower may finance such prepayment with a concurrent borrowing of Revolving Loans from the Revolving Lenders after giving effect to such Revolving Commitment Increase). The Borrower may use
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the proceeds of each Credit Increase for any purpose not prohibited by this Agreement unless otherwise agreed in connection with such Credit Increase.
SECTION 2.22 Refinancing Term Loans . At any time or from time to time after the Effective Date (on one or more occasions), with the consent of the Administrative Agent (which consent shall not be unreasonably withheld or delayed), the Borrower may request one or more additional tranches of term loans (the “ Refinancing Term Loans ”) be made available under this Agreement to refinance, in whole or in part, outstanding Term Loans; provided that both at the time of any such request and upon the effectiveness of any Refinancing Amendment referred to below, no Default or Event of Default shall exist and at the time that any such Refinancing Term Loan is made (and immediately after giving effect thereto) no Default or Event of Default shall exist. The Refinancing Term Loans (A) shall rank pari passu in right of payment and of security with the other Loans, (B) shall not mature or have any installments prior to the Maturity Date unless all Term Loans are being refinanced by such Refinancing Term Loans, (C) will accrue interest at rates determined by the Borrower and the lenders providing such Refinancing Term Loans, which rates may be higher or lower than the rates applicable to the Term Loans and shall be subject to fees payable to the lenders providing such Refinancing Term Loans and an arrangement fee to the Administrative Agent (or its designee), all as agreed in connection with the funding of such Refinancing Term Loans, (D) if Revolving Commitments are outstanding at the time such Refinancing Term Loans are made, then such Refinancing Term Loans shall not mature prior to the Maturity Date nor have a percentage of the initial principal amount thereof amortize in any quarter that is greater than the percentage amortization made in such quarter on the Term Loans being refinanced, (E) shall not have a principal amount in excess of the principal amount of the Term Loans being refinanced plus unpaid and accrued interest thereon and for fees and expenses relating thereto and (F) except with respect to clauses (B), (C) and (D) above, shall be subject to terms and conditions substantially the same as the Term Loans. Each notice from the Borrower pursuant to this Section shall set forth the requested amount and proposed terms of the relevant Refinancing Term Loans and demonstrate compliance with the conditions set forth in the proviso to the first sentence of this Section. Refinancing Term Loans may be made by any existing Lender or by any Additional Lender; provided that the Administrative Agent shall have consented (such consent not to be unreasonably withheld or delayed) to such Lender’s or Additional Lender’s making such Refinancing Term Loans, if such consent would be required under Section 9.5 for an assignment of Term Loans to such Lender or Additional Lender. Commitments in respect of Refinancing Term Loans shall become Commitments under this Agreement pursuant to an amendment (a “ Refinancing Amendment ”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, each Lender agreeing to provide such Commitment, if any, each Additional Lender, if any, and the Administrative Agent. A Refinancing Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions and intent of this Section and the application of the proceeds thereof. No Lender shall be obligated to provide any Refinancing Term Loans, unless it so agrees. The Borrower shall apply the proceeds of Refinancing Term Loans to the repayment or prepayment of the Term Loans on the date of the incurrence of such Refinancing Term Loans in accordance with Section 2.11. This Section 2.22 shall supersede any provisions in Section 2.18 or Section 9.2 to the contrary.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.1 Organization; Powers . Each Loan Party is duly organized, validly existing and, where applicable, in good standing under the laws of the jurisdiction of its organization, has
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all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.
SECTION 3.2 Authorization; Enforceability . The Transactions to be entered into by each Loan Party are within such Loan Party’s corporate powers and have been duly authorized by all necessary corporate and, if required, stockholder action. This Agreement has been duly executed and delivered by the Borrower and constitutes, and each other Loan Document to which any Loan Party is to be a party, when executed and delivered by such Loan Party, will constitute, a legal, valid and binding obligation of the Borrower or such Loan Party (as the case may be), enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.3 Governmental Approvals; No Conflicts . The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect, (b) will not violate the charter, by-laws or other organizational documents of the Borrower or any of its Subsidiaries, (c) will not violate any applicable law or regulation or any order of any Governmental Authority, except, in each case, to the extent such breach, conflict or contravention would not reasonably be expected to result in a Material Adverse Effect, (d) will not violate or result in a default under any material indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries, and (e) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.
SECTION 3.4 Financial Condition; No Material Adverse Effect . (a) The Borrower has heretofore furnished to the Lenders its consolidated balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the fiscal year ended June 30, 2012, audited and reported on by Deloitte & Touche, independent public accountants and (ii) as of and for the second fiscal quarter of the fiscal year ending June 30, 2013, certified by a Financial Officer. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of quarterly financial statements.
(b) Except as disclosed in the financial statements referred to above or the notes thereto or in the Information Memorandum and except for the Disclosed Matters, after giving effect to the Transactions, none of the Borrower or its Subsidiaries has, as of the Effective Date, any unusual material contingent liabilities or unrealized losses.
(c) Since June 30, 2012, there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect.
SECTION 3.5 Properties . (a) Each of the Borrower and its Subsidiaries has good title to, or valid leasehold interests in, all its real and personal Property, except as could not reasonably be expected to have a Material Adverse Effect.
(b) Each of the Borrower and its Subsidiaries owns, or is licensed to use, all Intellectual Property material to its business, and the use thereof by the Borrower and its Subsidiaries
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does not infringe upon the rights of any other Person, except for such failure to own or be licensed to use or for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.6 Litigation and Environmental Matters . (a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries (i) which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve any of the Loan Documents or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.
SECTION 3.7 Compliance with Laws and Agreements . Each of the Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its Property and all indentures, agreements and other instruments binding upon it or its Property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.8 Investment Company Status . Neither the Borrower nor any other Loan Party is required to be registered as an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940. No Loan Party is subject to regulation under any Requirement of Law (other than Regulation X of the Board) which limits its ability to incur any Indebtedness under this Agreement or the other Loan Documents.
SECTION 3.9 Taxes . Each of the Borrower and its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10 ERISA . Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect: (i) no ERISA Event has occurred or is reasonably expected to occur; and (ii) all amounts required by applicable law with respect to, or by the terms of, any retiree welfare benefit arrangement maintained by the Borrower or any Subsidiary or to which the Borrower or any ERISA Affiliate has an obligation to contribute have been accrued in accordance with Statement of Financial Accounting Standards Board (FASB) Accounting Standard Codification No. 965 (Health and Welfare Benefit Plans). The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes FASB Accounting Standards Codification No. 715 or No. 960 (Compensation-Retirement Benefits)) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $5,000,000 the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Accounting Standards Codification No. 715 or No. 960 (Compensation-Retirement Benefits)) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $5,000,000 the fair market value of the assets of all such
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underfunded Plans. Neither the Borrower nor any Subsidiary is an entity deemed to hold “plan assets” within the meaning of 29 C.F.R. §2510.3-101 of any employee benefit plan (as defined in Section 3(3) of ERISA) which is subject to Title I of ERISA or any plan (within the meaning of Section 4975 of the Code.
SECTION 3.11 Disclosure . Neither the Information Memorandum nor any of the other reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with this Agreement or any other Loan Document or delivered hereunder or thereunder when delivered (or, in the case of the Information Memorandum, as of the Effective Date ), when taken as a whole, contained any material misstatement of fact or omitted to state any material fact necessary to make the statements therein, taken as a whole, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be by the Borrower reasonable at the time such projections were prepared.
SECTION 3.12 Subsidiaries . Schedule 3.12 sets forth as of the Effective Date the name of each Material Subsidiary and any other Subsidiaries at least 90% of the Capital Stock of which is directly or indirectly owned by the Borrower.
SECTION 3.13 Solvency . Immediately after the consummation of the Transactions to occur on the Effective Date and immediately following the making of each Loan made on the Effective Date and after giving effect to the application of the proceeds of such Loans, (a) the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (b) present fair saleable value of the Property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (d) each Loan Party will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted following the Effective Date.
SECTION 3.14 Senior Indebtedness . The obligations of the Borrower under the Loan Documents constitute “Senior Indebtedness” under and as defined in the documents evidencing the Subordinated Indebtedness or Affiliate Subordinated Indebtedness.
SECTION 3.15 Use of Proceeds; Margin Regulations; OFAC . (a) The proceeds of the Term Loans (other than Incremental Term Loans) will be used to refinance Indebtedness under the Existing Credit Agreement and for other general corporate purposes of the Borrower and its Subsidiaries. The proceeds of any Incremental Term Loans will be used for general corporate purposes of the Borrower and its Subsidiaries. The proceeds of any Refinancing Term Loans will be used to refinance Term Loans outstanding at the time of the incurrence of such Refinancing Term Loans. The proceeds of the Revolving Loans will be used to provide working capital for the Borrower and its Subsidiaries and for other general corporate purposes of the Borrower and its Subsidiaries. The Letters of Credit issued hereunder will be used to support payment obligations of the Borrower and its Subsidiaries.
(b) Neither the Borrower nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying “margin stock” (as defined in Regulation U of the Board). No part of the proceeds of any Loan will be used directly or indirectly for any purpose which entails a violation of, or which is inconsistent with, Regulation U or X of the Board.
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(c) Neither the Borrower nor any Subsidiary is (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, U.S. Department of Treasury (“ OFAC ”) (an “ OFAC Listed Person ”) or (ii) a department, agency or instrumentality of, or is otherwise controlled by or acting on behalf of, or engages in any dealings or transactions with, directly or indirectly, (x) any OFAC Listed Person or (y) the government of a country subject to U.S. economic sanctions administered by OFAC, currently Iran, Sudan, Cuba, Burma, Syria and North Korea (each OFAC Listed Person and each other entity described in clause (ii), a “ Prohibited Person ”). No part of the proceeds of any Loans constitutes or will constitute funds obtained on behalf of any Prohibited Person or will otherwise be used or made available, directly or indirectly, in connection with any investment in, or any transactions or dealings with, any Prohibited Person where such investments, transactions or dealings could reasonably be expected to cause the making, holding or receipt of any payment or exercise of any rights in respect of any Loans by any Lender to be in violation of any OFAC administered sanctions program applicable to such Lender, or for the purpose of financing the activities of, transactions with or acquiring an interest in any OFAC Listed Person, except to the extent licensed or otherwise approved by OFAC.
ARTICLE IV
Conditions
SECTION 4.1 Effective Date . The obligations of the Lenders to make Loans and of any Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.2):
(a) Credit Agreement; Subsidiary Guarantee . The Administrative Agent (or its counsel) shall have received from each party hereto or thereto either (i) a counterpart of this Agreement and the Subsidiary Guarantee signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include email or telecopy transmission of a signed signature page of this Agreement or the Subsidiary Guarantee, as the case may be) that such party has signed a counterpart of this Agreement or the Subsidiary Guarantee, as the case may be.
(b) Existing Credit Agreement; Certain Liens . The commitments for extensions of credit under the Existing Credit Agreement and related documentation, and all Liens created in connection therewith, shall have been terminated, and all amounts then owing thereunder shall have been paid in full.
(c) Legal Opinions . The Administrative Agent shall have received a favorable written legal opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of each of (i) Jules P. Kaufman, Esq., Senior Vice President, General Counsel and Secretary of the Borrower, substantially in the form of Exhibit B-1 and (ii) Gibson, Dunn & Crutcher LLP, special counsel for the Borrower, substantially in the form of Exhibit B-2. Each Loan Party hereby requests such counsel to deliver such legal opinions.
(d) Other Documents . The Administrative Agent shall have received such documents and certificates as the Administrative Agent may reasonably request relating to the organization, existence and good standing of each Loan Party, the authorization of the Transactions and any other legal matters relating to the Loan Parties, the Loan Documents or the Transactions, all in form and substance satisfactory to the Administrative Agent.
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(e) No Default; Representations . The Administrative Agent shall have received a certificate, dated the Effective Date and signed by a President, a Vice President or a Financial Officer of the Borrower, confirming compliance with the conditions set forth in clauses (a) and (b) of Section 4.2.
(f) Fees . The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced at least one Business Day prior to the Effective Date, reimbursement or payment of all reasonable out-of-pocket expenses required to be reimbursed or paid by any Loan Party hereunder or under any other Loan Document.
(g) Financials Statement; Projections . The Lenders shall have received (i) audited consolidated balance sheet and statements of income, stockholders equity and cash flows of the Borrower as of and for the fiscal year ended June 30, 2012, (ii) unaudited interim consolidated financial statements of the Borrower for each fiscal quarter ended after the date of the latest applicable financial statements delivered pursuant to clause (i) of this paragraph as to which such financial statements are available and (iii) satisfactory (A) annual projections for the fiscal year ending June 30, 2013, (B) annual projections for the fiscal year ending June 30, 2014, (C) annual projections for the fiscal year ending June 30, 2015 and (D) annual projections for the fiscal year ending June 30, 2016.
The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. On the Effective Date, the commitments under the Existing Credit Agreement shall terminate, without further action by any party thereto. The Lenders which are parties to the Existing Credit Agreement, comprising the “Required Lenders” as defined therein, hereby waive any requirement of notice of termination pursuant to the Existing Credit Agreement and of prepayment of loans to the extent necessary to give effect to the immediately preceding sentence and Section 4.1(b); provided that, in the case of prepayment of any Eurocurrency Borrowing (as defined therein), the Administrative Agent (as defined therein) must receive at least one Business Day advance notice of any such prepayment.
SECTION 4.2 Each Credit Event . The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of any Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:
(a) The representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (other than representations and warranties qualified by “materiality or “Material Adverse Effect”, which shall be true and correct in all respects) on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in clauses (a) and (b) of this Section.
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ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall have expired or terminated and all L/C Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that the Borrower shall and shall cause each of its Subsidiaries to:
SECTION 5.1 Financial Statements and Other Information . Furnish or cause to be furnished to the Administrative Agent for distribution to each Lender:
(a) within 100 days (or, after an IPO has been consummated, 90 days) after the end of each fiscal year of the Borrower, its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all audited and reported on by Deloitte & Touche or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied; provided, that after an IPO has been consummated, Annual Reports on Form 10-K filed with or furnished to the SEC by the Borrower shall constitute delivery to the Administrative Agent under this reporting requirement to the extent such Annual Reports include the information specified herein;
(b) within 60 days (or, after an IPO has been consummated, 45 days) after the end of each fiscal quarter of each fiscal year of the Borrower, its consolidated balance sheet and related statements of operations and cash flows as of the end of such fiscal quarter and for the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes; provided, that after an IPO has been consummated, Quarterly Reports on Form 10-Q filed with or furnished to the SEC by the Borrower shall constitute delivery to the Administrative Agent under this reporting requirement to the extent such quarterly reports include the information specified herein;
(c) within 60 days after the end of each fiscal quarter of the Borrower (or 100 days, in the case of the fourth fiscal quarter of each fiscal year), in each case only prior to an IPO, a narrative discussion and analysis of the financial condition and results of operations of the Borrower and its Subsidiaries for such fiscal quarter and for the period from the beginning of the then current fiscal year to the end of such fiscal quarter, as compared to the comparable periods of the previous year;
(d) concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate of a Financial Officer (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.1 and (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.4 or the most recent report delivered pursuant to this paragraph, as the case may be, and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;
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(e) within 30 days after any delivery of financial statements under clause (a) above, a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Event of Default under Section 6.1 (which certificate may be limited to the extent required by accounting rules or guidelines); provided , however , that such certificate need not be provided if it is the general practice and policy of such accounting firm not to provide or issue such certificates;
(f) at any time prior to an IPO, if reasonably requested by the Administrative Agent, not later than 90 days after the commencement of each fiscal year of the Borrower, a detailed consolidated budget for such fiscal year (including a projected consolidated balance sheet and related statements of projected operations and cash flow as of the end of and for such fiscal year) and, promptly when available, any significant revisions of such budget;
(g) promptly following receipt thereof, copies of any documents described in (i) Sections 101(f) or 101(j) of ERISA that the Borrower, any Subsidiary or any ERISA Affiliate may request with respect to any a Plan and/or (ii) Section 101(f), 101(k), or 101(l) or ERISA request with respect to any Multiemployer Plan; provided, that if the Borrower, any Subsidiary or any ERISA Affiliate has not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, then, upon reasonable request of the Administrative Agent, the Borrower, each Subsidiary and each ERISA Affiliate shall promptly make a request for such documents or notices from such administrator or sponsor and/or the Borrower shall provide copies of such documents and notices to the Administrative Agent promptly after receipt thereof; and
(h) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of any Loan Document, as the Administrative Agent or any Lender may reasonably request.
SECTION 5.2 Notices of Material Events . Furnish to the Administrative Agent for distribution to each Lender prompt written notice of the following:
(a) the occurrence of any Default within 5 Business Days after a Responsible Officer of the Borrower becoming aware of the existence of such Default;
(b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any of its Subsidiaries or any Affiliate thereof that, could reasonably be expected to result in a Material Adverse Effect; and
(c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
SECTION 5.3 Existence; Conduct of Business . (a) Continue to engage in business of the same fields of enterprise as it is presently engaged or fields of enterprise reasonably related or incidental thereto or not inconsistent therewith and (b) preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business except where the failure to do so would not reasonably be expected to result in a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution expressly permitted under Section 6.4.
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SECTION 5.4 Payment of Obligations . Pay its Indebtedness and other obligations, including Tax liabilities, before the same shall become delinquent or in default, except where (a) (i) the validity or amount thereof is being contested in good faith by appropriate proceedings and (ii) the Borrower or such Subsidiary, as the case may be, has set aside on its books adequate reserves with respect thereto in accordance with GAAP or (b) the failure to make payment could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.5 Maintenance of Properties; Insurance . Keep and maintain all Property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted (it being understood that the foregoing shall not prohibit any Disposition permitted by Section 6.5), and maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations.
SECTION 5.6 Books and Records; Inspection and Audit Rights . Keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities and permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and (with the opportunity of a representative of the Borrower to be present) independent accountants, all at such reasonable times and intervals as reasonably requested.
SECTION 5.7 Compliance with Laws and Agreements . Comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its Property and all indentures, agreements and other instruments binding upon it or its Property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.8 Intellectual Property . In each case, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect:
(a) (i) continue to use each Trademark on each and every trademark class of goods applicable to its current line as reflected in its current advertising, promotions and communications with third parties in order to maintain such Trademark in full force free from any claim of abandonment for non-use, (ii) use commercially reasonable efforts to maintain as in the past the quality of products and services offered under all Trademarks and (iii) use commercially reasonable efforts to employ each Trademark with all appropriate notices and legends;
(b) not (and not permit any licensee or sublicensee thereof to) do any act, or omit to do any act, whereby (i) any Intellectual Property may become abandoned, invalidated, dedicated, cancelled or otherwise fall into the public domain; (ii) any Patent License, Copyright License or Trademark License may become subject to termination or cancellation by the other party to such license; (iii) the validity or value of any Patent, Copyright or Trademark that is subject to a Patent License, Copyright License or Trademark License will be jeopardized or impaired;
(c) take all reasonable and necessary steps, including, without limitation, in any proceeding before the United States Patent and Trademark Office, the United States Copyright Office, or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue each application (and to obtain the relevant registration) for and to maintain each registration of the Intellectual Property, including, without limitation, filing of applications for renewal, affidavits of use and affidavits of incontestability; and
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(d) in the event that any third party causes the Infringement of any Intellectual Property of the Borrower and its Subsidiaries, (i) take such actions (or cause such Subsidiary to take such action) as the Borrower shall reasonably deem appropriate under the circumstances to protect such Intellectual Property and (ii) if such Intellectual Property is of material economic value, promptly notify the Administrative Agent and the Lenders after it learns thereof and sue for Infringement, seek injunctive relief where appropriate, and recover any and all damages for such Infringement.
SECTION 5.9 Environmental Laws . (a) Comply with all applicable Environmental Laws, and obtain, maintain and comply with any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws, except where failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and testing and all remedial, removal and other actions required under Environmental Laws and promptly comply with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.10 Future Guarantors (a) Cause each new Domestic Subsidiary (other than Immaterial Subsidiaries) to become a party to the Subsidiary Guarantee within 30 days of the creation or acquisition thereof and, if requested by the Administrative Agent, furnish a legal opinion of outside counsel with respect thereto comparable to the legal opinions previously delivered in respect of the Subsidiary Guarantee.
(b) In addition, the Borrower shall have the option to cause any of its other Domestic Subsidiaries to become a Subsidiary Guarantor and, if requested by the Administrative Agent, shall furnish a legal opinion of outside counsel with respect thereto comparable to the legal opinions previously delivered in respect of the Subsidiary Guarantee.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired or terminated and all L/C Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that the Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly:
SECTION 6.1 Financial Condition Covenants . (a) Consolidated Leverage Ratio . As of the last date of each fiscal quarter, permit the Consolidated Leverage Ratio as at the last day of any period of four consecutive fiscal quarters of the Borrower ending on such date to exceed the Maximum Leverage Ratio.
(b) Consolidated Interest Coverage Ratio . As of the last date of each fiscal quarter, permit the Consolidated Interest Coverage Ratio for any period of four consecutive fiscal quarters of the Borrower ending on such date to be less than 3.0 to 1.0.
SECTION 6.2 Priority Debt . Permit the aggregate outstanding principal amount of Priority Debt to exceed 10% of the consolidated assets of the Borrower and its Subsidiaries (determined as of the last day of the most recently ended fiscal quarter of the Borrower).
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SECTION 6.3 Liens . Create, incur, assume or permit to exist any Lien on any Property now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any Property of the Borrower or any Subsidiary existing on the Effective Date and securing Indebtedness and other obligations in an aggregate principal amount not exceeding $30,000,000; provided that (i) such Lien shall not apply to any other Property of the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;
(c) any Lien existing on any Property prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any Property of any Person that becomes a Subsidiary after the Effective Date prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in contemplation or in connection with such acquisition or such Person becoming a Subsidiary, (ii) such Lien shall not apply to any other Property of the Borrower or any Subsidiary, (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof and (iv) the aggregate amount of obligations so secured shall not exceed $50,000,000 at any one time outstanding;
(d) Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any Subsidiary (including in respect of Capital Lease Obligations); provided that (i) the aggregate principal amount of the Indebtedness or other obligations secured by such Liens does not exceed $100,000,000, (ii) such security interests and the Indebtedness secured thereby are incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such security interests shall not apply to any other Property of the Borrower or any Subsidiary;
(e) Liens on cash deposits (i) to the extent required in connection with the operation of a Pooling System or (ii) to the extent securing loans (in an amount equal to the amount of such cash deposits) made by financial institutions in China or Brazil to Subsidiaries in those jurisdictions;
(f) any Lien that arises or may be deemed to arise from any Permitted Receivables Facility or from other sales of receivables pursuant to factoring permitted pursuant to Section 6.5(f);
(g) [RESERVED];
(h) Liens on cash collateral required to be provided by the Borrower pursuant to Section 2.20;
(i) Liens in respect of the Borrower’s obligations under Section 4062(e) of ERISA as a result of the cessation of operations at the Borrower’s manufacturing facility in Rocky Point, North Carolina in an amount not to exceed $15,000,000;
(j) Liens not permitted by the foregoing clauses securing Priority Debt permitted by Section 6.2; provided that no Lien securing Specified Debt (excluding Liens on assets of Foreign Subsidiaries securing Specified Debt of Foreign Subsidiaries) may be granted pursuant to this clause (j)
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unless the obligations of the Loan Parties under the Loan Documents shall be concurrently secured equally and ratably with such Specified Debt pursuant to documentation in form and substance reasonably satisfactory to the Required Lenders; and
(k) Liens not permitted by the foregoing clauses securing Priority Debt permitted by Section 6.2 in an aggregate amount not to exceed $50,000,000 at any time; provided that, after giving effect to the granting of any such Liens, the aggregate value of assets encumbered by all Liens incurred pursuant to this clause (k) shall not exceed 10% of the consolidated assets of the Borrower and its Domestic Subsidiaries (determined as of the last day of the most recently ended fiscal quarter of the Borrower).
SECTION 6.4 Fundamental Changes . (a) Merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing (i) any Subsidiary or Acquired Person may merge into the Borrower or any Subsidiary Guarantor in a transaction in which the Borrower or such Subsidiary Guarantor, as the case may be, is the surviving entity, (ii) any Subsidiary (other than a Subsidiary Guarantor) or Acquired Person may merge into any Subsidiary that is not a Loan Party in a transaction in which the surviving entity is a Subsidiary, (iii) any Subsidiary (other than a Subsidiary Guarantor, unless prior to, or substantially concurrently with, such transaction such Subsidiary Guarantor has transferred substantially all of its assets to the Borrower or another Subsidiary Guarantor) may liquidate or dissolve if the Borrower determines in good faith such liquidation or dissolution is in the best interests of the Borrower and its Subsidiaries, and is not materially disadvantageous to the Lenders; provided that any such merger involving a Person that is not a Wholly Owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.5, and (iv) any Subsidiary may merge into or consolidate with any Person in a transaction permitted by Section 6.5(g). As used in this paragraph (a), “Acquired Person” refers to any Person acquired in an acquisition transaction.
(b) Engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the Effective Date and businesses reasonably related thereto.
SECTION 6.5 Asset Sales . Dispose of any asset, including any Capital Stock, nor permit any of its Subsidiaries to issue any additional shares of its Capital Stock or other ownership interest in such Subsidiary, except:
(a) sales of inventory, used or surplus equipment and Permitted Investments in the ordinary course of business;
(b) (i) any transfers of assets (x) from any Foreign Subsidiary to the Borrower, any Material Domestic Subsidiary or any Foreign Subsidiary, (y) from any Domestic Subsidiary to the Borrower or any Material Domestic Subsidiary or (ii) from the Borrower to any Material Domestic Subsidiary; provided that nothing in this clause (ii) shall permit the transfer of assets from a Subsidiary Guarantor to a non-Subsidiary Guarantor (other than a non-Subsidiary Guarantor that becomes a Subsidiary Guarantor upon receipt of any such assets);
(c) any transfers of assets by the Borrower or any Subsidiary to any other Subsidiary not permitted by the preceding clause (b), provided that the aggregate fair value of assets so transferred pursuant to this clause (c) shall not exceed $35,000,000 in any fiscal year or shall be pursuant to a tax restructuring that, as determined in good faith by the Borrower, will result in improvements to the Borrower’s consolidated financial condition;
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(d) sales, transfers and dispositions expressly permitted under Section 6.4(a)(i), (ii) or (iii) or Section 6.6(a);
(e) issuances of Capital Stock or other ownership interests by a Subsidiary to the Borrower or any Wholly-Owned Subsidiary;
(f) sales of receivables pursuant to any Permitted Receivables Facility and sales of receivables by any Swiss, French, Dutch, United Kingdom, Spanish, German or Italian Subsidiary pursuant to factoring arrangements entered into in the ordinary course of business consistent with past practices; and
(g) Dispositions of assets in any fiscal year in an aggregate amount not to exceed 20% of the consolidated assets of the Borrower and its Subsidiaries as of the beginning of such fiscal year;
provided that all sales, transfers, leases and other dispositions, other than (i) pursuant to Section 6.5(a), (b) or (c) or (ii) Restricted Payments made pursuant to Section 6.6(a), permitted hereby shall be made for fair value.
SECTION 6.6 Restricted Payments; Certain Payments of Subordinated Indebtedness . (a) Declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except (i) the Borrower may declare and pay dividends with respect to its Capital Stock payable solely in additional shares of its common stock, (ii) Subsidiaries may declare and pay dividends ratably with respect to their Capital Stock, (iii) so long as no Default or Event of Default shall have occurred and be continuing, the Borrower may purchase the Borrower’s common stock or common stock options from, and declare dividends in respect of unvested Capital Stock and pay such declared dividends upon vesting of such Capital Stock in each case held by, present or former officers, directors or employees of the Borrower or any Subsidiary in accordance with compensation plans, (iv) any Subsidiary may redeem its own Capital Stock so long as all payments in respect thereof are made to its parent company, which shall be either the Borrower or a Wholly Owned Subsidiary of the Borrower, (v) so long as no Default or Event of Default shall have occurred and be continuing (including after giving pro forma effect thereto), the Borrower may declare and make Restricted Payments, provided , that the aggregate amount expended pursuant to this clause (v) after the Effective Date does not exceed the sum of (x) $50,000,000, (y) 50% of cumulative Consolidated Net Income since July 1, 2009 (which shall not be less than $0) and (z) the aggregate Net Proceeds received by the Borrower after June 16, 2010 from the issuance of its Capital Stock, (vi) so long as no Default or Event of Default shall have occurred and be continuing (including after giving pro forma effect thereto), the Borrower may declare and make additional Restricted Payments, provided , that the aggregate amount expended pursuant to this clause (vi) in any fiscal year of the Borrower shall not exceed $70,000,000 (or its equivalent in another currency), it being agreed that the Borrower shall be permitted to carry forward unused amounts to subsequent fiscal years (beginning with unused amounts in the fiscal year ending June 30, 2013), and (vii) the Borrower may pay any dividend within 90 days after the date of declaration thereof, if the Borrower would have been permitted to make such payment under another clause of this Section 6.6 on the date of such declaration.
(b) Make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other Property) of or in respect of principal of or interest on, or any payment or other distribution (whether in cash, securities or other Property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of, any Subordinated Indebtedness, except, unless prohibited by the subordination terms thereof, (i) payment of regularly scheduled interest payments as and when due in respect of such Subordinated Indebtedness or Affiliate Subordinated Indebtedness, (ii) except in the case of Affiliate
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Subordinated Indebtedness, payment of regularly scheduled principal payments as and when due, (iii) principal prepayments in respect of (x) such Subordinated Indebtedness funded with other Subordinated Indebtedness of the Borrower or (y) such Affiliate Subordinated Indebtedness funded with other Affiliate Subordinated Indebtedness of the Borrower or, in each case, the Net Proceeds of any offering of Capital Stock of the Borrower, provided that, such prepayments may be made with the Net Proceeds of other Subordinated Indebtedness or other Affiliate Subordinated Indebtedness, as applicable, only if, after giving effect to the incurrence of such Subordinated Indebtedness or Affiliate Subordinated Indebtedness, no Default or Event of Default shall exist (including, on a pro forma basis (determined as if such Subordinated Indebtedness or Affiliate Subordinated Indebtedness had been incurred on the first day of the relevant period of four consecutive fiscal quarters)) and (iv) so long as no Default or Event of Default shall have occurred and be continuing, the Borrower may repay Subordinated Indebtedness or Affiliate Subordinated Indebtedness, so long as at the time of such payment, after giving pro forma effect thereto, the Consolidated Leverage Ratio is less than 2.0 to 1.0.
SECTION 6.7 Limitations on Modifications of Subordinated Indebtedness . Amend, modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the terms of any Subordinated Indebtedness or Affiliate Subordinated Indebtedness unless, after giving effect thereto, such Indebtedness shall continue to qualify as “Subordinated Indebtedness” or “Affiliate Subordinated Indebtedness”, as the case may be.
SECTION 6.8 Transactions with Affiliates . Sell, lease or otherwise transfer any Property to, or purchase, lease or otherwise acquire any Property from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions that are at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among the Borrower and Subsidiaries of the Borrower not involving any other Affiliate, and (c) any Restricted Payment expressly permitted by Section 6.6.
SECTION 6.9 Restrictive Agreements . Directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Domestic Subsidiary to create, incur or permit to exist a first priority Lien upon any of its Property securing the obligations of the Borrower hereunder or, in the case of Domestic Subsidiaries, Guarantees thereof (collectively, “Obligations”), or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its Capital Stock or to make or repay loans or advances to the Borrower or any Subsidiary or to Guarantee Indebtedness of the Borrower or any Subsidiary or to transfer assets to the Borrower or any Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by (A) law or (B) any Loan Document, (ii) the foregoing shall not apply to restrictions and conditions contained in any agreement by which the Borrower or any Subsidiary is bound as a result of the consummation of an acquisition, so long as such agreement was in effect at the time of such acquisition and was not created in contemplation of or in connection with such acquisition and such restrictions and conditions only apply to the Person or assets so acquired (but shall apply to any amendment or modification expanding the scope of any such restriction or condition described in this clause (ii)), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the Property securing such Indebtedness, (v) clause (a) of the foregoing shall not apply to customary provisions in leases or licenses restricting the assignment thereof, (vi) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to Indebtedness if such restrictions or conditions (x) permit Liens on any and all assets of the Borrower and its Domestic Subsidiaries to
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secure the Obligations at least on a pari passu basis with such Indebtedness (including pursuant to a customary “equal and ratable” clause), and (y) are otherwise customary for similar debt issuances (as certified, in the case of this clause (y), by a Financial Officer pursuant to a certificate reasonably acceptable to the Administrative Agent, which certificate, upon acceptance by the Administrative Agent, shall be conclusive as to compliance with this clause (y) and (vii) clause (b) of the foregoing shall not apply to restrictions or conditions imposed by any instrument or agreement relating to Indebtedness if such restrictions or conditions (x) either (i) are not materially more restrictive in the aggregate than the restrictions contained in the Loan Documents or (ii) the Borrower’s Board of Directors determines in good faith that such restrictions or conditions could not reasonably be expected to have a material adverse effect on the Borrower and/or the Subsidiary Guarantors’ ability to pay the Obligations when due, and (y) are otherwise customary for similar debt issuances (as certified, in the case of this clause (y), by a Financial Officer pursuant to a certificate reasonably acceptable to the Administrative Agent, which certificate, upon acceptance by the Administrative Agent, shall be conclusive as to compliance with this clause (y)).
ARTICLE VII
Events of Default
If any of the following events (“ Events of Default ”) shall occur:
(a) the Borrower shall fail, in the applicable currency, to pay any principal of any Loan or any reimbursement obligation in respect of any L/C Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay, in the applicable currency, any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three Business Days (which grace period, except in the case of interest and fees, shall not commence until notice is given to the Borrower by the Administrative Agent or any affected Lender);
(c) any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect (other than representations and warranties qualified by “materiality or “Material Adverse Effect”, which shall be true and correct in all respects) when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 3.15, 5.2(a), 5.3 (with respect to the existence of the Borrower), 5.10 or in Article VI; provided , that a failure to observe or perform any covenant, condition or agreement contained in Section 5.10 shall constitute an Event of Default under this Agreement five Business Days after such failure has occurred;
(e) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those specified in clause (a), (b), or (d) of this Article), and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent or the Required Lenders through the Administrative Agent to the Borrower;
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(f) the Borrower or any of its Subsidiaries shall (i) default in making any payment of any principal of any Indebtedness (including, without limitation, any Guarantee of Indebtedness, but excluding the Loans) on the scheduled or original due date with respect thereto; or (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness at such time (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or (in the case of any such Indebtedness constituting a Guarantee) to become payable (other than as a result of any sale or other disposition of any property or assets under the terms of such Indebtedness); provided , that a default, event or condition described in clause (i), (ii) or (iii) of this clause (f) shall not at any time constitute an Event of Default under this Agreement unless, at such time, one or more defaults, events or conditions of the type described in clauses (i), (ii) and (iii) of this clause (f) shall have occurred and be continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $75,000,000; provided further , that this clause (f) shall not apply if such default is remedied or waived by the holders of such Indebtedness prior to the termination of Commitments or acceleration of Loans pursuant to this Article VII;
(g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, administration, reorganization or other relief in respect of the Borrower or any Subsidiary (other than any Immaterial Subsidiary) or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, administrative receiver, administrator, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary (other than any Immaterial Subsidiary) or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;
(h) the Borrower or any Subsidiary (other than any Immaterial Subsidiary) shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, administration, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (g) of this Article, (iii) apply for or consent to the appointment of a receiver, administrative receiver, administrator, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary (other than any Immaterial Subsidiary) or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;
(i) the Borrower or any Subsidiary (other than any Immaterial Subsidiary) shall become (or shall be deemed for the purposes of any Requirement of Law to be) unable, admit in writing its inability or fail generally to pay its debts as they become due;
(j) one or more judgments for the payment of money in an aggregate amount in excess of $75,000,000 shall be rendered against the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Subsidiary to enforce any such judgment;
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(k) an ERISA Event shall have occurred that when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;
(l) the subordination provisions of any Subordinated Indebtedness or Affiliate Subordinated Indebtedness or guarantees thereof shall cease to be, or shall be asserted by any holder thereof not to be, in full force and effect in accordance with the terms thereof at any time when any Subordinated Indebtedness or Affiliate Subordinated Indebtedness or guarantees thereof is outstanding; or
(m) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower described in clause (g) or (h) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (g) or (h) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent
Each of the Lenders and each Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.2), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or
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obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.2) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall not be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of preceding clauses shall apply to any such sub-agent and to the Related Parties of each Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
The Administrative Agent may resign at any time by notifying the Lenders, each Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders shall have the right, with the consent of the Borrower (which consent shall not be unreasonably withheld), to appoint a successor; provided that no such consent of the Borrower shall be required if an Event of Default under clause (a), (b), (g) or (h) of Article VII has occurred and is continuing. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 10 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.4 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.
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Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or related agreement or any document furnished hereunder or thereunder.
None of the Syndication Agents or the Joint Lead Arrangers shall have any duties or responsibilities under any Loan Document in their respective capacities as such.
Neither the Administrative Agent, the Syndication Agents, the Joint Lead Arrangers nor any Lender has any advisory or fiduciary relationship with or duty to the Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Administrative Agent and the Lenders, on one hand, and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor.
ARTICLE IX
Miscellaneous
SECTION 9.1 Notices . Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to Coty Inc., 2 Park Avenue, New York, NY 10016, Attention of Jules Kaufman, General Counsel (Telecopy No. 212-479-4328);
(b) if to the Administrative Agent, as applicable, to J.P. Morgan Europe Limited, 25 Bank Street, Canary Wharf, London E14 5JP, United Kingdom, Attention of the Manager, Loan & Agency Services (Telecopy No. 44 207 777 2360), or to JPMorgan Chase Bank, N.A., 500 Stanton Christiana Rd, 3/Ops2 Newark, DE 19713, Attention of Tiffany C. Taylor (Telecopy No. 302-634-3301), in each case with a copy to JPMorgan Chase Bank, N.A., 383 Madison Ave., 24 th Fl., New York, NY 10179, Attention of Tony Young (Telecopy No. 212-270-6637); and
(c) if to any Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.2 Waivers; Amendments . (a) No failure or delay by the Administrative Agent, any Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, any Issuing Bank and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise
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have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by clause (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or any Issuing Bank may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, in each case with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or L/C Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender directly affected thereby, (iii) postpone the date fixed for the payment of the principal amount (including the final scheduled payment) of any Loan or L/C Disbursement, or the date fixed for the payment of any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, or permit a Letter of Credit to expire later than the date referred to in Section 2.5(c)(ii) without the written consent of each Lender directly affected thereby, (iv) change any provision of this Agreement providing for pro rata sharing of the payments among the Lenders without the written consent of each Lender directly affected thereby, (v) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders (or Lenders of any Class) required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (or each Lender of such Class, as the case may be) or (vi) release all or substantially all of the Subsidiary Guarantors from their Guarantees under the Subsidiary Guarantee (except as expressly provided therein), without the written consent of each Lender; provided , further , that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, any Issuing Bank or any Swingline Lender without the prior written consent of the Administrative Agent, such Issuing Bank or such Swingline Lender, as the case may be.
SECTION 9.3 Judgment Currency . (a) The Borrower’s obligations hereunder and under the other Loan Documents to make payments in a specified currency (the “ Obligation Currency ”) shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than the Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by the Administrative Agent or a Lender of the full amount of the Obligation Currency expressed to be payable to the Administrative Agent or such Lender under this Agreement or the other Loan Documents. If, for the purpose of obtaining or enforcing judgment against any Loan Party in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other than the Obligation Currency (such other currency being hereinafter referred to as the “ Judgment Currency ”) an amount due in the Obligation Currency, the conversion shall be made, at the rate of exchange (as quoted by the Administrative Agent or if the Administrative Agent does not quote a rate of exchange on such currency, by a known dealer in such currency designated by the Administrative Agent) determined, in each case, as of the Business Day immediately preceding the date on which the judgment is given (such Business Day being hereinafter referred to as the “ Judgment Currency Conversion Date ”).
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(b) If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of the amount due, the Borrower covenants and agrees to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount), as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the rate of exchange prevailing on the Judgment Currency Conversion Date.
(c) For purposes of determining any rate of exchange or currency equivalent for this Section, such amounts shall include any premium and costs payable in connection with the purchase of the Obligation Currency.
SECTION 9.4 Expenses; Indemnity; Damage Waiver . (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Syndication Agents, the Joint Lead Arrangers and each of their respective Affiliates including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, the Syndication Agents, the Joint Lead Arrangers, in connection with the syndication of the credit facilities provided for herein or preparation and administration of the Loan Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) The Borrower shall indemnify the Administrative Agent, each Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any other agreement or instrument contemplated hereby, the performance by the parties to the Loan Documents of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by any Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on any Property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to a Borrower or any of its Subsidiaries, (iv) any conversion or translation of a currency into another currency, or (v) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, regardless of whether any Indemnitee is a party thereto and whether or not the same are brought by the Borrower, its equity holders, affiliates or creditors or any other Person; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses result from the gross negligence or willful misconduct of such Indemnitee or the material breach by such Indemnitee of its obligations under the Loan Documents.
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(c) To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent, the relevant Issuing Bank or the Swingline Lender under clause (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent, the relevant Issuing Bank or the Swingline Lender, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the relevant Issuing Bank or the Swingline Lender in its capacity as such. For purposes hereof, a Lender’s “pro rata share” shall be determined based upon its share of the sum of the total Revolving Exposures, outstanding Term Loans and unused Commitments at the time.
(d) To the extent permitted by applicable law, the Borrower shall not assert, and the Borrower hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not later than 15 days after written demand therefor.
(f) No Indemnitee referred to in paragraph (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.
SECTION 9.5 Successors and Assigns; Participations and Assignments . (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees (each, an “ Assignee ”), other than a natural person, any Loan Party or any Affiliate of a Loan Party, all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it) with the prior written consent of:
(A) the Borrower (which consent, in the case of an Eligible Assignee, shall not be unreasonably withheld or delayed), provided that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender or, if an Event of Default has occurred and is continuing, any other Person, and provided , further , that, the Borrower shall be deemed to have consented to any such assignment unless the Borrower shall object thereto by written notice to the Administrative Agent within fifteen Business Days after having received notice thereof;
(B) the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment of all or any portion of a Term Loan to a Lender or an Affiliate of a Lender; and
(C) in the case of any assignment of Revolving Commitments, the Issuing Bank.
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(ii) Assignments shall be subject to the following additional conditions:
(A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitments or Loans, the minimum aggregate assignment amount and the minimum amount retained by the assignor after giving effect to any partial assignment shall, in each case, be $5,000,000 unless otherwise agreed by the Borrower and the Administrative Agent;
(B) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; and
(C) the Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an administrative questionnaire.
(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) below, from and after the effective date specified in each Assignment and Assumption the Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.17 and 9.4). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.5 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount (and stated interest) of the Loans and L/C Exposure owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower at any reasonable time and from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an Assignee, the Assignee’s completed administrative questionnaire (unless the Assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrower, any Issuing Bank or the Administrative Agent, sell participations to one or more banks or other entities (a “ Participant ”), other than a natural person, any Loan Party or any Affiliate of a Loan Party, in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such
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obligations and (C) the Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that (1) requires the consent of each Lender directly affected thereby pursuant to the proviso to Section 9.2(b) and (2) directly affects such Participant. Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.17 and 9.4 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.9 as though it were a Lender, provided such Participant shall be subject to Section 2.18(c) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans, Letters of Credit or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.
(ii) A Participant shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. No Participant shall be entitled to the benefits of Section 2.17 unless such Participant complies with Section 2.17(e) as if it were a Lender.
(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to any central bank or a member bank of the Federal Reserve System or central bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or Assignee for such Lender as a party hereto.
(e) The Borrower, upon receipt of written notice from the relevant Lender, agrees to issue Notes to any Lender requiring Notes to facilitate transactions of the type described in paragraph (d) above.
(f) Notwithstanding the foregoing, any Conduit Lender may assign any or all of the Loans it may have funded hereunder to its designating Lender without the consent of the Borrower or the Administrative Agent and without regard to the limitations set forth in Section (b). Each of the Borrower, each Lender and the Administrative Agent hereby confirms that it will not institute against a Conduit Lender or join any other Person in instituting against a Conduit Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any state bankruptcy or similar law, for one year and one day after the payment in full of the latest maturing commercial paper note issued by such Conduit Lender; provided , however, that each Lender designating any Conduit Lender hereby agrees to indemnify, save and hold harmless each other party hereto for any loss, cost, damage or
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expense arising out of its inability to institute such a proceeding against such Conduit Lender during such period of forbearance.
SECTION 9.6 Survival . All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder. The provisions of Sections 2.15, 2.16, 2.17, 9.4, 9.13 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.7 Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.1, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by email or telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.
SECTION 9.8 Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 9.9 Right of Setoff . If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.
SECTION 9.10 Governing Law; Jurisdiction; Consent to Service of Process . (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for itself and its Property, to the exclusive jurisdiction and venue of the state or federal courts located in the Borough of
71
Manhattan in the City of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that, to the extent permitted by law, a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or the Borrower’s properties in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in clause (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents, to the fullest extent permitted by law, to service of process in the manner provided for notices in Section 9.1. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
SECTION 9.11 WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.12 Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 9.13 Confidentiality . Each of the Administrative Agent, each Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors in connection with the Transactions and the administration of this Agreement and the other Loan Documents (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same
72
as those of this Section, to any Assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, (g) with the consent of the Borrower, (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrower or (i) subject to an agreement containing provisions substantially the same as those of this Section, to any credit insurance provider or direct, indirect, actual or prospective counterparty (and its advisor) to any swap, derivative or securitization transaction related to the obligations under this Agreement. For the purposes of this Section, “Information” means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to the Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the Borrower.
SECTION 9.14 Releases of Guarantees . Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Administrative Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender except as expressly required by Section 9.2) to take any action requested by the Borrower having the effect of releasing any guarantee obligations to the extent necessary to permit the consummation of any transaction that is permitted by this Agreement or that has been consented to in accordance with Section 9.2.
SECTION 9.15 USA Patriot Act . Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Act ”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with the Act.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
73
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
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COTY INC. |
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By: |
/s/ Sérgio Pedreiro |
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Name: Sérgio Pedreiro |
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Title: Chief Financial Officer |
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[Signature Page to Coty Credit Agreement]
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JPMORGAN
CHASE BANK, N.A., as Administrative
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By: |
/s/ Tony Yung |
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Name: Tony Yung |
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Title: Executive Director |
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[Signature Page to Coty Credit Agreement]
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JPMorgan Chase Bank, N.A., as a Lender |
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By: |
/s/ Sarah Freedman |
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Name: Sarah Freedman |
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Title: Executive Director |
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[Signature Page to Coty Credit Agreement]
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BANK OF AMERICA, N.A. , as a Lender |
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By: |
/s/ J. Casey Cosgrove |
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Name: J. Casey Cosgrove |
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Title: Director |
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[Signature Page to Coty Credit Agreement]
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BNP Paribas, as a Lender |
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By: |
/s/ P. Nicholas Rogers |
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Name: P. Nicholas Rogers |
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Title: Managing Director |
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By: |
/s/ Nanette Baudon |
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Name: Nanette Baudon |
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Title: Director |
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[Signature Page to Coty Credit Agreement]
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BANK OF THE WEST, as a Lender |
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By: |
/s/ Francesco Ingargiola |
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Name: Francesco Ingargiola |
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Title: Senior Vice President |
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[Signature Page to Coty Credit Agreement]
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FIRST HAWAIIAN BANK, as a Lender |
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By: |
/s/ Landon Santos |
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Name: Landon Santos |
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Title: Corporate Banking Officer |
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[Signature Page to Coty Credit Agreement]
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CRÉDIT
AGRICOLE CORPORATE AND
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By: |
/s/ Elvis Grgurovic |
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Name: Elvis Grgurovic |
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Title: Director |
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By: |
/s/ Pamela Donnelly |
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Name: Pamela Donnelly |
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Title: Managing Director |
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[Signature Page to Coty Credit Agreement]
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Deutsche Bank AG New York Branch, as a Lender |
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By: |
/s/ Ming K. Chu |
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Name: Ming K. Chu |
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Title: Vice President |
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By: |
/s/ Virginia Cosenza |
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Name: Virginia Cosenza |
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Title: Vice President |
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[Signature Page to Coty Credit Agreement]
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ING BANK N.V., as a Lender |
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By: |
/s/ Russell Boon |
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Name: Russell Boon |
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Title: Director |
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By: |
/s/ Diederik Sluijs |
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Name: Diederik Sluijs |
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Title: Director |
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[Signature Page to Coty Credit Agreement]
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The Bank of Tokyo-Mitsubishi UFJ, Ltd, as a Lender |
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By: |
/s/ Maria Iarriccio |
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Name: Maria Iarriccio |
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Title: Vice President |
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[Signature Page to Coty Credit Agreement]
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MORGAN STANLEY BANK, N.A., as a Lender |
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By: |
/s/ Michael King |
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Name: Michael King |
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Title: Authorized Signatory |
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[Signature Page to Coty Credit Agreement]
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Wells Fargo Bank, N.A., as a Lender |
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By: |
/s/ William A. Demilt, Jr. |
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Name: William A. Demilt, Jr. |
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Title: Senior Vice President |
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[Signature Page to Coty Credit Agreement]
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Barclays Bank PLC, as a Lender |
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By: |
/s/ Vanessa Kurbatskiy |
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Name: Vanessa Kurbatskiy |
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Title: Vice President |
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[Signature Page to Coty Credit Agreement]
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Fifth Third Bank, as a Lender |
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By: |
/s/ Michelle Dawidziak |
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Name: Michelle Dawidziak |
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Title: Assistant Vice President |
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[Signature Page to Coty Credit Agreement]
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Mizuho Corporate Bank, Ltd, as a Lender |
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By: |
/s/ Donna DeMagistris |
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Name: Donna DeMagistris |
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Title: Authorized Signatory |
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[Signature Page to Coty Credit Agreement]
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ROYAL BANK OF CANADA, as a Lender |
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By: |
/s/ John Flores |
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Name: John Flores |
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Title: Authorized Signatory |
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[Signature Page to Coty Credit Agreement]
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THE ROYAL BANK OF SCOTLAND PLC , as a Lender |
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By: |
/s/ Timothy J. McNaught |
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Name: Timothy J. McNaught |
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Title: Managing Director |
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[Signature Page to Coty Credit Agreement]
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U.S. Bank National Association, as a Lender |
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By: |
/s/ Janet E. Jordan |
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Name: Janet E. Jordan |
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Title: Senior Vice President |
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[Signature Page to Coty Credit Agreement]
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HSBC Bank USA, National Association, as a Lender |
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By: |
/s/ Randolph E Cates |
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Name: Randolph E Cates |
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Title: Senior Relationship Manager |
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[Signature Page to Coty Credit Agreement]
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LLOYDS TSB BANK PLC, as a Lender |
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By: |
/s/ Stephen Giacolone |
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Name: Stephen Giacolone |
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Title: Assistant Vice President G011 |
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By: |
/s/ Julia R. Franklin |
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Name: Julia R. Franklin |
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Title: Vice President F014 |
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[Signature Page to Coty Credit Agreement]
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Sumitomo Mitsui Banking Corporation , as a Lender |
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By: |
/s/ Shuji Yabe |
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Name: Shuji Yabe |
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Title: Managing Director |
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[Signature Page to Coty Credit Agreement]
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SOVEREIGN BANK, N.A., as a Lender |
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By: |
/s/ William Maag |
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Name: William Maag |
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Title: Senior Vice President |
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[Signature Page to Coty Credit Agreement]
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COMPASS BANK, as a Lender |
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By: |
/s/ Philip Potter |
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Name: Philip Potter |
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Title: Senior Vice President |
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[Signature Page to Coty Credit Agreement]
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DZ BANK AG |
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Deutsche
Zentral-Genossenschaftsbank New York
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By: |
/s/ Oliver Hildenbrand |
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Name: Oliver Hildenbrand |
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Title: SVP |
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By: |
/s/ Paul Fitzpatrick |
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Name: Paul Fitzpatrick |
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Title: SVP |
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[Signature Page to Coty Credit Agreement]
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Mega
International Commercial Bank Co., Ltd.
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By: |
/s/ Luke Hwang |
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Name: Luke Hwang |
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Title: VP & DGM |
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[Signature Page to Coty Credit Agreement]
SCHEDULE 1.1
Subsidiary Guarantors
Coty US LLC
Calvin Klein Cosmetic Corporation
OPI Products, Inc.
Philosophy Acquisition Company, Inc.
Philosophy, Inc.
S-1
SCHEDULE 2.1
Commitments
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Lender |
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Revolving
|
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Term
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JPMorgan Chase Bank, N.A. |
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$ |
81,250,000 |
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$ |
81,250,000 |
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Bank of America, N.A. |
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$ |
81,250,000 |
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$ |
81,250,000 |
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BNP Paribas |
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$ |
81,250,000 |
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$ |
21,250,000 |
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Bank of the West |
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$ |
0 |
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$ |
35,000,000 |
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First Hawaiian Bank |
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$ |
0 |
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$ |
25,000,000 |
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Credit Agricole Corporate & Investment Bank |
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$ |
81,250,000 |
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$ |
81,250,000 |
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[Deutsche Bank AG New York Branch] |
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$ |
81,250,000 |
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$ |
81,250,000 |
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[ING Bank N.V.] |
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$ |
81,250,000 |
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$ |
81,250,000 |
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The Bank of Tokyo-Mitsubishi UFJ, Ltd |
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$ |
40,625,000 |
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$ |
40,625,000 |
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Morgan Stanley Bank, N.A. |
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$ |
40,625,000 |
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$ |
40,625,000 |
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Wells Fargo Bank, N.A. |
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$ |
81,250,000 |
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$ |
81,250,000 |
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Barclays Bank PLC |
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$ |
65,000,000 |
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$ |
65,000,000 |
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Fifth Third Bank |
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$ |
65,000,000 |
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$ |
65,000,000 |
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Mizuho Corporate Bank, Ltd |
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$ |
65,000,000 |
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$ |
65,000,000 |
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Royal Bank of Canada |
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$ |
65,000,000 |
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$ |
65,000,000 |
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The Royal Bank of Scotland plc |
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$ |
65,000,000 |
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$ |
65,000,000 |
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U.S. Bank National Association |
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$ |
65,000,000 |
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$ |
65,000,000 |
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HSBC Bank USA, National Association |
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$ |
42,500,000 |
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$ |
42,500,000 |
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Lloyds TSB Bank plc |
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$ |
42,500,000 |
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$ |
42,500,000 |
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Sumitomo Mitsui Banking Corporation |
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$ |
42,500,000 |
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$ |
42,500,000 |
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Sovereign Bank N.A. |
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$ |
40,000,000 |
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$ |
40,000,000 |
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Compass Bank |
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$ |
25,000,000 |
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$ |
25,000,000 |
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DZ Bank AG
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$ |
12,500,000 |
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$ |
12,500,000 |
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Mega International Commercial Bank Co., Ltd New York Branch |
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$ |
5,000,000 |
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$ |
5,000,000 |
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Total |
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$ |
1,250,000,000 |
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$ |
1,250,000,000 |
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S-2
SCHEDULE 2.5
Existing Letters of Credit
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|
|
|
Beneficiary |
|
Letter of
Credit
|
|
Expiration Date |
|
Amount |
|
|
|
|
|
|
|
|||||
|
Atlantic Mutual |
|
P-249586 |
|
July 15, 2013 |
|
$ |
40,000.00 |
|
|
Zurich American Insurance Co. |
|
TPTS-262936 |
|
June 2, 2013 |
|
$ |
250,000.00 |
|
|
|
|
|
|
|||||
|
TOTAL |
|
|
|
|
|
$ |
290,000.00 |
|
|
|
|
|
|
|||||
S-3
SCHEDULE 3.6
Disclosed Matters
None.
S-4
SCHEDULE 3.12
Subsidiaries
|
|
|
|
|
Subsidiary Name |
|
Amount owned, indirectly or directly by
|
|
|
||
|
Coty Argentina S.A |
|
Coty
Services and Logistics GmbH: 95%
|
|
Coty Australia Pty. Ltd. |
|
Coty
Investment B.V.: 99.99999%
|
|
Coty Austria GmbH, wien |
|
Coty B.V.: 100% |
|
Coty Benelux S.A. |
|
Coty
B.V.: 99.9%
|
|
Coty Brasil Industria e Comercio de Cosmeticos Ltda. |
|
Coty B.V.: 100% |
|
Lancaster do Brasil Cosmeticos Ltda. |
|
Coty US
LLC: 99.85%
|
|
Coty Canada Inc. |
|
Coty Germany GmbH: 100% |
|
Del Pharmaceutics (Canada) Inc. |
|
DLI International Holding II Corp.: 100% |
|
Coty Cosmeticos Chile Limitada |
|
Coty B.V.: 100% |
|
Coty International Trade (Shanghai) Co. Ltd. |
|
Coty France S.A.S.: 100% |
|
Coty Prestige Shanghai Ltd. |
|
Coty Prestige Shanghai (HK) Ltd.: 100% |
|
Banon Biochemistry Suzhou |
|
Ming-De
Industrial Co. Ltd.: 8%
|
|
Ganon Biochemistry Technology China |
|
Ming-De
Industrial Co. Ltd.: 8%
|
|
Suzhou Jiahua Biochemistry Co. |
|
Ganon
Biochemistry Techonology China: 75%
|
|
Nanjing Tjoy Biochemical Co. Ltd. |
|
Ganon
Biochemistry Technology China: 75%
|
|
Nanjing Yanting Trade Co. Ltd. |
|
Ganon Biochemistry Technology China: 100% |
|
Nanjing Shenpeng Cosmetics Trading |
|
Banon Biochemistry Suzhou: 100% |
|
Suzhou Jiayi Cosmetics Sales Co. |
|
Banon Biochemistry Suzhou: 100% |
|
TJoy Holdings Co. Ltd. |
|
Coty
Geneva SA: 92%
|
|
Coty Colombia Ltda. |
|
Coty B.V.: 100% |
|
Coty Ceska Republika, k.s. |
|
Coty
B.V.: 99%
|
|
Coty France S.A.S. |
|
Coty S.A.S.: 100% |
|
Coty S.A.S. |
|
Coty
B.V.: 99.9%
|
|
Fragrance Production S.A.S. |
|
Coty
France S.A.S.: 99.6%
|
S-5
|
|
|
|
|
Subsidiary Name |
|
Amount owned, indirectly or directly by
|
|
|
||
|
Coty Germany GmbH |
|
Coty Geneva SA: 100% |
|
Coty Services and Logistics GmbH |
|
Coty Germany GmbH: 100% |
|
Coty Prestige Hellas S.A. |
|
Coty B.V.: 100% |
|
Coty Prestige Southeast Asia (HK) Limited |
|
Coty Prestige Southeast Asia Pte Ltd.: 100% |
|
Coty Prestige Hong Kong Ltd. |
|
Coty
B.V.: 55%
|
|
Kuiqui Holding Ltd. |
|
TJoy Holdings Co. Ltd.: 100% |
|
Chi Chun Industrial Co. Ltd. |
|
TJoy Holdings Co. Ltd.: 100% |
|
Ming-De Investment Co. Ltd. |
|
TJoy Holdings Co. Ltd.: 100% |
|
Super Globe Holdings Ltd. |
|
TJoy Holdings Co. Ltd.: 100% |
|
Coty Prestige Shanghai (HK) Ltd. |
|
Coty
B.V.: 58%
|
|
Coty Hungary Kft. |
|
Coty Germany GmbH: 100% |
|
Coty Ireland Ltd. |
|
Coty Germany GmbH: 100% |
|
Coty Italia S.p.A. |
|
Coty B.V.: 100% |
|
Coty Prestige Japan KK |
|
Coty Prestige Hong Kong Ltd.: 100% |
|
OPI Japan KK |
|
OPI Products Inc.: 100% |
|
Coty Prestige Southeast Asia (M) SDN. BHD. |
|
Coty Prestige Southeast Asia Pte. Ltd.: 100% |
|
Coty Mexico S.A. de C.V. |
|
Coty Inc.: 100% |
|
Lancaster S.A.M. |
|
Coty
B.V.: 99.9%
|
|
Coty B.V. |
|
Coty Geneva S.A. Versoix: 100% |
|
Coty Investment B.V. |
|
Coty Inc.: 100% |
|
Lancaster B.V. |
|
Coty B.V.: 100% |
|
Coty Benelux B.V. |
|
Coty B.V.: 100% |
|
Coty Polska Sp z.o.o. |
|
Coty B.V.: 100% |
|
Coty Prestige España – Surcursal em Portugal |
|
Coty Spain S.L.: 100% |
|
Coty Puerto Rico Inc. |
|
Coty
B.V.: 95%
|
|
Coty Cosmetics Romania S.r.l. |
|
Coty
Germany GmbH: 53%
|
|
Coty Russia ZAO |
|
Coty B.V.: 100% |
|
Coty Beauty LLC |
|
Coty B.V.: 100% |
|
Coty Prestige Southeast Asia Pte. Ltd. |
|
Coty
B.V.: 51%
|
|
Coty Asia Pte. Ltd.. |
|
Coty B.V.: 100% |
|
Coty Slovenska Republika s.r.o. |
|
Coty B.V.: 100% |
|
Coty South Africa (PTY) Ltd. |
|
Coty Germany GmbH: 100% |
|
Coty Prestige España S.A. |
|
Coty Spain, S.L.: 100% |
|
Coty Astor S.A. |
|
Coty Spain, S.L.: 100% |
|
Coty Spain, S.L. |
|
Coty B.V.: 100% |
|
Coty Geneva S.A. Versoix |
|
Coty Investment B.V.: 100% |
|
Coty (Schweiz) AG |
|
Coty B.V.: 100% |
|
Coty Middle East FZCO |
|
Coty
S.A.S.: 60%
|
|
Coty UK Ltd. |
|
Coty Brands Group Ltd.: 100% |
S-6
|
|
|
|
|
Subsidiary Name |
|
Amount owned, indirectly or directly by
|
|
|
||
|
Coty Export U.K. Ltd. |
|
Coty Brands Group Ltd.: 100% |
|
Coty Manufacturing UK Ltd. |
|
Coty Brands Group Ltd.: 100% |
|
Coty Services U.K. Ltd. |
|
Coty Brands Group Ltd.: 100% |
|
India Projects Ltd. |
|
Coty Germany GmbH: 100% |
|
Coty Brands Group Limited |
|
Coty Germany GmbH: 100% |
|
Beauty International Ltd. |
|
Coty Brands Group Ltd: 100% |
|
Lancaster Group, Ltd. |
|
Beauty International Ltd.: 100% |
|
Rimmel International Ltd. |
|
Beauty International Ltd.: 100% |
|
Lady Manhattan Ltd. |
|
Coty Germany GmbH: 100% |
|
Del Laboratories (U.K.) Limited |
|
DLI International Holding I LLC: 100% |
|
Calvin Klein Cosmetic Corporation |
|
Coty Inc.: 100% |
|
Coty Inc. |
|
JAB
Holdings II B.V.: 80.3%
|
|
Coty Prestige Travel Retail and Export LLC |
|
Coty Inc.: 100% |
|
Coty US LLC |
|
Coty Inc.: 100% |
|
Rimmel Inc. |
|
Coty US LLC: 100% |
|
DLI International Holding I LLC |
|
Coty Inc.: 100% |
|
DLI International Holding II Corp. |
|
Coty US LLC: 100% |
|
Philosophy Acquisition Company, Inc. |
|
Coty Inc.: 100% |
|
Philosophy Mezzanine Corp. |
|
Philosophy Acquisition Company, Inc.: 100% |
|
Philosophy, Inc. |
|
Philosophy Mezzanine Corp.: 100% |
|
Philosophy Cosmetics, Inc. |
|
Philosophy Inc.: 100% |
|
Philosophy Beauty Consulting LLC |
|
Philosophy Inc.: 100% |
|
Biotech Research Labs, Inc. |
|
Philosophy Mezzanine Corp.: 100% |
|
OPI Products, Inc. |
|
Coty Inc.: 100% |
S-7
EXHIBIT A TO
CREDIT AGREEMENT
[ FORM OF] ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the “ Assignment and Assumption ”) is dated as of the Effective Date set forth below and is entered into between the Assignor named below (the “ Assignor ”) and the Assignee named below (the “ Assignee ”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “ Credit Agreement ”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit, guarantees, and swingline loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “ Assigned Interest ”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.
|
|
|
|
|
1. |
Assignor: |
______________________________ |
|
|
||
|
2. |
Assignee: |
______________________________ |
|
|
||
|
|
|
[and is an Affiliate of [indentify Lender]] |
|
|
||
|
3. |
Borrower: |
COTY INC. |
|
|
||
|
4. |
Administrative Agent: |
JPMORGAN CHASE BANK, N.A., as administrative agent under the Credit Agreement |
|
|
||
|
5. |
Credit Agreement: |
The Credit Agreement dated as of April 2, 2013 among COTY INC., the Lenders parties thereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and the other agents parties thereto. |
|
|
|
|
|
6. |
Assigned Interest: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Facility Assigned 1 |
|
Aggregate Amount of
|
|
Amount of
|
|
Percentage Assigned of
|
|
|||
|
|
|
|
|
|||||||
|
|
|
$ |
|
|
$ |
|
|
% |
|
|
|
|
|
$ |
|
|
$ |
|
|
% |
|
|
|
|
|
$ |
|
|
$ |
|
|
% |
|
|
Effective Date: ______________, 201_ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The Assignee agrees to deliver to the Administrative Agent a completed administrative questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower, the Loan Parties and their Affiliates or their respective securities) will be made available and who may receive such information in accordance with the Assignee’s compliance procedures and applicable laws, including Federal and state securities laws.
The terms set forth in this Assignment and Assumption are hereby agreed to:
|
|
|
|
|
|
|
ASSIGNOR |
|
|
|
|
|
|
|
|
|
|
||
|
|
NAME OF ASSIGNOR |
|
|
|
|
|
|
|
|
|
By: |
|
|
|
|
|
|
|
|
|
Title: |
|
|
|
|
|
|
|
|
|
ASSIGNEE |
|
|
|
|
|
|
|
|
|
|
||
|
|
NAME OF ASSIGNEE |
|
|
|
|
|||
|
|
By: |
|
|
|
|
|
|
|
|
|
Title: |
|
|
|
|
|
|
|
|
|
1 Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g. “Revolving Commitment,” or “Term Commitment”). |
|
|
|
|
|
2 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders. |
|
2
[Consented to and] 3 Accepted:
[JPMORGAN CHASE BANK, N.A.], as
Administrative Agent
|
|
|
|
|
By |
|
|
|
|
|
|
|
Title: |
|
|
|
|
|
|
|
[Consented to:] 4 |
|
|
|
|
|
|
|
[COTY INC.] |
|
|
|
|
|
|
|
By |
|
|
|
|
|
|
|
Title: |
|
|
|
|
|
|
|
[NAME OF ANY OTHER RELEVANT PARTY] 5 |
||
|
|
|
|
|
By |
|
|
|
|
|
|
|
Title: |
|
|
|
|
|
|
|
|
|
3 To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement. |
|
|
|
|
|
4 To be added only if the consent of the Borrower is required by the terms of the Credit Agreement. |
|
|
|
|
|
5 To be added only if the consent of another party (e.g. Swingline Lender, Issuing Lender) is required by the terms of the Credit Agreement. |
|
3
ANNEX 1
The Credit Agreement dated as of April 2, 2013 among COTY INC., the Lenders parties thereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and the other agents parties thereto.
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties .
1.1 Assignor . The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2. Assignee . The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.1 thereof, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender and (v) if it is a non-U.S. Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
2. Payments . From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.
3. General Provisions . This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by email or telecopy shall be effective as delivery of a manually executed counterpart of this Assignment
2
and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.
EXHIBIT B-1 TO
CREDIT AGREEMENT
FORM OF OPINION OF GENERAL COUNSEL
See Tab 5
|
|
|
April 2, 2013 |
|
|
|
To the Lenders and the Administrative Agent |
|
referred to below |
|
c/o JPMorgan Chase Bank, N.A., |
|
as Administrative Agent |
|
270 Park Avenue |
|
New York, NY 10017 |
|
|
|
Ladies and Gentlemen: |
I am Senior Vice President, General Counsel and Secretary of Coty Inc., a Delaware corporation (the “Borrower”), and I have acted in such capacity in connection with the (i) Credit Agreement, dated as of April 2, 2013 (the “Credit Agreement”) by and among the Borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent thereunder (in such capacity, “Administrative Agent”), and as a lender and (ii) the Subsidiary Guarantee, dated as of April 2, 2013, given by Coty US LLC, a Delaware limited liability company (“Coty US”), Calvin Klein Cosmetic Corporation, a Delaware corporation (“CKCC”), O P I Products, Inc., a Delaware corporation (“OPI Products”), Philosophy Acquisition Company, Inc., a Delaware corporation (“Philosophy Acquisition”) and Philosophy, Inc., an Arizona corporation (“Philosophy” and, together with Coty US, CKCC, OPI Products and Philosophy Acquisition, the “Subsidiary Guarantors”) to the Administrative Agent (all of the foregoing documents, including the Credit Agreement, the “Transaction Documents”). Terms defined in the Credit Agreement and not otherwise defined herein are used herein as therein defined. This opinion is being rendered to you pursuant to Section 4.1(c)(i) of the Credit Agreement.
I have examined, or have caused attorneys under my direction to examine, originals or copies, certified or otherwise identified to my satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted, or have caused to be conducted, such other investigations of fact and law as I or such attorneys have deemed necessary or advisable for purposes of this opinion.
|
|
|
|
|
|
Upon the basis of the foregoing, I am of the opinion that: |
|
|
|
|
|
|
|
1. |
Borrower and each of the Subsidiary Guarantors (other than Philosophy) is a corporation or a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, and have all requisite powers and authority to carry on their business as now conducted and, except where failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, are qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required. |
|
|
|
|
|
|
2. |
Philosophy is a corporation duly organized, validly existing and in good standing under the laws of the State of Arizona, and has all requisite powers and authority to carry on its business as now conducted and, except where failure to do so, |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, are qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required. |
|
|
|
|
|
|
3. |
The execution, delivery and performance by Borrower and each Subsidiary Guarantor of the Transaction Documents to which it is a party are within the Borrower’s or such Subsidiary Guarantor’s corporate or limited liability company, as applicable, powers and have been duly authorized by all necessary corporate or limited liability company, as applicable, action required by the Borrower or such Subsidiary Guarantor, and do not contravene, or constitute a breach of or default under the certificate of incorporation or articles of organization, as applicable, or bylaws or operating agreement, as applicable, of the Borrower or any of the Subsidiary Guarantors or, to my knowledge after due inquiry, of any material agreement, judgment, injunction, order, decree or other instrument binding upon the Borrower or any of its Subsidiaries or result in the creation or imposition of any Lien on any revenues or assets of the Borrower or any of its Subsidiaries pursuant to any such material agreement or other instrument. |
|
|
|
|
|
|
4. |
There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against, or to my knowledge threatened against or affecting the Borrower or any of the Subsidiary Guarantors before any arbitrator or Governmental Authority (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involves any of the Transaction Documents or the Transactions. |
|
|
|
|
|
[ Remainder of page intentionally left blank .] |
||
I am a member of the Bars of the State of New York and the State of New Jersey and the foregoing opinions are limited to the current state of the laws of the State of New York, the General Corporation Law and Limited Liability Company Act of the State of Delaware and Title 10 of the Arizona Revised Statutes and the facts as they currently exist. I assume no obligation to revise or supplement this opinion in the event of future changes in such laws or the interpretations thereof or such facts.
This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon by you for any other purpose or relied upon by any other Person without my prior written consent.
Very truly yours,
EXHIBIT B-2 TO
CREDIT AGREEMENT
FORM OF OPINION OF GIBSON, DUNN & CRUTCHER LLP
See Tab 6
|
|
|
Client: 19806-00014 |
|
|
|
April 2, 2013 |
|
|
|
The Lenders listed on Schedule I hereto |
|
and the Administrative Agent |
|
(as defined below) party to the |
|
Credit Agreement referred to below |
|
(collectively, the “ Lender Parties ”) |
|
c/o JPMorgan Chase Bank, N.A., |
|
as Administrative Agent |
Re: Coty Inc. – Credit Agreement dated as April 2, 2013
Ladies and Gentlemen:
We have acted as special counsel to Coty Inc., a Delaware corporation (the “ Company ”), Coty US LLC, a Delaware limited liability company (“ Coty US ”), Calvin Klein Cosmetic Corporation, a Delaware corporation (“ CKCC ”), O P I Products, Inc., a Delaware corporation (“ OPI Products ”), Philosophy Acquisition Company, Inc., a Delaware corporation (“ Philosophy Acquisition ”) and Philosophy, Inc., an Arizona corporation (“ Philosophy ” and, together with Coty US, CKCC, OPI Products and Philosophy Acquisition, the “ Subsidiary Guarantors ” and, together with the Company, the “ Obligors ”) in connection with that certain Credit Agreement, dated as of April 2, 2013 (the “ Credit Agreement ”), by and among the Company, as borrower, the lenders party thereto (the “ Lenders ”) and JPMorgan Chase Bank, N.A., as administrative agent thereunder (in such capacity, the “ Agent ”) and a Lender. Each capitalized term used and not defined herein has the meaning assigned to that term in the Credit Agreement.
In rendering this opinion, we have examined the originals, or copies, certified or otherwise identified to our satisfaction as being true copies, of the following documents and instruments:
|
|
|
|
|
(i) the Credit Agreement, including the Exhibits and Schedules thereto; |
|
|
|
|
|
(ii) the Notes dated as of April 2, 2013 (the “ Notes ”) made by the Company payable to the Lenders and their registered assigns and delivered to the Lenders on the date hereof; and |
|
|
|
|
|
(iii) the Subsidiary Guarantee dated as of April 2, 2013 (the “ Subsidiary Guarantee ”) by the Subsidiary Guarantors in favor of the Agent. |
|
|
|
The Lender Parties |
|
c/o JPMorgan Chase Bank, N.A. |
|
as Agent |
|
April 2, 2013 |
|
Page 2 |
The Credit Agreement, the Notes and the Subsidiary Guarantee are referred to herein collectively as the “ Financing Documents .”
We have assumed without independent investigation that:
(a) The signatures on all documents examined by us are genuine, all individuals executing such documents had all requisite legal capacity and competency and were duly authorized, the documents submitted to us as originals are authentic and the documents submitted to us as certified or reproduction copies conform to the originals;
(b) Each Obligor is a validly existing corporation or limited liability company, as applicable, in good standing under the laws of its state of formation, has all requisite corporate or limited liability company, as applicable, power to execute and deliver each of the Financing Documents to which it is a party and to perform its obligations thereunder, the execution and delivery of such Financing Documents by such Obligor and performance of its obligations thereunder have been duly authorized by all necessary corporate, limited liability or other action and except as specifically addressed in our opinions in paragraph 2 below, do not violate any law, rule, regulation, order, judgment or decree applicable to such Obligor, and such Financing Documents have been duly executed and delivered by each such Obligor; and
(c) There are no agreements or understandings between or among any of the parties to the Financing Documents or third parties that would expand, modify or otherwise affect the terms of the Financing Documents or the respective rights or obligations of the parties thereunder.
In rendering this opinion, we have made such inquiries and examined, among other things, originals or copies, certified or otherwise identified to our satisfaction, of such records, agreements, certificates, instruments and other documents as we have considered necessary or appropriate for purposes of this opinion. As to certain factual matters, we have relied to the extent we deemed appropriate and without independent investigation upon the representations and warranties of the Obligors in the Financing Documents, a certificate of officers of the Company, a copy of which is attached hereto (the “ Officers’ Certificate ”) or certificates obtained from public officials and others.
Based upon the foregoing and in reliance thereon, and subject to the qualifications,
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exceptions, assumptions and limitations herein contained, we are of the opinion that:
1. Each Financing Document constitutes a legal, valid and binding obligation of each Obligor party thereto enforceable against such Obligor in accordance with its terms.
2. The execution and delivery by each Obligor of the Financing Documents to which it is a party, and performance of its obligations thereunder, do not and will not violate, or require any filing with or approval of any governmental authority or regulatory body of the State of New York or the United States of America under, any law, rule or regulation of the State of New York or the United States of America applicable to such Obligor that, in our experience, is generally applicable to transactions in the nature of those contemplated by the Financing Documents.
3. No Obligor is required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
4. The execution and delivery by each Obligor of the Financing Documents to which it is a party, and the performance of its obligations thereunder, do not result in a breach or violation of Regulation U or X of the Board of Governors of the Federal Reserve System.
The opinions expressed above are subject to the following additional exceptions, qualifications, limitations and assumptions:
A. We render no opinion herein as to matters involving the laws of any jurisdiction other than the State of New York and the United States of America. This opinion is limited to the effect of the current state of the laws of the State of New York, the United States of America and the facts as they currently exist. We assume no obligation to revise or supplement this opinion in the event of future changes in such laws or the interpretations thereof or such facts. Except as expressly set forth in paragraph 3 above, we express no opinion regarding the Securities Act of 1933, as amended, or any other federal or state securities laws, rules or regulations.
B. Our opinions are subject to (i) the effect of any bankruptcy, insolvency, reorganization, moratorium, arrangement or similar laws affecting the rights and remedies of creditors generally (including, without limitation, the effect of statutory or other laws
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regarding fraudulent transfers or preferential transfers) and (ii) general principles of equity, including without limitation concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance, injunctive relief or other equitable remedies regardless of whether enforceability is considered in a proceeding in equity or at law.
C. We express no opinion regarding (a) the effectiveness of (i) any waiver (whether or not stated as such) under the Financing Documents of, or any consent thereunder relating to, unknown future rights or the rights of any party thereto existing, or duties owing to it, as a matter of law; (ii) any waiver (whether or not stated as such) contained in the Financing Documents of rights of any party, or duties owing to it, that is broadly or vaguely stated or does not describe the right or duty purportedly waived with reasonable specificity; (iii) provisions relating to indemnification, exculpation or contribution, to the extent such provisions may be held unenforceable as contrary to public policy or federal or state securities laws or due to the negligence or willful misconduct of the indemnified party; (iv) any provision in any Financing Document waiving the right to object to venue in any court; (v) any agreement to submit to the jurisdiction of any Federal Court; (vi) any waiver of the right to jury trial; (vii) any provision purporting to establish evidentiary standards; (viii) any provision to the effect that every right or remedy is cumulative and may be exercised in addition to any other right or remedy or that the election of some particular remedy does not preclude recourse to one or more others; (ix) (A) any provision that would require payment of any unamortized original issue discount (including any original issue discount effectively created by payment of a fee), or (B) any closing fees, to the extent they are considered to be fees for the “brokerage, soliciting, driving or procuring of a loan” and exceed 0.50% of the amount thereof in violation of New York General Obligations Law Section 5-531; (x) any fraudulent transfer “savings” provision; (xi) any right of setoff to the extent asserted by a participant in the rights of a Lender under the Financing Documents or (b) the effect on the enforceability of any Subsidiary Guarantee or other Financing Documents against any Subsidiary Guarantor or any other “surety” (which could include a co-borrower jointly liable for loans extended to another co-borrower, a hypothecator of property to secure obligations owed by another person or a common creditor that has subordinated obligations owing to it), of any facts or circumstances occurring after the date hereof that would constitute a defense to the obligation of a surety, unless such defense has been waived effectively by such Guarantor or other surety. In addition, we advise you that
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some of the provisions of the Financing Documents may not be enforceable by a Lender acting individually (as opposed to the Lenders acting through the Agent).
D. For purposes of our opinion in paragraph 4, we have assumed without independent investigation that: (i) the representation and warranty of the Company set forth in Section 3.15(b) of the Credit Agreement is and will be true and correct at all relevant times and (ii) less than 25% of the value of the assets of the Company and its Subsidiaries taken as a whole, or of any of the Company and any of its Subsidiaries, individually, subject to the negative covenants of the Credit Agreement consist and will consist of “margin stock” within the meaning of Regulations U or X of the Board of Governors of the Federal Reserve System at all relevant times . We express no opinion with respect to Regulation T of the Board of Governors of the Federal Reserve System.
This opinion is rendered as of the date hereof to the Lender Parties in connection with the Financing Documents and may not be relied upon by any person other than the Lender Parties or by the Lender Parties in any other context. The Lender Parties may not furnish this opinion or copies hereof to any other person except (i) to bank examiners and other regulatory authorities should they so request in connection with their normal examinations, (ii) to the independent auditors and attorneys of the Lender Parties, (iii) pursuant to order or legal process of any court or governmental agency, (iv) in connection with any legal action to which any Lender Party is a party arising out of the transactions contemplated by the Financing Documents, or (v) to any potential permitted assignee of or participant in the interest of any Lender Party under the Financing Documents for its information. This opinion may not be quoted without the prior written consent of this Firm.
Very truly yours,
SCHEDULE I – LENDER PARTIES
JPMorgan Chase Bank, N.A.
Bank of America, N.A.
BNP Paribas
Bank of the West
First Hawaiian Bank
Crédit Agricole Corporate and Investment Bank
Deutsche Bank
AG New York Branch
ING Bank N.V.
The Bank of Tokyo-Mitsubishi UFJ, Ltd
Morgan Stanley Bank, N.A.
Wells Fargo Bank, N.A.
Barclays Bank PLC
Fifth Third Bank
Mizuho Corporate Bank, Ltd
Royal Bank of Canada
The Royal Bank of Scotland plc
U.S. Bank National Association
HSBC Bank USA, National Association
Lloyds TSB Bank plc
Sumitomo Mitsui Banking Corporation
Sovereign Bank N.A.
Compass Bank
DZ Bank AG
Deutsche Zentral -– Genossenschaftsbank New York Branch
Mega International Commercial Bank Co., Ltd New York Branch
Coty Inc.
Officers’ Certificate
The undersigned, Sérgio Pedreiro and Jules Kaufman do hereby certify to Gibson, Dunn & Crutcher LLP (“ Gibson Dunn ”), in their capacities as officers of Coty Inc., a Delaware corporation (the “ Borrower ”), Coty US LLC, a Delaware limited liability company (“ Coty US ”), Calvin Klein Cosmetic Corporation, a Delaware corporation (“ CKCC ”), O P I Products, Inc., a Delaware corporation (“ OPI Products ”), Philosophy Acquisition Company, Inc., a Delaware corporation (“ Philosophy Acquisition ”) and Philosophy, Inc., an Arizona corporation (“ Philosophy ” and, together with Coty US, CKCC, OPI Products and Philosophy Acquisition, the “ Subsidiary Guarantors ” and, together with the Borrower, the “ Companies ”) in connection with that certain Credit Agreement, dated as of April 2, 2013 (the “ Credit Agreement ”), by and among the Company, as borrower, the lenders party thereto (the “ Lenders ”) and JPMorgan Chase Bank, N.A., as administrative agent thereunder (in such capacity, the “ Agent ”) and a Lender, as follows:
1. We are the duly elected and incumbent Chief Financial Officer and General Counsel, respectively, of the Company, are officers of each of the Subsidiary Guarantors and are authorized to execute this Certificate on behalf of the Company and the Subsidiary Guarantors.
2. We recognize and acknowledge that this Certificate is being furnished to Gibson Dunn in connection with their delivery of their legal opinion of even date herewith pursuant to Section 4.01(c)(ii) of the Credit Agreement (the “ GDC Opinion ”). We further understand that Gibson Dunn is relying to a material degree on this Certificate in rendering that opinion. On behalf of the Company and the Subsidiary Guarantors, we hereby authorize such reliance.
3. We have asked such questions regarding the meaning of any of the provisions of this Certificate as we have considered necessary.
4. Prior to the date hereof, the Company and each of the Company Subsidiaries have delivered to Gibson Dunn true and correct copies of the most-current formation documents and by-laws or operating agreements, as applicable, for the Company and each of the Subsidiary Guarantors, including all amendments and restatements, and such documents have not been amended or otherwise modified since the date shown on the face of such documents or the most recent such amendment or restatement.
5. Prior to the date hereof, the Company and each of the Subsidiary Guarantors have delivered to Gibson Dunn copies of all resolutions and other similar action passed by the respective board of directors or board of managers, as applicable, of the Company and each of the Subsidiary Guarantors relating to the transactions contemplated by the Credit Agreement. None of the Company and the Company Subsidiaries that are limited liability companies have been dissolved by a vote of its members.
6. To the best of our knowledge, each of the Company and the Subsidiary Guarantors is engaged, directly or through a wholly-owned subsidiary or subsidiaries, in the business of fragrance, color cosmetics and skin and body care (the “ Principal Business ”) and does not hold itself out as being engaged in any other business. All subsidiaries of the Company or any Subsidiary Guarantor that are not wholly-owned are immaterial, and neither the Company nor any Subsidiary Guarantor owns any significant amount of securities or other financial assets, other than demand deposits, U.S. money market funds and stock of wholly-owned subsidiaries engaged in the Principal Business. As used in the preceding sentence, a “wholly-owned subsidiary” of the Company or a Subsidiary Guarantor is a company of which at least 95% of the securities entitled to vote in the election of directors are held by the Company or such Subsidiary Guarantor or by a wholly-owned subsidiary of the Company or such Subsidiary Guarantor or if such company does not have a board of directors, the sole power to otherwise direct or cause the direction of the management and policies of such company is possessed by the Company or such Subsidiary Guarantor or a wholly-owned subsidiary of the Company or such Subsidiary Guarantor.
7. To the best of our knowledge, each and all of the representations and warranties as to factual matters relating to the Company and the Subsidiary Guarantors contained in the Financing Documents are true and correct in all material respects as of the date of such agreement and as of the date hereof.
8. To the best of our knowledge, less than 25% of the value of the assets of the Company and the Company Subsidiaries, taken as a whole, or of any of the Company and any of the Company Subsidiaries, individually subject to the negative covenants of the Credit Agreement consist of “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System. None of the proceeds of the loans and other extensions of credit made under the Credit Agreement will be used, directly or indirectly, to make loans to any person that will be secured by margin stock or will have the benefit of any arrangement restricting the disposition or pledge of margin stock.
9. To the best of our knowledge, there are no agreements or understandings between or among the Agent, the Lenders, the Company, the Subsidiary Guarantors or third parties that would expand, modify or otherwise affect the terms of the Financing Documents referred to in the GDC Opinion or the respective rights or obligations of the parties thereunder.
Capitalized terms used herein and not defined herein have the meanings given to such terms in the Credit Agreement. This Certificate may be executed in two or more counterparts. A copy of this Certificate executed and delivered by facsimile or email transmission shall be valid for all purposes.
IN WITNESS WHEREOF, the undersigned have executed this Certificate as of April 2, 2013.
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Name: Sérgio Pedreiro |
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Title: Chief Financial Officer |
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Name: Jules Kaufman |
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Title: General Counsel |
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EXHIBIT C TO
CREDIT AGREEMENT
[FORM OF] SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE, dated as of ______________ (this “ Guarantee ”), made by _______________________, a ________________________ (the “ Guarantor ” together with the other Guarantors referred to in the Credit Agreement, the “ Guarantors ”), in favor of JPMORGAN CHASE BANK, N.A. as administrative agent (in such capacity, the “ Administrative Agent ”) under the Credit Agreement, dated as of April 2, 2013 (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among COTY INC. (the “ Borrower ”), the agents named therein, the Administrative Agent and the Lenders (as defined in the Credit Agreement).
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make Loans and other extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of corporations that includes the Guarantors;
WHEREAS, the proceeds of the Loans and other extensions of credit will be used in part to enable the Borrower to make valuable transfers to the Guarantors in connection with the operation of their businesses;
WHEREAS, the Guarantors and the Borrower are engaged in related businesses, and the Guarantors will derive substantial direct and indirect benefit from the making of the Loans and other extensions of credit; and
WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective Loans and other extensions of credit to the Borrower under the Credit Agreement that the Guarantors and the other Subsidiary Guarantors referred to in the Credit Agreement shall have executed and delivered to the Administrative Agent, for the ratable benefit of the Lenders, a guarantee agreement (each, including this Guarantee, a “ Subsidiary Guarantee ”).
NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective Loans and other extensions of credit to the Borrower under the Credit Agreement, the Guarantors hereby agree with the Administrative Agent, for the ratable benefit of the Lenders, as follows:
1. Defined Terms . (a) Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
(b) As used herein, “ Obligations ” means the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations and all other obligations and liabilities of the Borrower to the Administrative Agent or the Lenders (including, without limitation, interest accruing at the then applicable rate provided in the Credit Agreement after the maturity of the Loans or Reimbursement Obligations and interest accruing at the then applicable rate provided in the Credit
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Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter incurred, which may arise under, out of, or in connection with, the Credit Agreement, the other Loan Documents or any other document made, delivered or given in connection therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Administrative Agent or to the Lenders that are required to be paid by the Borrower, the Guarantors, or any other Subsidiary Guarantor pursuant to the terms of the Credit Agreement, this Guarantee, any other Subsidiary Guarantee or any other Loan Document).
(c) As used herein, “ Commodity Exchange Act ” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
(d) As used herein, “ Excluded Swap Obligation ” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure to constitute an “eligible contract participant,” as defined in the Commodity Exchange Act and the regulations thereunder, at the time the guarantee (or grant of such security interest by, as applicable) of such Guarantor becomes or would become effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one Swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Swaps for which such guarantee or security interest is or becomes illegal.
(e) As used herein, “ Qualified ECP Guarantor ” means, in respect of any Swap Obligation, each Loan Party that, at the time the relevant guarantee (or grant of security interest, as applicable) becomes or would become effective with respect to such Swap Obligation, has total assets exceeding $10,000,000 or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” with respect to such Swap Obligation at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
(f) As used herein, “ Swap ” means, with respect to any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
(g) As used herein, “ Swap Obligation ” means, with respect to any person, any obligation to pay or perform under any Swap.
(h) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Guarantee shall refer to this Guarantee as a whole and not to any particular provision of this Guarantee, and section and paragraph references are to this Guarantee unless otherwise specified.
(i) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.
2. Guarantee (a) Subject to the provisions of paragraph (b), each Guarantor hereby unconditionally and irrevocably guarantees to the Administrative Agent, for the ratable benefit of the Lenders and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower when due (whether at the stated maturity, by acceleration or
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otherwise) of the Obligations (excluding, with respect to any Guarantor, any Excluded Swap Obligations of such Guarantor).
(b) Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable laws relating to the insolvency of debtors.
(c) Each Guarantor further agrees to pay any and all expenses (including, without limitation, all fees and disbursements of counsel) which may be paid or incurred by the Administrative Agent or any Lender in enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of the Obligations and/or enforcing any rights with respect to, or collecting against, such Guarantor under this Guarantee. This Guarantee shall remain in full force and effect until the Obligations are paid in full and the Commitments are terminated, notwithstanding that from time to time prior thereto the Borrower may be free from any Obligations.
(d) Each Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing this Guarantee or affecting the rights and remedies of the Administrative Agent or any Lender hereunder.
(e) No payment or payments made by the Borrower, any Guarantor, any other guarantor or any other Person or received or collected by the Administrative Agent or any Lender from the Borrower, any Guarantor, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder, which shall, notwithstanding any such payment or payments other than payments made by such Guarantor in respect of the Obligations or payments received or collected from such Guarantor in respect of the Obligations, remain liable for the Obligations up to the maximum liability of such Guarantor hereunder until the Obligations are paid in full and the Commitments are terminated.
(f) Each Guarantor agrees that whenever, at any time, or from time to time, it shall make any payment to the Administrative Agent or any Lender on account of its liability hereunder, it will notify the Administrative Agent in writing that such payment is made under this Guarantee for such purpose.
(g) Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under this Guarantee in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 2 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 2, or otherwise under this Guarantee, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section 2 shall remain in full force and effect until the Obligations are paid in full and the Commitments are terminated, notwithstanding that from time to time prior thereto the Borrower may be free from any Obligations. Each Qualified ECP Guarantor intends that this Section 2 constitute, and this Section 2 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
3. Right of Contribution . Each Guarantor hereby agrees that, to the extent that any Subsidiary Guarantor shall have paid more than its proportionate share of any payments made in respect of the Subsidiary Guarantees, such Subsidiary Guarantor shall be entitled to seek and receive contribution
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from and against the Guarantors hereunder. Each Subsidiary Guarantor’s right of contribution shall be subject to the terms and conditions of Section 5 hereof. The provisions of this Section shall in no respect limit the obligations and liabilities of any Subsidiary Guarantor to the Administrative Agent and the Lenders, and each Subsidiary Guarantor shall remain liable to the Administrative Agent and the Lenders for the full amount guaranteed by such Subsidiary Guarantor under its Subsidiary Guarantee.
4. Right of Set-off . Each Guarantor hereby irrevocably authorizes the Administrative Agent and each Lender at any time and from time to time without notice to any Guarantor or any other guarantor, any such notice being expressly waived by each Guarantor, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Administrative Agent or such Lender to or for the credit or the account of such Guarantor, or any part thereof in such amounts as the Administrative Agent or such Lender may elect, against and on account of the obligations and liabilities of such Guarantor to the Administrative Agent or such Lender hereunder and claims of every nature and description of the Administrative Agent or such Lender against such Guarantor, in any currency, whether arising hereunder, under the Credit Agreement, any Loan Documents or otherwise, as the Administrative Agent or such Lender may elect, whether or not the Administrative Agent or any Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. The Administrative Agent and each Lender shall notify such Guarantor promptly of any such set-off and the application made by the Administrative Agent or such Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Administrative Agent and each Lender under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Administrative Agent or such Lender may have.
5. No Subrogation . Notwithstanding any payment or payments made by any of the Subsidiary Guarantors under any Subsidiary Guarantee or any set-off or application of funds of any of the Subsidiary Guarantors by any Lender, the Guarantors shall not be entitled to be subrogated to any of the rights of the Administrative Agent or any Lender against the Borrower or any Subsidiary Guarantor or other guarantor or any collateral security or guarantee or right of offset held by the Administrative Agent or any Lender for the payment of the Obligations, nor shall the Guarantors seek or be entitled to seek any contribution or reimbursement from the Borrower or any Subsidiary Guarantor or other guarantor in respect of payments made by any Guarantor hereunder, until all amounts owing to the Administrative Agent and the Lenders by the Borrower on account of the Obligations are paid in full and the Commitments are terminated. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full or the Commitments shall not have been terminated, such amount shall be held by such Guarantor in trust for the Administrative Agent and the Lenders, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be applied against the Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.
6. Amendments, etc. with respect to the Obligations; Waiver of Rights . The Guarantors shall remain obligated hereunder notwithstanding that, without any reservation of rights against the Guarantors and without notice to or further assent by the Guarantors, any demand for payment of any of the Obligations made by the Administrative Agent or any Lender may be rescinded by such party and any of the Obligations continued, and the Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised,
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waived, surrendered or released by the Administrative Agent or any Lender, and the Credit Agreement, and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Administrative Agent or any Lender for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. Neither the Administrative Agent nor any Lender shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Obligations or for this Guarantee or any property subject thereto. When making any demand hereunder against any Guarantor, the Administrative Agent or any Lender may, but shall be under no obligation to, make a similar demand on the Borrower or any other Subsidiary Guarantor or other guarantor, and any failure by the Administrative Agent or any Lender to make any such demand or to collect any payments from the Borrower or other Subsidiary Guarantor or other guarantor or any release of the Borrower or other Guarantor or other guarantor shall not relieve the Guarantors of their obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of the Administrative Agent or any Lender against the Guarantors. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.
7. Guarantee Absolute and Unconditional . The Guarantors waive any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by the Administrative Agent or any Lender upon this Guarantee or acceptance of this Guarantee, the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Guarantee; and all dealings between the Borrower and any of the Guarantors, on the one hand, and the Administrative Agent and the Lenders, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Guarantee. The Guarantors waive diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower or any of the other Subsidiary Guarantors or other guarantors with respect to the Obligations. The Guarantors understand and agree that this Guarantee shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity, regularity or enforceability of the Credit Agreement, or any other Loan Document, any of the Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any Lender (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower against the Administrative Agent or any Lender, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower, any Subsidiary Guarantor or other guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for the Obligations, of any Subsidiary Guarantor under its Subsidiary Guarantee, or of any other guarantor, in bankruptcy or in any other instance. When pursuing its rights and remedies hereunder against the Guarantors, the Administrative Agent and any Lender may, but shall be under no obligation to, pursue such rights and remedies as it may have against the Borrower, any other Subsidiary Guarantor, any other guarantor or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by the Administrative Agent or any Lender to pursue such other rights or remedies or to collect any payments from the Borrower, other Subsidiary Guarantor or other guarantor or other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Borrower, other Subsidiary Guarantor or other guarantor or other Person or any such collateral security, guarantee or right of offset, shall not relieve the Guarantors of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Administrative Agent and the Lenders against the Guarantors. This Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Guarantors and the respective successors and assigns thereof, and shall inure to the benefit of the Administrative Agent and the Lenders,
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and their respective successors, indorsees, transferees and assigns, until all the Obligations and the obligations of the Guarantors under this Guarantee shall have been satisfied by payment in full and the Commitments shall be terminated, notwithstanding that from time to time during the term of the Credit Agreement the Borrower may be free from any Obligations.
8. Reinstatement . This Guarantee shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any Lender upon the insolvency, bankruptcy, administration, dissolution, liquidation or reorganization of the Borrower or any Subsidiary Guarantor or other guarantor, or upon or as a result of the appointment of a receiver, administrative receiver, administrator, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Subsidiary Guarantor or other guarantor or any substantial part of the property of the Borrower, Subsidiary Guarantor or other guarantor, or otherwise, all as though such payments had not been made.
9. Payments . The Guarantors hereby guarantee that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in the relevant currency at the Administrative Office specified by the Administrative Agent.
10. Representations and Warranties . Each Guarantor hereby represents and warrants that each of the representations and warranties made in Article III of the Credit Agreement is true and correct. Each Guarantor agrees that the foregoing representations and warranties shall be deemed to have been made by such Guarantor on the date of each borrowing by the Borrower under the Credit Agreement on and as of such date of borrowing as though made hereunder on and as of such date.
11. [Intentionally Omitted]
12. Authority of Administrative Agent . The Guarantors acknowledge that the rights and responsibilities of the Administrative Agent under this Guarantee with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Guarantee shall, as between the Administrative Agent and the Lenders, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Administrative Agent and the Guarantors, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so to act or refrain from acting, and the Guarantors shall not be under any obligation, or entitlement, to make any inquiry respecting such authority.
13. Notices . All notices, requests and demands to or upon the Administrative Agent, any Lender or the Guarantors to be effective shall be in writing (or by telex, fax or similar electronic transfer confirmed in writing) and shall be deemed to have been duly given or made when delivered by hand or if given by mail, when deposited in the mails by certified mail, return receipt requested, or if by telex, fax or similar electronic transfer, when sent and receipt has been confirmed, addressed as follows:
(b) if to the Administrative Agent or any Lender, at its address or transmission number for notices provided in Section 9.01 of the Credit Agreement; and
(c) if to a Guarantor, at its address or transmission number for notices set forth under its signature below.
The Administrative Agent, each Lender and each Guarantor may change its address and transmission numbers for notices by notice in the manner provided in this Section.
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14. Severability . Any provision of this Guarantee which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
15. Integration . This Guarantee represents the agreement of the Guarantors with respect to the subject matter hereof and there are no promises or representations by the Administrative Agent or any Lender relative to the subject matter hereof not reflected herein.
16. Amendments in Writing; No Waiver; Cumulative Remedies . (a) None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified except by a written instrument executed in accordance with Section 9.02 of the Credit Agreement.
(b) Neither the Administrative Agent nor any Lender shall by any act (except by a written instrument pursuant to paragraph 16(a) hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of the Administrative Agent or any Lender, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Administrative Agent or any Lender of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent or such Lender would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.
17. Section Headings . The section headings used in this Guarantee are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.
18. Successors and Assigns . This Guarantee shall be binding upon each Guarantor’s successors and assigns and shall inure to the benefit of the Administrative Agent and the Lenders and their successors and assigns.
19. Governing Law; Jurisdiction; Consent to Service of Process . (a) This Guarantee shall be construed in accordance with and governed by the law of the State of New York.
(b) Each Guarantor hereby irrevocably and unconditionally submits, for itself and its Property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Guarantee, or for recognition or enforcement of any judgment, and each Guarantor hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each Guarantor agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions, to the extent permitted by law, by suit on the judgment or in any other manner provided by law. Nothing in this Guarantee or any other Loan Document shall affect any right that the Administrative Agent, or any Lender may otherwise have to bring any action or proceeding relating to this Guarantee against any Guarantor or its properties in the courts of any jurisdiction.
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(c) Each Guarantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Guarantee in any court referred to in clause (b) of this Section. Each Guarantor hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d) Each Guarantor agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to CT Corporation System Inc. at its address at 1633 Broadway, New York, New York 10019, or to the Guarantor at the address set forth underneath its signature hereinbelow and agrees that nothing herein shall affect the right of the Administrative Agent or any Lender to effect service of process in any other manner permitted by law.
20. (a) Each Guarantor’s obligations hereunder to make payments in a specified currency (the “ Obligation Currency ”) shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than the Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by the Administrative Agent or a Lender of the full amount of the Obligation Currency expressed to be payable to the Administrative Agent or such Lender under this Guarantee. If, for the purpose of obtaining or enforcing judgment against any Guarantor in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other than the Obligation Currency (such other currency being hereinafter referred to as the “ Judgment Currency ”) an amount due in the Obligation Currency, the conversion shall be made, at the rate of exchange (as quoted by the Administrative Agent or if the Administrative Agent does not quote a rate of exchange on such currency, by a known dealer in such currency designated by the Administrative Agent) determined, in each case, as of the Business Day immediately preceding the date on which the judgment is given (such Business Day being hereinafter referred to as the “ Judgment Currency Conversion Date ”).
(b) If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of the amount due, each Guarantor covenants and agrees to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount), as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the rate of exchange prevailing on the Judgment Currency Conversion Date.
(c) For purposes of determining any rate of exchange or currency equivalent for this Section, such amounts shall include any premium and costs payable in connection with the purchase of the Obligation Currency.
21. WAIVER OF JURY TRIAL . EACH GUARANTOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTEE, (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH GUARANTOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT THE PARTIES TO THE CREDIT AGREEMENT HAVE BEEN INDUCED TO ENTER INTO THE CREDIT AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION.
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly executed and delivered by its duly authorized officer as of the day and year first above written.
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EXHIBIT D TO
CREDIT AGREEMENT
[FORM OF] AFFILIATE SUBORDINATED NOTE
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[AMOUNT] |
New York, New York |
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[DATE] |
___________________, a ___________________ (the “ Obligor ”), hereby promises to pay to the order of ___________________, a ___________________ on [INSERT DATE NO EARLIER THAN ONE YEAR AFTER FINAL MATURITY OF FACILITIES AT TIME OF ISSUANCE OF AFFILIATE SUBORDINATED NOTE] the principal amount of [AMOUNT IN WORDS] ([AMOUNT IN NUMBERS]) in lawful money of [COUNTRY]. Terms defined in the Credit Agreement referred to below are used herein with the meanings set forth in such Credit Agreement unless otherwise defined herein.
Interest on the principal amount hereof at a rate per annum equal to [IF RATE DOES NOT EXCEED [LIBOR (as defined below) plus the Applicable Rate plus 1/2 %] OR THE FIXED RATE EQUIVALENT AT THE TIME OF ISSUANCE, THE RATE MAY BE SET WITHOUT ADMINISTRATIVE AGENT CONSENT, WHICH MUST OTHERWISE BE OBTAINED], shall be payable quarterly in arrears in cash on the fifth day after the end of each of the fiscal quarters of each fiscal year of the Obligor (or, if any such day is not a Business Day, the next succeeding Business Day), beginning on _______________. The Obligor and the Payee may agree that all or a portion of such interest shall not be paid in cash and shall instead be added to the principal amount of this Affiliate Subordinated Note.
The Obligor agrees (a) to notify the Payee promptly in writing of each incurrence of Indebtedness (other than Indebtedness under the Credit Agreement) by the Obligor or any of its Subsidiaries in a principal amount in excess of US$100,000,000 (or the equivalent in any other currency), and (b) not to incur Indebtedness (other than (x) indebtedness permitted pursuant to Section 6.2 of the Credit Agreement and (y) Indebtedness of the Borrower and its Subsidiaries not otherwise permitted pursuant to Section 6.2 of the Credit Agreement in an aggregate principal amount not exceeding $50,000,000 at any one time) without the consent of the Payee.
Notwithstanding anything to the contrary herein, no payment or prepayment of principal of or interest on this Affiliate Subordinated Note may be made, directly or indirectly, if (a) a Default or Event of Default shall have occurred and be continuing or would result therefrom or (b) at any time, any Person that is not a Permitted Holder (as defined below) at such time shall be a holder of all or any portion of the obligations of the Borrower evidenced hereby. Subject to the preceding sentence, (a) payments of principal of and interest on this Affiliate Subordinated Note shall be made in immediately available funds to such account of the Payee as the Payee may designate in writing and (b) the Obligor may prepay all or any Part of this Affiliate Subordinated Note, together with accrued interest on the amount prepaid, to the extent permitted by the Credit Agreement. If any payment hereunder becomes due and payable on a day other than a business day, the due date thereof shall be extended to the next succeeding business day.
The Subordinated Indebtedness (as defined below) evidenced hereby is subordinate and junior in right of payment to all the Senior Indebtedness (as defined below) to the extent and in the manner provided herein.
As used herein, the following tams shall have the following meanings:
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“ Administrative Agent ” shall men the “Administrative Agent” referred to in the Credit Agreement.
“ Credit Agreement ” shall mean the Credit Agreement, dated as of April 2, 2013 (as amended, supplemented or otherwise modified from time to time), among the Borrower, the Lenders, agents parties thereto, and JPMorgan Chase Bank, N.A, as Administrative Agent; provided that in the case of clause (b) of the third paragraph of this Affiliate Subordinated Note, “Credit Agreement” shall mean such Credit Agreement as amended only through the date of this Affiliate Subordinated Note.
[“ LIBOR ” shall mean, during any fiscal quarter of the Obligor, the British Bankers Association LIBOR Rate from the relevant page of the Reuters screen, as published by Reuters (or any successor or substitute page of Reuters, or any successor to or substitute for Reuters for purposes of providing rate quotations of interest rates comparable to those currently provided on such page of Reuters, as determined by the Obligor) at approximately 11.00 a.m., London time, on the business day immediately preceding the last business day of the immediately preceding fiscal quarter of the Obligor, as the rate for deposits in with a maturity of three months.]
“ Permitted Holders ” shall mean any Person Controlled by one or more members of the Owner Group.
“ Senior Creditors ” shall mean the collective reference to the Lenders and the Administrative Agent.
“ Senior Indebtedness ” shall mean (a) the principal amount of all loans and guarantee obligations from time to time outstanding or owing under the Credit Agreement and the other Loan Documents executed and delivered by the Obligor pursuant thereto, together with interest thereon (including, without limitation, any interest subsequent to the filing by or against the Obligor of any bankruptcy, reorganization or similar proceeding, whether or not such interest would constitute an allowed claim in any such proceeding, calculated at the rate set forth for overdue loans in the Credit Agreement) and all fees and expenses owing under the Credit Agreement and the other Loan Documents and (b) all other obligations of the Obligor to the Senior Creditors under the Credit Agreement and the other Loan Documents.
“ Subordinated Indebtedness ” shall mean the principal amount of this Affiliate Subordinated Note from time to time outstanding and unpaid, together with accrued and unpaid interest thereon and any fees, expenses or other amounts of any kind whatsoever from time to time owing hereunder.
Payment of the Subordinated Indebtedness is and shall be expressly subordinate and junior in right of payment to the prior payment in full in cash of the Senior Indebtedness to the extent and in the manner set forth herein, and the Subordinated Indebtedness is hereby so subordinated as a claim against the Obligor or any of the assets of the Obligor, whether such claim be (i) in the event of any distribution of the assets of the Obligor upon any voluntary or involuntary dissolution, winding-up, total or partial liquidation or reorganization, or bankruptcy, insolvency, receivership or other statutory or common law proceedings or arrangements involving the Obligor or the readjustment of its liabilities or any assignment for the benefit of creditors or any marshalling of its assets or liabilities (collectively called a “ Reorganization ”), or (ii) other than in connection with a Reorganization, to the prior payment in full in cash of the Senior Indebtedness.
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If the holder hereof shall receive any payment in violation of the terms hereof it shall hold such payment in trust for the benefit of the Senior Creditors and forthwith pay it over to the Administrative Agent, ratably according the respective amounts of Senior Indebtedness outstanding or owing under the Credit Agreement and the other Loan Documents, for application to and payment of the Senior Indebtedness.
In the event of any Reorganization relative to the Obligor or its properties, then all of the Senior Indebtedness shall first be paid in full in cash before any payment is made upon the Subordinated Indebtedness, and in any such proceedings any payment or distribution of any kind or character, whether in cash or property or securities, which may be payable or deliverable in respect of this Affiliate Subordinated Note shall be paid or delivered directly to the Administrative Agent, for application in payment of the Senior Indebtedness, unless and until all such Senior Indebtedness is paid in full in cash, and the holder hereof hereby irrevocably authorizes the Administrative Agent, as attorney-in-fact for such holder, to prove any claiming such proceedings on the Subordinated Indebtedness, and to demand, sue for, collect and receive any such payment or distribution, and to apply such payment or distribution to the payment of the then unpaid Senior Indebtedness, and to take such other action (including acceptance or rejection of any plan of Reorganization) in the name of such holder or of the relevant Senior Creditors as the Administrative Agent may deem necessary or advisable for the enforcement of the provisions hereof The holder hereof shall execute and deliver such other and further powers of attorney, assignments, proofs of claim or other instruments as may be requested by the Administrative Agent in order to accomplish the foregoing, but only with respect to such holder’s capacity as a holder hereof and not in respect of any other relationship between such holder and the Obligor.
In the event that, notwithstanding the foregoing, upon, any such Reorganization, any payment or distribution of the assets of the Obligor of any kind or character, whether in cash, property or securities, shall be received by the holder hereof in respect of this Affiliate Subordinated Note before all Senior Indebtedness is paid in full in cash, such payment or distribution shall be held in trust for the Senior Creditors and shall forthwith be paid over to the Administrative Agent for application to the payment of all Senior Indebtedness remaining unpaid until all such Senior Indebtedness shall have been paid in full in cash, after giving effect to any concurrent payment or distribution to the Administrative Agent.
The holder hereof agrees that, until the Senior Indebtedness has been paid in full in cash, (a) if a Default or Event of Default shall have occurred and be continuing or would result therefrom, or if a Reorganization shall have commenced, it will not take, demand or receive, or take any action to accelerate or collect, any payment of all or any part of the Subordinated Indebtedness and (b) it will not file, join in or facilitate any petition or proceeding seeking the involuntary bankruptcy of the Obligor.
The Senior Creditors, or any of them, may, at any time and from time to time, without the consent of or notice to the holder of this Affiliate Subordinated Note, without incurring any responsibility to such holder, and without impairing or releasing any of the rights of any of the Senior Creditors, or any of the obligations of such holder:
(a) change the amount or terms of or renew or extend any Senior Indebtedness or amend the Credit Agreement or the other Loan Documents, as the can may be, in any manner or enter into or amend in any manner any other agreement relating to any Senior Indebtedness ;
(b) release anyone liable in any manner for the payment or collection of any Senior Indebtedness; and
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(c) exercise or refrain from exercising any rights against the Obligor and others (including the holder hereof).
The holder of this Affiliate Subordinated Note hereby waives notice of or proof of reliance by any Senior Creditor upon the provisions hereof and the Senior Indebtedness shall conclusively be deemed to have been created, contracted, incurred or maintained in reliance upon the provisions hereof.
The Obligor hereby waives diligence, presentment, demand, protest and notice of any kind whatsoever. The nonexercise by the holder of this Affiliate Subordinated Note of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.
The subordination provisions contained herein are for the benefit of the Senior Creditors and their respective successors and assigns and may not be rescinded or cancelled or modified in anyway without the prior written consent of the Administrative Agent.
Each of the Payee and the Obligor confirms that this Affiliate Subordinated Note constitutes the entire contract among the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.
Neither this Affiliate Subordinated Note nor any interest therein shall be transferred or assigned without the prior written consent of the Administrative Agent, provided that any such transfer or assignment to a Permitted Holder shall be permitted without such consent so long as the transferee or assignee acknowledges, in a written notice to the Administrative Agent, that it is subject to the subordination provisions contained herein.
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THIS AFFILIATE SUBORDINATED NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
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Acknowledged and Agreed: |
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[NAME OF HOLDER] |
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EXHIBIT E-1 TO
CREDIT AGREEMENT
FORM OF
U.S. TAX CERTIFICATE
(For Non-U.S. Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement dated as of April 2, 2013 (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among COTY INC., a Delaware corporation (the “ Borrower ”), JPMORGAN CHASE BANK, N.A., as administrative agent, and each Lender from time to time party thereto.
Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (v) no payments in connection with any Loan Document are effectively connected with the undersigned’s conduct of a U.S. trade or business.
The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
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[NAME OF LENDER] |
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EXHIBIT E-2 TO
CREDIT AGREEMENT
FORM OF
U.S. TAX
CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement dated as of April 2, 2013 (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among COTY INC., a Delaware corporation (the “ Borrower ”), JPMORGAN CHASE BANK, N.A., as administrative agent, and each Lender from time to time party thereto.
Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (v) no payments in connection with any Loan Document are effectively connected with the undersigned’s conduct of a U.S. trade or business.
The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
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[NAME OF PARTICIPANT] |
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EXHIBIT E-3 TO
CREDIT AGREEMENT
FORM OF
U.S. TAX
CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement dated as of April 2, 2013 (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among COTY INC., a Delaware corporation (the “ Borrower ”), JPMORGAN CHASE BANK, N.A., as administrative agent, and each Lender from time to time party thereto.
Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect to such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) no payments in connection with any Loan Document are effectively connected with the undersigned’s or its direct or indirect partners/members’ conduct of a U.S. trade or business.
The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
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[NAME OF PARTICIPANT] |
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EXHIBIT E-4 TO
CREDIT AGREEMENT
FORM OF
U.S. TAX
CERTIFICATE
(For Non-U.S. Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement dated as of April 2, 2013 (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among COTY INC., a Delaware corporation (the “ Borrower ”), JPMORGAN CHASE BANK, N.A., as administrative agent, and each Lender from time to time party thereto.
Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) no payments in connection with any Loan Document are effectively connected with the undersigned’s or its direct or indirect partners/members’ conduct of a U.S. trade or business.
The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
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[NAME OF LENDER] |
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Exhibit 10.2
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
between
COTY INC.,
DONATA HOLDINGS BV,
DONATA HOLDING SE,
THE BERKSHIRE FUND STOCKHOLDERS, and
THE WB FUND STOCKHOLDERS
Dated as of January 25, 2011
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TABLE OF CONTENTS
| Page | ||||||
| ARTICLE I DEFINITIONS | 1 | |||||
| Section 1.1 | Certain Defined Terms | 1 | ||||
| Section 1.2 | Table of Definitions | 3 | ||||
| ARTICLE II REGISTRATION RIGHTS | 5 | |||||
| Section 2.1 | Demand Registration | 5 | ||||
| Section 2.2 | Company Registration | 7 | ||||
| Section 2.3 | Underwriting Requirements | 7 | ||||
| Section 2.4 | Holdback Agreements | 9 | ||||
| Section 2.5 | Obligations of the Company | 9 | ||||
| Section 2.6 | Furnish Information | 12 | ||||
| Section 2.7 | Expenses of Registration | 12 | ||||
| Section 2.8 | Delay of Registration | 13 | ||||
| Section 2.9 | Indemnification | 13 | ||||
| Section 2.10 | Reports Under Exchange Act | 15 | ||||
| Section 2.11 | Limitations on Subsequent Registration Rights | 16 | ||||
| Section 2.12 | Termination of Registration Rights | 16 | ||||
| Section 2.13 | Other Issues of Registrable Securities | 16 | ||||
| ARTICLE III MISCELLANEOUS | 16 | |||||
| Section 3.1 | Successors, Assignees and Transferees | 16 | ||||
| Section 3.2 | Notices | 16 | ||||
| Section 3.3 | Entire Agreement | 18 | ||||
| Section 3.4 | Delays or Omissions | 18 | ||||
| Section 3.5 | Governing Law; Jurisdiction | 19 | ||||
| Section 3.6 | Submission to Jurisdiction | 19 | ||||
| Section 3.7 | Waiver of Jury Trial | 19 | ||||
| Section 3.8 | Severability | 19 | ||||
| Section 3.9 | Enforcement | 19 | ||||
| Section 3.10 | Titles and Subtitles | 20 | ||||
| Section 3.11 | Counterparts; Facsimile Signatures | 20 | ||||
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of January 25, 2011 (this “ Agreement ”), between Coty Inc., a Delaware corporation (the “ Company ”), Donata Holdings BV, a Dutch company (“ Holdings ”), Donata Holding SE, a German company (the “ Parent ”), the Fund Stockholders listed on Exhibit A attached hereto (the “ Fund Stockholders ”) and any Person who becomes a party hereto pursuant to Section 3.1 (each of Parent, Holdings, the Fund Stockholders and any such Persons are referred to as an “ Investor ,” and collectively the “ Investors ”).
RECITALS
WHEREAS , the Company and certain of the Investors on the date hereof are parties to the Stock Purchase Agreement; and
WHEREAS , the parties hereto wish to set forth certain rights and obligations with respect to the registration of the shares of Common Stock under the Securities Act.
AGREEMENT
In consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms . For purposes of this Agreement:
“ Berkshire Fund Group ” means all of the Berkshire Fund Members.
“ Berkshire Fund Members ” means the Berkshire Fund Stockholders and their transferees pursuant to Section 3.
“ Berkshire Fund Stockholders ” means the Berkshire Fund Stockholders listed as such on Exhibit A hereto.
“ Business Day ” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in The City of New York.
“ Common Stock ” means the common stock, par value $0.01 per share, of the Company and any securities issued in respect thereof, or in substitution therefor, in connection with any stock split, dividend or combination, or any reclassification, recapitalization, merger, consolidation, exchange or other similar reorganization.
“ Damages ” means any loss, damage, or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, or liability (or any action in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material
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fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; or (ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading.
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“ Excluded Registration ” means (i) a registration relating to the sale of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan; (ii) a registration relating to an SEC Rule 145 or other acquisition transaction; or (iii) registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered.
“ Form S-1 ” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.
“ Form S-3 ” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with the SEC.
“ Fund Group ” means the Berkshire Fund Group and the WB Fund Group.
“ Fund Members ” means Berkshire Fund Members and the WB Fund Members.
“ Fund Stockholders ” means the Berkshire Fund Stockholders and the WB Fund Stockholders.
“ Holder ” means each of the Initial Investors and any of their transferees who shall acquire and hold shares of Common Stock in accordance with the terms of this Agreement.
“ Initial Investors ” means the Persons party to the Stockholders Agreement.
“ Initiating Holders ” means, collectively, Holders who request registration pursuant to Section 2.1(a) or are deemed to request registration pursuant to Section 2.1(a), pursuant to Section 2.1(b).
“ IPO ” means the Company’s first underwritten public offering of its Common Stock under the Securities Act.
“ Person ” means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivisions thereof.
“ Registrable Securities ” means any shares of Common Stock held by a Holder. As to any particular Registrable Securities, once issued, such securities shall cease to be
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Registrable Securities when ( i ) they are sold pursuant to an effective registration statement under the Securities Act, ( ii ) they are sold pursuant to Rule 144 (or any similar provision then in force under the Securities Act) or ( iii ) they shall have ceased to be outstanding. No Registrable Securities may be registered under more than one Registration Statement at any one time.
“ Registrable Securities then outstanding ” means the number of shares determined by adding the number of shares of outstanding Common Stock that are Registrable Securities and the number of shares of Common Stock issuable (directly or indirectly) pursuant to then exercisable and/or convertible securities that are Registrable Securities.
“ SEC ” means the Securities and Exchange Commission.
“ SEC Rule 144 ” means Rule 144 promulgated by the SEC under the Securities Act.
“ SEC Rule 145 ” means Rule 145 promulgated by the SEC under the Securities Act.
“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“ Selling Expenses ” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Section 2.7.
“ Stock Purchase Agreement ” means the Stock Purchase Agreement, dated as of December 23, 2010, between the Company, Parent, Holdings and the Fund Stockholders.
“ Stockholders Agreement ” means the Stockholders Agreement, dated as of January 25, 2011, between the Company, Parent, Holdings and the Fund Stockholders.
“ WB Fund Group ” means all of the WB Fund Members.
“ WB Fund Members ” means the WB Fund Stockholders and their transferees pursuant to Section 3.
“ WB Fund Stockholders ” means the WB Fund Stockholders listed as such on Exhibit A hereto.
Section 1.2 Table of Definitions . The following terms have the meanings set forth in the Sections referenced below:
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| Definition | Location |
| Agreement | Preamble |
| Berkshire Fund Group | 1.1 |
| Berkshire Fund Members | 1.1 |
| Berkshire Fund Stockholders | 1.1 |
| Business Day | 1.1 |
| Common Stock | 1.1 |
| Company | Preamble |
| Damages | 1.1 |
| Demand Notice | 2.1(a) |
| Exchange Act | 1.1 |
| Excluded Registration | 1.1 |
| Form S-1 | 1.1 |
| Form S-3 | 1.1 |
| Fund Group | 1.1 |
| Fund Members | 1.1 |
| Fund Stockholders | 1.1, Preamble |
| Holder | 1.1 |
| Holdings | Preamble |
| Initial Investors | 1.1 |
| Initiating Holders | 1.1 |
| Investor | Preamble |
| IPO | 1.1 |
| Multiple Initiation | 2.1(e) |
| Other Registrable Securities | 2.13 |
| Parent | Preamble |
| Person | 1.1 |
| Piggyback Request | 2.1(b) |
| Registrable Securities | 1.1 |
| Registrable Securities then outstanding | 1.1 |
| SEC | 1.1 |
| SEC Rule 144 | 1.1 |
| SEC Rule 145 | 1.1 |
| Securities Act | 1.1 |
| Selling Expenses | 1.1 |
| Selling Group | 2.7 |
| Selling Holder Counsel | 2.7 |
| Stock Subscription Agreement | 1.1 |
| Stockholders Agreement | 1.1 |
| Time Limitations | 2.1(a) |
| WB Fund Group | 1.1 |
| WB Fund Members | 1.1 |
| WB Fund Stockholders | 1.1 |
| Withdrawing Group | 2.7 |
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ARTICLE II
REGISTRATION RIGHTS
Section 2.1 Demand Registration .
(a) Form S-1 Demand . If at any time after the earlier of (i) five (5) years after the date of this Agreement or (ii) one hundred eighty (180) days after the effective date of the registration statement for the IPO, the Company receives a request from the Parent, Holdings, the Berkshire Fund Members or the WB Fund Members that the Company file a Form S-1 registration statement with respect to a number of the Registrable Securities then outstanding for which the anticipated aggregate offering price would exceed $100 million, then the Company shall (i) within ten (10) days after the date such request is given, give notice thereof (the “ Demand Notice ”) to all Holders other than the Holders making such request; and (ii) as soon as practicable, and in any event within sixty (60) days after the date such request is given (clauses (i) and (ii) together, the “ Time Limitations ”), file a Form S-1 registration statement under the Securities Act covering all Registrable Securities requested to be registered in such request and any additional Registrable Securities requested to be included in such demand registration by any other Holders pursuant to Section 2.1(b); provided that the foregoing Time Limitations shall be tolled immediately if the Company has delivered a Call Commencement Notice (as defined in the Stockholders Agreement) pursuant to Section 5.1 of the Stockholders Agreement until such time as the Company has either (i) delivered a Call Notice (as defined in the Stockholders Agreement) pursuant to Section 5.3 of the Stockholders Agreement, in which case the Company shall not be required to file a Form S-1 with respect to such Demand Notice, or (ii) failed to deliver a Call Notice within the twenty (20) day time period provided for in Section 5.3 of the Stockholders Agreement, in which case the Time Limitations will cease to be tolled immediately.
(b) Participation in Form S-1 Demand . Upon receipt of a Demand Notice, a Holder may request to participate in a registration pursuant to Section 2.1(a) by delivering a notice to the Company within ten (10) days of the date the Demand Notice is given, in each case, subject to the limitations of Section 2.1(d) and Section 2.3. Such notice shall specify whether such Holder’s request shall be given effect as (i) a demand pursuant to Section 2.1(a), in which case the Holder shall be deemed to have requested registration pursuant to Section 2.1(a), provided that only the Parent, Holdings or a member of the Berkshire Fund Group or WB Fund Group may make such a demand or (ii) a piggyback request (a “ Piggyback Request ”); in each case subject to Section 2.3.
(c) Form S-3 Demand . If at any time when it is eligible to use a Form S-3 registration statement, the Company receives a request from Holders to file a Form S-3 registration statement with respect to outstanding Registrable Securities of such Holders having an anticipated aggregate offering price of at least $25 million, then the Company shall (i) within ten (10) days after the date such request is given, give a Demand Notice to all other Holders other than the Holders making such request; and (ii) as soon as practicable, and in any event within forty-five (45) days after the date such request is given, file a Form S-3 registration statement under the Securities Act covering all Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the
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Company within ten (10) days of the date the Demand Notice is given, and in each case, subject to the limitations of Section 2.1(d) and Section 2.3.
(d) Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Section 2.1 a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Company’s Board of Directors it would be materially detrimental to the Company and its stockholders for such registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would: (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company or (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than ninety (90) days after the request of the Initiating Holders is given; provided , however , that the Company may not invoke this right more than twice in any twelve (12) month period with regard to any Holder. Within twenty (20) days after receiving such certificate, the holders of a majority of the Registrable Securities held by the Initiating Holders and for which registration was previously requested may withdraw such Demand Notice by giving notice to the Company; if withdrawn, the Demand Notice shall be deemed not to have been made for all purposes of this Agreement.
(e) The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(a): (i) during the period that is sixty (60) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is ninety (90) days after the effective date of, a Company-initiated registration (however, such ending date shall be one hundred eighty (180) days after the effective date of a Company-initiated registration that is the IPO), provided, that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; (ii) with respect to a member of a Fund Group, after the Company has effected two registrations pursuant to Section 2.1(a) on behalf of members of such Fund Group; or (iii) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.1(c). The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(c): (i) during the period that is thirty (30) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is ninety (90) days after the effective date of, a Company-initiated registration, provided, that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; or (ii) if the Company has effected two registration pursuant to Section 2.1(c) within the twelve (12) month period immediately preceding the date of such request. A registration shall not be counted as “effected” pursuant to Section 2.1(a) for purposes of this Section 2.1(e) until such time as the applicable registration statement has been declared effective by the SEC (provided that in the event the Initiating Holders include (i) one or more Berkshire Fund Members and one or more WB Fund Members or (ii) one or more Fund Members and Parent and/or Holdings (a “ Multiple Initiation ”), should the applicable registration statement be declared effective after a Withdrawing Group has withdrawn its request for such registration, the registration statement shall be deemed not to be declared effective by the SEC with respect to the
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Withdrawing Group for purposes of this sentence), unless the holders of a majority of the Registrable Securities held by the Initiating Holders (or in the event of a Multiple Initiation, the Initiating Holders from the applicable Fund Group) withdraw their request for such registration, elect not to pay the registration expenses therefor (or in the event of a Multiple Initiation, the portion required to be paid pursuant to Section 2.7) , and have agreed pursuant to Section 2.7 to have such registration counted as “effected” pursuant to Section 2.1(a) for purposes of this Section 2.1(e), in which case such registration shall be counted as “effected” pursuant to Section 2.1(a) for purposes of this Section 2.1(e) (with respect to such Fund Group, in the case of a Multiple Initiation).
(f) The Company shall not be obligated to effect, or to take any action to effect, more than a total of two (2) registrations pursuant to Section 2.1(a) at the request of any Berkshire Fund Members and two (2) registrations pursuant to Section 2.1(a) at the request of any WB Fund Members. There shall be no limit on the number of registrations pursuant to Section 2.1(b) or 2.1(c) that the Company shall be obligated to effect, or take any action to effect.
Section 2.2 Company Registration . If the Company proposes to register (including, for this purpose, a registration effected by the Company for stockholders other than the Holders) any of its Common Stock under the Securities Act in connection with the public offering of such securities solely for cash (other than in an Excluded Registration), the Company shall, at least twenty (20) days prior to the commencement of such offering, give each Holder notice of such registration. Upon the request of any Holder given within ten (10) days after such notice is given by the Company, the Company shall, subject to the provisions of Section 2.3, cause to be registered all of the Registrable Securities that each such Holder has requested to be included in such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 before the effective date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration. The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance with Section 2.7.
Section 2.3 Underwriting Requirements .
(a) If, pursuant to Section 2.1, the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Section 2.1, and the Company shall include such information in the Demand Notice, provided, however, that the Initiating Holders other than Parent and Holdings may distribute Registrable Securities by means of an underwriting in no more than three registrations initiated by Initiating Holders belonging to each Fund Group pursuant to this Agreement, unless the applicable Initiating Holders agree to pay any legal, accounting, printing, roadshow and other expenses incurred by the Company as a result of such distribution being effected by means of an underwriting. The underwriter(s) will be selected by the mutual agreement of the Company and a majority of the Initiating Holders. If the Company and a majority of the Initiating Holders cannot agree regarding selection of the underwriter(s), then there will be two co-lead underwriters, one of which will be selected by the Company and one of which will be selected by the Initiating Holders. The right of any Holder to include such Holder’s Registrable Securities in such registration shall be conditioned upon such
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Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Section 2.5(e)) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Section 2.3, if the managing underwriter advises the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be allocated first among Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable Securities proposed to be included in such registration by each Initiating Holder and second, to the extent that the limitation on the number of shares to be underwritten will not be exceeded, among any Holders of Registrable Securities that made a Piggyback Request with regard to such registration; or in such other proportion as shall mutually be agreed to by all such selling Holders. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest 100 shares.
(b) In connection with any offering involving an underwriting of shares of the Company’s Common Stock pursuant to Section 2.2, the Company shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company. If the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering. If the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated among the selling Holders in proportion (as nearly as practicable) to the number of Registrable Securities proposed to be included in such registration by each selling Holder or in such other proportions as shall mutually be agreed to by all such selling Holders. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest 100 shares. Notwithstanding the foregoing, in no event shall (i) the number of Registrable Securities included in the offering be reduced unless all other securities (other than securities to be sold by the Company) are first entirely excluded from the offering, or (ii) the number of Registrable Securities included in the offering be reduced below thirty percent (30%) of the total number of securities included in such offering, unless such offering is the IPO, in which case the selling Holders may be excluded further if the underwriters make the determination described above and no other stockholder’s securities are included in such offering.
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Section 2.4 Holdback Agreements .
(a) Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the IPO or to any subsequent offering of Common Stock and ending on the date specified by the Company and the managing underwriter for such offering (such period not to exceed one hundred eighty (l80) days following the IPO or ninety (90) days following any subsequent offering of Common Stock) (a) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Common Stock held immediately prior to the effectiveness of the registration statement for such offering or (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (a) or (b) above is to be settled by delivery of shares of Common Stock or other securities, in cash or otherwise. If (x) during the last seventeen (17) days of the applicable lock-up restriction period, the Company issues an earnings release or other press release of material information or a material event relating to the Company occurs or (y) prior to the expiration of the applicable lock-up period, the Company announces that it will release its earnings results during the sixteen (16) day period beginning on the last day of the applicable restricted period, then, if requested by the underwriter, the lock-up period shall be extended by, and the restrictions imposed by the immediately preceding sentence shall continue to apply, until the expiration of the eighteen (18) day period beginning on the issuance of the earnings or other press release or other occurrence of the material event. Each Holder further agrees to execute such agreements as may be reasonably requested by the managing underwriters in any offering that are consistent with this Section 2.4 or that are necessary to give further effect thereto. Notwithstanding the foregoing, this Section 2.4 shall not apply unless all executive officers and directors of the Company and each holder of securities representing five percent or more of the outstanding securities of the Company enter into similar agreements. The underwriting agreement pertaining to any offering shall provide that any discretionary waiver or termination of the requirements under the foregoing provisions made by the managing underwriter shall apply to each seller of Registrable Securities on a pro rata basis in accordance with the number of Registrable Securities held by each seller.
(b) In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Common Stock of each Holder until the end of such restricted period.
Section 2.5 Obligations of the Company . Whenever required under this ARTICLE II to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:
(a) prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the registration statement has been completed; provided , however , that in the case of any
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registration of Registrable Securities on Form S-3 that is intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, such one hundred twenty (120) day period shall be extended for up to sixty (60) days, if necessary, to keep the registration statement effective until all such Registrable Securities are sold;
(b) prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement;
(c) furnish to the selling Holders such numbers of copies of such registration statement, each amendment and supplement thereto, a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities;
(d) use its commercially reasonable efforts to (i) register and qualify the securities covered by such registration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holders, (ii) keep such registration or qualification (or exemption therefrom) effective during the period in which the registration statement is required to be kept effective, and (iii) do any and all other acts and things which may be reasonably necessary or advisable to enable each selling Holder to consummate the disposition of the Registrable Securities owned by such selling Holder; provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;
(e) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement and other customary agreements, in usual and customary form, with the underwriter(s) of such offering;
(f) use its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;
(g) provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;
(h) promptly make available for inspection by the selling Holders, any managing underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of
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the information in such registration statement and to conduct appropriate due diligence in connection therewith;
(i) notify each selling Holder, promptly after the Company receives notice thereof, of (i) the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed, (ii) the issuance by any state securities or other regulatory authority of any order suspending the qualification of any of the Registrable Securities under state securities or “blue sky” laws or the initiation of any proceedings for that purpose, and (iii) the happening of any event which makes any statement made in a registration statement or related prospectus untrue or which requires the making of any changes in such registration statement, prospectus or documents so that they will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and, as promptly as practicable thereafter, prepare and file with the SEC and furnish a supplement or amendment to such prospectus so that, as thereafter deliverable to the purchasers of such Registrable Securities, such prospectus will not contain any untrue statements of a material fact or omit a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, provided, that the Company may defer taking action with respect to such filing upon existence of any of the conditions set forth in Sections 2.1(d)(i)–(iii), and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than ninety (90) days;
(j) make generally available to the Company’s securityholders an earnings statement satisfying the provisions of Section 11(a) of the Securities Act no later than thirty (30) days after the end of the twelve (12) month period beginning with the first day of the Company’s first fiscal quarter commencing after the effective date (as defined in Rule 158 under the Securities Act) of a registration statement, which earnings statement shall cover said twelve (12) month period, and which requirement will be deemed to be satisfied if the Company timely files all required reports on Forms 10-Q, 10-K and 8-K under the Exchange Act and otherwise complies with Rule 158 under the Securities Act;
(k) if requested by the managing underwriter or any selling Holder incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or any selling Holder reasonably requests to be included therein, including, without limitation, with respect to the Registrable Securities sold by such selling Holder, the purchase price being paid therefor by the underwriters and with respect to any other terms of the underwritten offering of the Registrable Securities to be sold in such offering, and promptly make all required filings of such prospectus supplement or post-effective amendment;
(l) cooperate with the selling Holders and the managing underwriter to facilitate the timely preparation and delivery of certificates (which shall not bear any restrictive legends unless required by applicable law) representing securities sold under any registration statement, and enable such securities to be in such denominations and registered in such names as the managing underwriter of such selling Holders may request and keep available and make available to the Company’s transfer agent prior to the effectiveness of such registration statement a supply of such certificates;
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(m) furnish to the underwriter a signed original and furnish to each selling Holder a copy of (i) an opinion or opinions of counsel to the Company, and (ii) a comfort letter or comfort letters from the Company’s independent public accountants, each in customary form and covering such matters of the type customarily covered by opinions or comfort letters, as the case may be, as the selling Holders or underwriters request;
(n) provide reasonable cooperation, including causing appropriate officers to attend and participate in “road shows” and analyst or investor presentations and such other selling or other informational meetings organized by the underwriters, if any; and
(o) after such registration statement becomes effective, notify each selling Holder of (i) any request by the SEC that the Company amend or supplement such registration statement or prospectus, or (ii) the issuance of any stop order by the SEC suspending the effectiveness of such registration statement or the initiation of any proceeding for such purpose; and use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued.
Section 2.6 Furnish Information . It shall be a condition precedent to the obligations of the Company to take any action pursuant to this ARTICLE II with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required to effect the registration of such Holder’s Registrable Securities.
Section 2.7 Expenses of Registration . All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to ARTICLE II, including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements, not to exceed $50,000, of one counsel for the selling Holders (“ Selling Holder Counsel ”), shall be borne and paid by the Company; provided , however , that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2.1 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered held by the Initiating Holders (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless (i) the Holders of a majority of the Registrable Securities held by the Initiating Holders agree that the withdrawn registration statement shall be counted as “effected” pursuant to Section 2.1(a) for purposes of Section 2.1(e) or (ii) such withdrawal is due to one or more events, changes or occurrences with respect to the operations or financial results of the Company that would, individually or in the aggregate, adversely impact the success of the offering and such events, changes or occurrences were not reasonably known to the Initiating Holders at the time such demand was made; provided , that in the event of a Multiple Initiation, (x) if all applicable Fund Members from one Fund Group or Parent or Holdings withdraw their registration request (the “ Withdrawing Group ” ) and one or more of the applicable Fund Members of the other Fund Group or Parent or Holdings do not withdraw their registration request (the “ Selling Group ”) and clause (ii) does not apply, then the Withdrawing Group, if it chooses not to have its registration request counted as a registration pursuant to Section 2.1(a) for purpose of Section 2.1(e), shall only be responsible for the
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expenses of such registration that would not have occurred if only the Selling Group had been Initiating Holders and (y) if all Initiating Holders withdraw their request, then the Company shall bear and pay for the Holders which form a part of a Fund Group their pro rata portion of any expense of such registration proceeding if a majority of the Registrable Securities held by the Initiating Holders of such Fund Group agree that the withdrawn registration statement shall be counted as “effected” pursuant to Section 2.1(a) for purposes of Section 2.1(e) with respect to such Fund Group. All Selling Expenses relating to Registrable Securities registered pursuant to this ARTICLE II shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities actually sold by such Holder pursuant to the registration.
Section 2.8 Delay of Registration . No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this ARTICLE II.
Section 2.9 Indemnification . If any Registrable Securities are included in a registration statement under this ARTICLE II :
(a) To the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, and the partners, members, officers, directors, employees, and stockholders of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided , however , that the indemnity agreement contained in this Section 2.9(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any such Holder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.
(b) To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or other Holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling Holder expressly for use in connection with such registration; and each such selling Holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as
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such expenses are incurred; provided , however , that the indemnity agreement contained in this Section 2.9(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided further that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under this Section 2.9(b) exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 2.9 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.9, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided , however , that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.9, to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.9.
(d) To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 2.9 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 2.9 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Section 2.9, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided , however , that, in any such case, (x) no Holder will be required to contribute
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any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall a Holder’s liability pursuant to this Section 2.9(d) , when combined with the amounts paid or payable by such Holder pursuant to Section 2.9(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of willful misconduct or fraud by such Holder.
(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.
(f) Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and Holders under this Section 2.9 shall survive the completion of any offering of Registrable Securities in a registration under this ARTICLE II , and otherwise shall survive the termination of this Agreement.
Section 2.10 Reports Under Exchange Act . With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company shall:
(a) make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the registration statement filed by the Company for the IPO;
(b) use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after the Company has become subject to such reporting requirements); and
(c) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after ninety (90) days after the effective date of the registration statement filed by the Company for the IPO), the Securities Act, and the Exchange Act (at any time after the Company has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after the Company so qualifies); and (ii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration (at any time after the Company has become subject to the reporting requirements under the Exchange Act) or pursuant to Form S-3 (at any time after the Company so qualifies to use such form).
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Section 2.11 Limitations on Subsequent Registration Rights . From and after the date of this Agreement, the Company shall not, without the prior written consent of (i) the Holders of a majority of the Registrable Securities then outstanding, (ii) the Berkshire Fund Stockholders and (iii) the WB Fund Stockholders, enter into any agreement with any holder or prospective holder of any securities of the Company that would allow such holder or prospective holder to include such securities in any registration except for agreements that do not provide such holder or prospective holder with priority in registration over either the Berkshire Fund Stockholders or the WB Fund Stockholders.
Section 2.12 Termination of Registration Rights . The right of a Holder to request registration or inclusion of Registrable Securities in any registration hereunder shall terminate upon the later of (a) the tenth anniversary of the IPO and (b) the date upon which all Registrable Securities held by such Holder may be sold by such Holder pursuant to Rule 144 promulgated under the Securities Act in a single transaction without timing or volume limitations.
Section 2.13 Other Issues of Registrable Securities . In the event any Holder will receive any Registrable Securities issued by any Person other than the Company (“ Other Registrable Securities ” ), the Company will prior to or concurrently with the issuance, dividend, liquidation, merger, consolidation, recapitalization, reorganization or other transaction in which such Holder will receive Other Registrable Securities, cause the issuer of such Other Registrable Securities to enter into a registration rights agreement with each applicable holder providing for identical rights with respect to such Other Registrable Securities as provided for in this Agreement with respect to Registrable Securities on the same terms and conditions as set forth herein.
ARTICLE III
MISCELLANEOUS
Section 3.1 Successors, Assignees and Transferees . This Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. If any Person shall acquire Registrable Securities from any Holder in any manner, whether by operation of law or otherwise, such Person shall promptly notify the Company and such Registrable Securities acquired from such Holder shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such Person shall be entitled to receive the benefits of and be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement that are applicable to the Holder that previously held such Registrable Securities. Any such successor or assign shall agree in writing to acquire and hold the Registrable Securities acquired from such Holder subject to all of the terms hereof. If any Holder shall acquire additional Registrable Securities, such Registrable Securities shall be subject to all of the terms, and entitled to all of the benefits, of this Agreement.
Section 3.2 Notices . All notices and other communications required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified; (b) when sent by confirmed facsimile if sent during normal business hours of the recipient; if not, then on the next Business Day, provided that a copy of such notice is also sent via nationally recognized overnight courier, specifying next-day delivery, with
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written verification of receipt; (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one (1) Business Day after deposit with a nationally recognized overnight courier, specifying next-day delivery, with written verification of receipt. All communications shall be sent to such party’s address as set forth below or at such other address as the party shall have furnished to each other party in writing in accordance with this provision:
| a) | if to the Company, to: |
Coty Inc.
Two Park Avenue, 17th Fl.
New York, NY 10016
Attention: Jules P. Kaufman, Senior Vice President, General Counsel and Secretary
Facsimile: 212.479.4328
with a copy (which shall not constitute notice)
to each of:
Donata Holding SE
Ludwig-Bertram-Strasse 8+10
D-67059 Ludwigshafen/Rhein
Germany
Attention: Markus Hopmann (CFO) and Elke Demuth-Steiner (Legal Counsel)
Facsimile: 43.1.98650.200
Donata Holdings BV
Oude Weg 147
2031 CC Haarlem
The Netherlands
Attention: Markus Hopmann (CFO) and Elke Demuth-Steiner (Legal Counsel)
Facsimile: 31.23.0.2882
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, NY 10166
Attention: David Wilf
Facsimile: 212.351.6277
| b) | if to the Berkshire Fund Group or any Berkshire Fund Member, to: |
c/o Berkshire Partners LLC
200 Clarendon Street, 35th Floor
Boston,
MA 02116
Attention: Bradley M. Bloom and Sharlyn C. Heslan
Facsimile: 617.227.6105
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with a copy (which shall not constitute notice)
to:
Weil, Gotshal & Manges LLP
100 Federal Street, 34th Floor
Boston, MA 02110
Attention: James Westra
Facsimile: 617.772.8333
| c) | if to the WB Fund Group or any WB Fund Member, to: |
Rhône Group LLC
630 Fifth Avenue
New
York, NY 10111
Attention: M. Allison Steiner, General Counsel
Facsimile: 212.218.6789
with a copy (which shall not constitute notice)
to:
Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004
Attention: Richard Pollack
Facsimile: 212.558.3588
Section 3.3 Entire Agreement . This Agreement, the Stock Purchase Agreement and the Stockholders Agreement constitute the entire agreement, and supersede all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings between the parties with respect to the subject matter hereof and thereof. Notwithstanding any oral agreement or course of action of the parties or their Representatives to the contrary, no party to this Agreement shall be under any legal obligation to enter into or complete the transactions contemplated hereby unless and until this Agreement shall have been executed and delivered by each of the parties.
Section 3.4 Delays or Omissions . It is agreed that no delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character on the part of any party hereto of any breach, default or noncompliance under this Agreement or any waiver on such party’s part of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, by law, or otherwise afforded to any party, shall be cumulative and not alternative.
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Section 3.5 Governing Law; Jurisdiction . This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of New York (other than Section 5-1401 of the New York General Obligations Law).
Section 3.6 Submission to Jurisdiction . Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by the other party or its successors or assigns shall be brought and determined in any New York State or federal court sitting in the Borough of Manhattan in The City of New York (or, if such court lacks subject matter jurisdiction, in any appropriate New York State or federal court), and each of the parties hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby. Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in New York, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in New York as described herein. Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the courts in New York as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
Section 3.7 Waiver of Jury Trial . EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 3.8 Severability . If any provision hereof shall be held invalid or unenforceable by any court of competent jurisdiction or as a result of future legislative action, so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party, such holding or action shall be strictly construed and shall not affect the validity or effect of any other provision hereof, as long as the remaining provisions, taken together, are sufficient to carry out the overall intentions of the parties as evidenced hereby.
Section 3.9 Enforcement . The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with
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their specific terms or were otherwise breached. Accordingly, each of the parties shall be entitled to specific performance of the terms hereof, including an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any New York State or federal court sitting in the Borough of Manhattan in the City of New York (or, if such court lacks subject matter jurisdiction, in any appropriate New York State or federal court), this being in addition to any other remedy to which such party is entitled at law or in equity. Each of the parties hereby further waives (a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any law to post security as a prerequisite to obtaining equitable relief.
Section 3.10 Titles and Subtitles . The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
Section 3.11 Counterparts; Facsimile Signatures . This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. This Agreement may be executed by facsimile signature(s).
[ The remainder of this page is intentionally left blank ]
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IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement as of the date set forth in the first paragraph hereof.
| COTY INC. | |||
| By: | /s/ Jules P. Kaufman | ||
| Name: | Jules P. Kaufman | ||
| Title: | Senior Vice President, | ||
| General Counsel and Secretary | |||
| DONATA HOLDINGS BV | |||
| By: | /s/ Constantin Thun-Hohenstein | ||
| Name: | Constantin Thun-Hohenstein | ||
| Managing Director | |||
| By: | /s/ Joachim Creus | ||
| Name: | Joachim Creus | ||
| Title: | Managing Director | ||
| DONATA HOLDING SE | |||
| By: | /s/ Markus Hopmann | ||
| Name: | Markus Hopmann | ||
| Title: | Authorized Representative | ||
| By: | /s/ Elke Demuth-Steiner | ||
| Name: | Elke Demuth-Steiner | ||
| Title: | Authorized Representative | ||
[Registration Rights Agreement]
|
|
| BERKSHIRE FUND VII INVESTMENT CORP. | ||||
| By: | /s/ Christopher J. Hadley | |||
| Name: | Christopher J. Hadley | |||
| Title: | Vice President | |||
| BERKSHIRE FUND VII-A INVESTMENT CORP. | ||||
| By: | /s/ Christopher J. Hadley | |||
| Name: | Christopher J. Hadley | |||
| Title: | Vice President | |||
| BERKSHIRE INVESTORS III LLC | ||||
| By: | /s/ Christopher J. Hadley | |||
| Name: | Christopher J. Hadley | |||
| Title: | Managing Director | |||
| BERKSHIRE INVESTORS IV LLC | ||||
| By: | /s/ Christopher J. Hadley | |||
| Name: | Christopher J. Hadley | |||
| Title: | Managing Director | |||
[Registration Rights Agreement]
|
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| WORLDWIDE BEAUTY ONSHORE L.P. | ||||
| By: | Worldwide Beauty GP L.L.C., its general partner | |||
| By: | /s/ M. Allison Steiner | |||
| Name: | M. Allison Steiner | |||
| Title: | Authorized Signatory | |||
| WORLDWIDE BEAUTY OFFSHORE L.P. | ||||
| By: | Worldwide Beauty GP L.L.C., its general partner | |||
| By: | /s/ M. Allison Steiner | |||
| Name: | M. Allison Steiner | |||
| Title: | Authorized Signatory | |||
[Registration Rights Agreement]
Exhibit 10.3
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
between
COTY INC.,
JAB HOLDINGS II B.V. ,
THE BERKSHIRE FUND STOCKHOLDERS , and
THE WB FUND STOCKHOLDERS
Dated as of , 201
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TABLE OF CONTENTS
| Page | ||
| RECITALS | ||
| ARTICLE I DEFINITIONS | 1 | |
| Section 1.1 | Certain Defined Terms | 1 |
| Section 1.2 | Other Definitional Provisions | 6 |
| ARTICLE II CORPORATE GOVERNANCE | 6 | |
| Section 2.1 | Board Representation | 6 |
| Section 2.2 | Committees | 8 |
| Section 2.3 | Available Financial Information | 8 |
| Section 2.4 | Access | 9 |
| ARTICLE III TRANSFERS | 9 | |
| Section 3.1 | Transfer Restrictions | 9 |
| Section 3.2 | Void Transfers | 10 |
| ARTICLE IV STANDSTILL AND CONFIDENTIALITY | 10 | |
| Section 4.1 | Standstill | 10 |
| Section 4.2 | Confidentiality | 11 |
| ARTICLE V MISCELLANEOUS | 12 | |
| Section 5.1 | Amendments and Modifications | 12 |
| Section 5.2 | Waivers | 12 |
| Section 5.3 | Successors, Assigns and Transferees | 12 |
| Section 5.4 | Legends | 13 |
| Section 5.5 | Notices | 13 |
| Section 5.6 | Entire Agreement | 15 |
| Section 5.7 | Delays or Omissions | 16 |
| Section 5.8 | Governing Law; Jurisdiction | 16 |
| Section 5.9 | Submission to Jurisdiction | 16 |
| Section 5.10 | Waiver of Jury Trial | 17 |
| Section 5.11 | Severability | 17 |
| Section 5.12 | Enforcement | 17 |
| Section 5.13 | Titles and Subtitles | 17 |
| Section 5.14 | Counterparts; Facsimile Signatures | 17 |
| Section 5.15 | Other Issuers of Registrable Securities | 17 |
| EXHIBIT A | Fund Stockholders |
| EXHIBIT B | Assignment and Assumption Agreement |
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AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT, dated as of , 201 (this “ Agreement ”), between Coty Inc., a Delaware corporation (the “ Company ”), JAB Holdings II B.V., a Netherlands corporation (“ Parent ”), and the Fund Stockholders listed on Exhibit A attached hereto.
RECITALS
WHEREAS, the Berkshire Fund Stockholders and the WB Fund Stockholders (each as hereinafter defined) are parties to that certain Stockholders Agreement, as amended, dated as of January 25, 2011 (the “ Original Stockholders Agreement ”), with the Company and Parent;
WHEREAS, the Company, Parent, the Berkshire Fund Stockholders and the WB Fund Stockholders desire to amend and restate in its entirety the Original Stockholders Agreement, all as set forth herein.
AGREEMENT
In consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties agree that, subject to Section 5.6, the Original Stockholders Agreement is hereby amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms .
As used herein, the following terms shall have the following meanings:
“ Affiliate ” means, with respect to any Person, (i) any Person directly or indirectly controlling, controlled by or under common control with such Person, (ii) any Person directly or indirectly owning or controlling ten percent (10%) or more of any class of outstanding equity securities of such Person or (iii) any officer, director, general partner or trustee of any such Person described in clause (i) or (ii); provided, however, that the Fund Stockholders and their Affiliates and any present or future limited partners of the Fund Stockholders shall be deemed not to be Affiliates of the Company and its Subsidiaries, and Parent, its Affiliates and their Related Parties shall be deemed not to be Affiliates of the Fund Stockholders and their Affiliates for purposes of this Agreement.
“ Agreement ” has the meaning assigned to such term in the preamble.
“ beneficial owner ” or “ beneficially own ” has the meaning given such term in Rule 13d-3 under the Exchange Act and a Person’s beneficial ownership of Common Stock or other Voting Securities shall be calculated in accordance with the provisions of such Rule; provided, however, that for purposes of determining beneficial ownership, (i) a Person shall be deemed to be the beneficial owner of any security which may be acquired by such Person, whether within sixty
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(60) days or thereafter, upon the conversion, exchange or exercise of any warrants, options, rights or other securities and (ii) no Person shall be deemed beneficially to own any security solely as a result of this Agreement.
“ Berkshire Fund Designee ” has the meaning assigned to such term in Section 2.1(a)(i).
“ Berkshire Fund Group ” means all of the Berkshire Fund Members.
“ Berkshire Fund Members ” means the Berkshire Fund Stockholders and, subject to Section 3.1(c), their Permitted Transferees, for so long as such Persons continue to hold Equity Securities.
“ Berkshire Fund Stockholders ” means the Berkshire Fund Stockholders listed as such on Exhibit A hereto.
“ Board ” means the Board of Directors of the Company.
“ Business Day ” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in the City of New York.
“ Class A Common Stock ” has the meaning assigned to such term in the Amended and Restated Certificate of Incorporation of the Company filed with the Secretary of State of the State of Delaware on _________ __, 201_.
“ Common Stock ” means the Class A and/or Class B common stock (as the case may be), par value $0.01 per share, of the Company and any securities issued in respect thereof, or in substitution therefor, in connection with any stock split, dividend or combination, or any reclassification, recapitalization, merger, consolidation, exchange or other similar reorganization.
“ Company ” has the meaning assigned to such term in the preamble.
“ Company Business ” means the Company and its Subsidiaries’ manufacture, packaging, marketing, licensing, wholesale sales, either directly or through third-party distributors, to retailers or retail sales directly to customers, of fragrances, personal and skin care products, color cosmetics and other beauty products worldwide; provided that the Company Business does not include (i) the sale of components or raw materials or ingredients used in fragrances, personal and skin care, color cosmetics and other beauty products or (ii) the retail sale by the Company or its Subsidiaries, in the same retail space, of fragrances, personal and skin care products, color cosmetics and other beauty products manufactured, distributed and sold by both the Company and competitors of the Company.
“ Company Competitor ” means any Person (other than the Company or any of its Subsidiaries or any entity resulting from a spin-off, split-off, reorganization, merger or similar transaction of the Company or any of its Subsidiaries) that is primarily engaged in any business that directly competes with the Company Business, whether such Person engages in such business directly or through its direct or indirect control of other Persons.
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“ control ” (including the terms “ controlled by ” and “ under common control with ”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities by contract or otherwise.
“ Director ” means any member of the Board.
“ Equity Securities ” means any and all shares of Common Stock or preferred stock of the Company, securities of the Company convertible into, or exchangeable or exercisable for, such shares, and options, warrants or other rights to acquire such shares.
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“ Fund Designees ” has the meaning assigned to such term in Section 2.1(a)(ii).
“ Fund Groups ” means the Berkshire Fund Group and the WB Fund Group.
“ Fund Members ” means the Berkshire Fund Members and the WB Fund Members.
“ Fund Stockholders ” means the Berkshire Fund Stockholders and the WB Fund Stockholders and, subject to Section 3.1(c), their Permitted Transferees.
“ GAAP ” means generally accepted accounting principles, as in effect in the United States of America from time to time.
“ Group ” has the meaning assigned to such term in Section 13(d)(3) of the Exchange Act.
“ Holdings ” means Donata Holdings B.V., a Dutch company.
“ Immediate Family ” means, with respect to any specified person, such person’s spouse, parents, children and siblings, including adoptive relationships and relationships through marriage, or any other relative of such person who shares such person’s home.
“ IPO ” means the first underwritten public offering of Common Stock pursuant to a registration statement filed under the Securities Act resulting in aggregate net proceeds (after expenses and underwriting commissions and discounts) of at least $100 million; provided that following such offering the Common Stock is listed on a United States national securities exchange or quoted on a United States automated quotation system.
“ IPO Closing ” has the meaning assigned to such term in Section 5.6.
“ Original Stockholders Agreement ” has the meaning assigned to such term in the Recitals.
“ Parent ” has the meaning assigned to such term in the preamble.
“ Parent Group ” means all of the Parent Members.
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“ Parent Members ” means Parent and, subject to Section 3.1(d), its Parent Transferees, for so long as such Persons continue to hold Equity Securities.
“ Parent Transferee ” means any entity controlled by, or under common control with, Parent, Parentes Holding SE and/or Donata Holding SE.
“ Permitted Transferee ” means in the case of a Berkshire Fund Member, any entity controlled by, or under common control with, Berkshire Partners LLC or its Affiliates and, in the case of a WB Fund Member, any entity controlled by, or under common control with, Rhône Capital LLC or its Affiliates.
“ Person ” means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivisions thereof.
“ Registration Rights Agreement ” means the Registration Rights Agreement, dated as of January 25, 2011, between the Company, Holdings, the Berkshire Fund Stockholders and the WB Fund Stockholders.
“ Related Party ” means, with respect to any specified Person: (i) any Affiliate of such specified Person, or any director, executive officer, general partner or managing member of such Affiliate; (ii) any Person who serves or within the past five years has served as a director, executive officer, partner, member or in a similar capacity of such specified Person; (iii) any Immediate Family member or Affiliate of a Person described in clause (ii); or (iv) any other Person that holds, individually or together with any Affiliate of such other Person and any member(s) of such Person’s Immediate Family, more than 5% of the outstanding equity or ownership interests of such specified Person; provided, that, for the avoidance of doubt any limited partners of any Fund Member shall not be Related Parties of such Fund Member solely as a result of such limited partnership.
“ Representative ” means, with respect to a Person, the officers, directors, employees, agents, accountants, lawyers, advisors, bankers and other representatives of such Person.
“ SEC ” means the U.S. Securities and Exchange Commission.
“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“ Stock Purchase Agreement ” means that certain Stock Purchase Agreement, dated as of December 23, 2010, between the Berkshire Fund Stockholders, the WB Fund Stockholders, the Company, Holdings and Donata Holding S.E.
“ Stock Purchase Closing ” means the closing of the purchase of the shares of the Company by the Fund Stockholders pursuant to the Stock Purchase Agreement.
“ Stock Purchase Closing Date ” means the date of the Stock Purchase Closing.
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“ Stockholders ” means the Berkshire Fund Stockholders (or any Permitted Transferees thereof), the WB Fund Stockholders (or any Permitted Transferees thereof), and Parent (and any Parent Transferees thereof) for so long as such Persons continue to hold Equity Securities.
“ Stockholder Designees ” has the meaning assigned to such term in Section 2.1(b).
“ Subsidiary ” means (i) any corporation of which a majority of the securities entitled to vote generally in the election of directors thereof, at the time as of which any determination is being made, are owned by another entity, either directly or indirectly, and (ii) any joint venture, general or limited partnership, limited liability company or other legal entity in which an entity is the record or beneficial owner, directly or indirectly, of a majority of the voting interests or the general partner or managing member.
“ Subsidiary Securities ” has the meaning assigned to such term in Section 5.15.
“ Transfer ” means, directly or indirectly, to sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, voting, receipt of dividends or other distributions, hypothecation or similar disposition of, any shares of Equity Securities beneficially owned by a Person or any interest in any Equity Securities beneficially owned by a Person, including, but not limited to, any swap or any other agreement including a transaction that transfers or separates, in whole or in part, any of the economic consequences of ownership of shares of Common Stock and/or voting thereof, whether such transaction is to be settled by delivery of shares of Common Stock, other securities, cash or otherwise and whether in one or a series of related transactions. A “ Transferee ” is a Person to which Equity Securities have been transferred that is not a Permitted Transferee or a Parent Transferee. Notwithstanding the foregoing, the transfer of Equity Securities by a Person to a broker or nominee shall not constitute a “Transfer” if the transferor retains, immediately following such transfer, control (direct or indirect) over the voting and disposition of such Equity Securities and the economic consequences of ownership of such Equity Securities.
“ Unaffiliated Person ” means any Person or Group that is not (i) any of the Stockholders, (ii) a Related Party of any of the Stockholders, or (iii) a Related Party of the Company; provided, however, that for purposes of Section 3.2 of this Agreement, each reference to “any of the Stockholders” in this definition shall be deemed to be replaced with a reference to “any of the Parent Members.”
“ Underwriting Agreement ” has the meaning assigned to such term in Section 5.6.
“ Voting Securities ” means, at any time, shares of any class of Equity Securities then entitled to vote generally in the election of Directors.
“ WB Fund Designee ” has the meaning assigned to such term in Section 2.1(a)(ii).
“ WB Fund Group ” means all of the WB Fund Members.
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“ WB Fund Members ” means the WB Fund Stockholders and their Permitted Transferees for so long as such Persons continue to hold Equity Securities.
“ WB Fund Stockholders ” means the WB Fund Stockholders listed as such on Exhibit A hereto.
Section 1.2 Other Definitional Provisions .
(a) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Article and Section references are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.
ARTICLE II
CORPORATE GOVERNANCE
Section 2.1 Board Representation .
(a) Subject to Section 2.1(g), the Board shall include:
(i) one (1) designee of the Berkshire Fund Group (such person, the “ Berkshire Fund Designee ”), which Berkshire Fund Designee shall not be a director or officer of a Company Competitor; and
(ii) one (1) designee of the WB Fund Group (such person, the “ WB Fund Designee ” and, together with the Berkshire Fund Designee, the “ Fund Designees ”), which WB Fund Designee shall not be a director or officer of a Company Competitor.
(b) The Company agrees to include in the slate of nominees recommended by the Board, the Fund Designees as required hereby.
(c) In the event that a vacancy is created at any time by the death, disability, retirement, resignation or removal (with or without cause) of any Director designated pursuant to clause (i) or (ii) of Section 2.1(a), the remaining Directors and the Company shall cause the vacancy created thereby to be filled as soon as possible by a new designee of the Stockholder that has the right to designate such Director, who is designated in the manner specified in this Section 2.1, and the Company hereby agrees to take, at any time and from time to time, all actions necessary to accomplish the same.
(d) Each of the Stockholders agrees to vote promptly, or act by written consent with respect to, any Voting Securities beneficially owned by it, at each annual or special meeting of stockholders of the Company at which Directors are to be elected or to take all actions by written consent in lieu of any such meeting as are necessary, to cause the Fund Designees to be elected to the Board as provided in this Section 2.1. Each of the Stockholders agrees to use its commercially reasonable efforts to cause the election of each such designee to
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the Board, including nominating such individuals to be elected as members of the Board. In the event that a vacancy is created at any time by the death, disability, retirement, resignation or removal (with or without cause) of any Director designated pursuant to clause (i) or (ii) of Section 2.1(a) and the remaining Directors pursuant to Section 2.1(c) have not caused the vacancy created thereby to be filled by a new designee of the applicable Stockholder, then in such case each Stockholder hereby agrees to take, at any time and from time to time, all actions necessary to fill such vacancy as provided in Section 2.1(c). Upon the written request of any Stockholder, each other Stockholder shall vote promptly, or act by written consent with respect to, all Voting Securities beneficially owned by it and otherwise take or cause to be taken all actions necessary to remove any Director designated by such Stockholder and to elect any replacement Director designated by such Stockholder. No Stockholder shall take any action to cause the removal of any Director designated by any other Stockholder, unless such other Stockholder so requests in writing.
(e) The Company shall reimburse each Stockholder Designee for reasonable out-of-pocket expenses incurred by them for the purpose of attending meetings of the Board or committees thereof and agrees that all members of the Board shall be entitled to the same compensation as may be approved from time to time.
(f) The respective rights of the Berkshire Fund Group and the WB Fund Group pursuant to Section 2.1, Section 2.2 and Section 2.3 are personal to such Fund Groups and may not be transferred or assigned to, or exercised by, any Transferee.
(g) At such time as (x) the Berkshire Fund Group ceases in the aggregate to own a number of shares of Common Stock equal to at least a majority of the shares of Common Stock purchased by the Berkshire Fund Stockholders pursuant to the Stock Purchase Agreement on the Stock Purchase Closing Date, and/or (y) the WB Fund Group ceases in the aggregate to own a number of shares of Common Stock equal to at least a majority of the shares of Common Stock purchased by the WB Fund Stockholders pursuant to the Stock Purchase Agreement on the Stock Purchase Closing Date, such Fund Group shall permanently cease to have the right to designate any Directors pursuant to Section 2.1 and any rights or obligations pursuant to Section 2.1, Section 2.2, Section 2.3 and Section 2.4 and such sections shall at such time become void and of no further force or effect with respect to such Fund Group.
(h) In the event the Berkshire Fund Group or the WB Fund Group shall cease to have the right to designate a Director in accordance with Section 2.1(g), the Berkshire Fund Group or the WB Fund Group shall cause the Berkshire Fund Group’s or the WB Fund Group’s Fund Designee(s), as the case may be, to resign from the Board and the Directors remaining in office shall decrease the size of the Board to eliminate such vacancy.
(i) The Company agrees to cause at least one meeting of the Board to be held each fiscal quarter, and to make provisions such that any member of the Board may attend such meetings by remote means (e.g., by telephone or video conference).
(j) The Company shall maintain a directors’ and officers’ liability insurance policy with such levels of coverage as are reasonably appropriate for a company in the Company Business of the size of the Company.
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(k) The Fund Designees shall, at the time of designation, be subject to the reasonable approval of the Company based upon the Fund Designees’ financial, operational and industry knowledge. The Company acknowledges that, in the case of the Berkshire Fund Group, Bradley M. Bloom is approved to serve as the Berkshire Fund Group’s Fund Designee, and that in the case of the WB Fund Group, M. Steven Langman is approved to serve as the WB Fund Group’s Fund Designee.
(l) To the extent the Board increases in size beyond nine (9), the number of Directors designated by each of the Berkshire Fund Group and the WB Fund Group shall be adjusted to ensure proportional representation (based on the same ratio calculated with respect to the nine (9) Directors, assuming seven (7) designees other than those of the Berkshire Fund Group and the WB Fund Group, one (1) designee of the Berkshire Fund Group and one (1) designee of the WB Fund Group); provided that the number of Berkshire Fund Designee(s) and the WB Fund Designee(s) shall be rounded down to the nearest whole number, but subject to Section 2.1(g), to not fewer than one designee.
Section 2.2 Committees .
(a) Subject to Section 2.1(g), the Company shall cause one (1) Berkshire Fund Designee or one (1) WB Fund Designee to be appointed to and sit on each of the Remuneration and Nomination Committee and Audit and Finance Committee of the Board, with such Berkshire Fund Designee and WB Fund Designee rotating every third annual stockholders meeting between the two committees at the Company’s annual stockholders meeting. In the event that one of the Fund Groups ceases to have the right to designate a Director pursuant to Section 2.1, and the other Fund Group continues to have such right, such other Fund Group will have the right to have a total of one of its Fund Designees on each of such committees in the stead of the Fund Group that has lost such right. The Fund Designees are as of the date of this Agreement in their first such rotation, with the WB Fund Designee on the Remuneration and Nomination Committee and the Berkshire Fund Designee on the Audit and Finance Committee. Each Director shall be provided upon request with any materials distributed to committees of the Board, including minutes of the committee meetings, to the extent minutes are prepared, regardless of whether such Director has been appointed to and sits on such committee.
(b) No material decisions of the Board (other than those delegated to the Remuneration and Nomination Committee and Audit and Finance Committee of the Board) may be made by a committee instead of by the full Board, unless each Fund Group permitted to appoint a Director pursuant to Section 2.1 is permitted to be represented on the applicable committee by at least one Director pursuant to Section 2.2(a) or by action of the Board.
Section 2.3 Available Financial Information .
(a) Subject to Section 2.1(g), the Company will deliver the following to the Parent Group and each Fund Group:
(i) as soon as available after the end of each month and in any event within thirty (30) days thereafter, the monthly management report given to the Company’s executive officers;
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(ii) as soon as available after the end of each fiscal year of the Company and in any event within ninety (90) days thereafter, (A) the annual financial statements required to be filed by the Company pursuant to the Exchange Act or (B) a consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal year, and consolidated statements of income, retained earnings and cash flows of the Company and its Subsidiaries, for such year, in each case prepared in accordance with GAAP and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and accompanied by the opinion of independent public accountants of recognized national standing selected by the Company; and
(iii) with reasonable promptness, such other information and data (including such information and reports made available to any lender of the Company or any of its Subsidiaries under any credit agreement or otherwise) with respect to the Company and each of its Subsidiaries as from time to time may be reasonably requested by any Stockholder.
Section 2.4 Access . Subject to Section 2.1(g) and to existing legal or contractual confidentiality obligations owed to third parties, the Company shall, and shall cause its Subsidiaries, officers, Directors, employees, auditors and other agents, to afford each Fund Group and its Representatives reasonable access, during normal business hours and upon reasonable notice, to the officers, employees, auditors, legal counsel, properties, offices, plants and other facilities and to the books and records of the Company and its Subsidiaries, provided that such access shall not disrupt the normal operations of the Company or its Subsidiaries. All requests for access pursuant to this Section 2.4 shall be made to and subject to the reasonable direction of the Chief Financial Officer of the Company or his or her designee.
ARTICLE
III
TRANSFERS
Section 3.1 Transfer Restrictions .
(a) A Fund Member may Transfer its Equity Securities, subject to the Registration Rights Agreement, Section 3.1(b) and applicable securities laws; provided that in the case of a direct secondary sale of the Common Stock held by a Fund Stockholder, the Person to which such Equity Securities are being Transferred is not a Company Competitor.
(b) No Fund Member may Transfer any Equity Securities to any Person (other than a Permitted Transferee) if, to the knowledge of such Fund Member or such Transferee, as the case may be, after reasonable inquiry (other than in the case of an open market transaction, and in all cases taking into account the nature of the transaction), the Transferee or a “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) that directly or indirectly controls such Transferee or any “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) of which such Transferee or its parent or subsidiary entities is a member is or would become the “beneficial owner” (as such term is used in Rule 13d-3 under the Exchange Act) of five percent (5%) or more of all the issued and outstanding Common Stock after giving effect to such Transfer, unless such Transferee, controlling person or group is permitted to disclose its beneficial ownership of Common Stock pursuant to Schedule 13G under the Exchange Act and such Transferee, controlling person or group would not, upon consummation
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of the Transfer of the shares of Common Stock, be required to report its beneficial ownership of Common Stock pursuant to Schedule 13D under the Exchange Act. Notwithstanding the foregoing, nothing in this Section 3.1(b) shall prohibit a Fund Member (or any Permitted Transferee thereof a signatory hereto) from tendering into any tender or exchange offer initiated by an Unaffiliated Person that the Board does not, within ten (10) Business Days after the commencement of such offer, recommend against (or if the Board subsequently changes its recommendation to recommend that the stockholders of the Company accept such offer).
(c) Fund Members may not Transfer any of their Equity Securities to a Permitted Transferee unless such Permitted Transferee has agreed in writing in the form attached as Exhibit B hereto to be bound and to comply with all applicable provisions of this Agreement and the Registration Rights Agreement as a transferee of such Fund Member hereunder. If any Permitted Transferee to which Equity Securities are transferred in accordance with this Section 3.1(c) ceases to be a Permitted Transferee then this Agreement shall, subject to the continuing rights of the parties to this Agreement to enforce the provisions of this Section 3.1(c), be deemed terminated as to such Person immediately before such Person ceased to be a Permitted Transferee, and, in the event that the Transfer to such Person would not have been permissible under Section 3.1(a) and Section 3.1(b) i mmediately after its ceasing to be a Permitted Transferee , then such Person shall, at the time such Person ceases to be a Permitted Transferee, Transfer such Equity Securities back to the Fund Member from whom such Transfer was made or to a Permitted Transferee of such Fund Member.
(d) Any Parent Transferee to which a Parent Member transfers any Equity Securities shall agree in writing in the form attached as Exhibit B hereto to be bound and to comply with all applicable provisions of this Agreement and the Registration Rights Agreement as a transferee of the applicable Parent Member hereunder and shall thereupon succeed to the rights and obligations of the transferring Parent Member.
Section 3.2 Void Transfers . Any Transfer or attempted Transfer of Equity Securities in violation of Section 3.1 of this Agreement shall be null and void ab initio , shall not be recorded on the books of the Company or its transfer agent and shall not be recognized by the Company, provided that, for the avoidance of doubt, a Transfer of Equity Securities to a Permitted Transferee that ceases to be a Permitted Transferee shall not be null and void and shall instead be subject to the requirements of Section 3.1(c).
ARTICLE IV
STANDSTILL AND CONFIDENTIALITY
Section 4.1 Standstill . For a period of four years after the date of this Agreement, unless specifically invited in writing by the Company, each Fund Member and its Representatives will not in any manner, directly or indirectly, (a) effect or seek, offer or propose (whether publicly or otherwise) to effect, or announce any intention to effect or cause or participate in or in any way assist or encourage any other Person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in, (i) any acquisition of any securities (or beneficial ownership thereof) or assets of the Company or any of its Affiliates (other than acquisitions of securities representing less than 3% of the Company’s then-outstanding voting securities), including rights or options to acquire such ownership; (ii) any
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tender or exchange offer, merger or other business combination involving the Company or any of its Affiliates (other than tendering into any tender or exchange offer initiated by an Unaffiliated Person that the Board does not, within 10 Business Days after the commencement of such offer, recommend against); (iii) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company or any of its Affiliates, or (iv) any “solicitation” of “proxies” (as such terms are defined in Rule 14a-1 of Regulation 14A under the Exchange Act, disregarding clause (iv) of Rule 14a-1(l)(2) and including any otherwise exempt solicitation pursuant to Rule 14a-2(b)) or consents to vote any voting securities of the Company or any of its Affiliates; (b) form, join or in any way participate in a “group” (as defined in Section 13(d)(3) of the Exchange Act and the rules and regulations thereunder) with respect to any voting securities of the Company or any of its Affiliates or otherwise act in concert with any Person in respect of any such securities; (c) otherwise act, alone or in concert with others, to seek to control, advise, change or influence the management, Board, governing instruments, shareholders, policies or affairs of the Company or any of its Affiliates; (d) enter into any discussions or arrangements with any third party with respect to any of the foregoing; or (e) make any public disclosure, or take any action that might force the Company, any of its Affiliates or any other Person to make any public disclosure, with respect to the matters set forth in this Agreement. Each Fund Member agrees during such period that it will not request that the Company (or any of its Representatives), directly or indirectly, amend or waive any provision of this paragraph (including this sentence). Notwithstanding anything to the contrary herein, none of the provisions of this Article IV shall apply to any Affiliate of any Fund Member or its Representatives, unless such Affiliate or its Representatives are at such time in possession of any material non-public information of the Company received from such Fund Members or their Representatives or unless such Affiliate is a Permitted Transferee that received a Transfer of Equity Securities in compliance with Section 3.1.
Section 4.2 Confidentiality .
(a) All information furnished to any party pursuant to this Agreement shall be kept confidential by the receiving party and its Affiliates that have actually received such information and shall be used by the receiving party and its Affiliates that have actually received such information only pursuant to this Agreement, except with the prior written consent of the disclosing party, or except to the extent that such information (i) is information which the receiving party can demonstrate was already known to the receiving party when received without any obligation to maintain its confidentiality; (ii) at the time of disclosure or thereafter becomes lawfully obtainable from other sources through no act or failure to act on the part of the receiving party without any obligation to maintain its confidentiality; (iii) is required to be disclosed in any document to be filed with any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, or in connection with any litigation; (iv) is disclosed in connection with any consultation with attorneys, accountants, employees, or other advisors under an obligation to keep such information confidential; or (v) is required to be disclosed by court order or otherwise mandated by law or regulation; provided, however, that the receiving party shall disclose only so much of the confidential information as is legally required and shall, in the case of clauses (iii) and (v) of this Section 4.2(a) and to the extent legally permissible, notify the other parties promptly and in advance of any such disclosure so that an appropriate protective order may be sought or other action may be taken in
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consultation between the parties. Notwithstanding anything to the contrary in this Section 4.2, if a party or any of its Affiliates that have actually received such information are subject to routine examination by or a blanket request from a governmental regulatory agency, such party and such Affiliates may disclose any such information as requested by such agency in the course of any such examination, without complying with the foregoing notice provision, provided that the Company is not a subject of such examination or request. The parties shall establish commercially reasonable precautions to ensure that their Affiliates, principals, agents, advisors and employees that have actually received information abide by the terms of this Section 4.2(a). For purposes of this Section 4.2(a), the “Affiliates” of any Parent Member shall include (i) any Person within the definition of “Parent Transferee”, (x) Joh. A. Benckiser Advisor Co. LLC, and (y) all of the respective officers, directors, partners, advisors and employees of any Person described in clause (x) or (y).
(b) Notwithstanding anything in this Section 4.2 to the contrary, a party shall be entitled to disclose otherwise confidential information pertaining to this Agreement (i) to the extent required by the rules of any listing authority or stock exchange to which such party is subject, (ii) to provide its investors and prospective investors with certain general information regarding the transactions contemplated by this Agreement in its annual or quarterly investor reports or other communications to investors or prospective investors consistent with such party’s standard investor communication and disclosure practices, or (iii) pursuant to customary confidentiality protections naming the Company as express third-party beneficiary in order to consider or effect a potential Transfer of Equity Securities in accordance with the terms hereof.
ARTICLE V
MISCELLANEOUS
Section 5.1 Amendments and Modifications . This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each party.
Section 5.2 Waivers . No failure or delay of either party in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The rights, powers and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies which they would otherwise have hereunder. Any agreement on the part of any party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such party.
Section 5.3 Successors, Assigns and Transferees . This Agreement shall bind and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns; provided that the Fund Stockholders may assign their respective rights (but may not delegate their obligations) hereunder only to the extent expressly provided herein and (ii) Permitted Transferees shall have rights and obligations hereunder only if they become signatories hereto pursuant to Section 3.1(c).
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Section 5.4 Legends .
(a) All certificates representing the Equity Securities and all book-entry Equity Securities held by each Stockholder shall bear a legend, or include a notation, as appropriate, substantially in the following form:
“THE SECURITIES EVIDENCED HEREBY ARE SUBJECT TO AN AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES EVIDENCED HEREBY MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH AN AMENDED AND RESTATED STOCKHOLDERS AGREEMENT AND (A) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER. THE HOLDER OF THE EQUITY SECURITIES EVIDENCED HEREBY AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH AN AMENDED AND RESTATED STOCKHOLDERS AGREEMENT.”
(b) Upon (i) the sale of any Equity Securities pursuant to (A) an effective registration statement under the Securities Act, (B) pursuant to Rule 144 under the Securities Act or (C) another exemption from registration under the Securities Act or (ii) the termination of this Agreement, the certificates representing such Equity Securities shall be replaced, at the expense of the Company, with certificates or instruments not bearing the legend required by this Section 5.3; provided that the Company may condition such replacement of certificates under clause (ii) upon the receipt of an opinion of securities counsel reasonably satisfactory to the Company.
Section 5.5 Notices . All notices and other communications required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified; (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next Business Day, provided that a copy of such notice is also sent via nationally recognized overnight courier, specifying next day delivery, with written verification of receipt; (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one (1) Business Day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to such party’s address as set forth below or to such other address as the party or a Permitted Transferee or Parent Transferee shall have furnished to each other party in writing in accordance with this provision:
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| (i) | if to the Company to: | |
| Coty Inc. | ||
| Two Park Avenue, 17th Floor | ||
| New York, NY 10016 | ||
| Attention: Jules P. Kaufman, Senior Vice President, General Counsel and Secretary | ||
| Facsimile: 212.479.4328 | ||
| with a copy (which shall not constitute notice) to: | ||
| JAB Holdings II B.V. | ||
| Oude Weg 147 | ||
| 2031 CC Haarlem | ||
| The Netherlands | ||
| Attention: Markus Hopmann (CFO) and Joachim Creus (Legal Counsel) | ||
| Facsimile: 31.23.0.2882 | ||
| and with a copy (which shall not constitute notice) to: | ||
| Gibson, Dunn & Crutcher LLP | ||
| 200 Park Avenue | ||
| New York, NY 10166 | ||
| Attention: David Wilf | ||
| Facsimile: 212.351.6277 | ||
| (ii) | if to Parent to: | |
| JAB Holdings II B.V. | ||
| Oude Weg 147 | ||
| 2031 CC Haarlem | ||
| The Netherlands | ||
| Attention: Markus Hopmann (CFO) and Joachim Creus (Legal Counsel) | ||
| Facsimile: 31.23.0.2882 | ||
| with a copy (which shall not constitute notice) to: | ||
| Duane Morris LLP | ||
| 1540 Broadway | ||
| New York, NY 10036-4086 | ||
| Attention: Lee J. Potter, Jr. | ||
| Facsimile: 212.208.2495 | ||
| (iii) | if to the Berkshire Fund Group or any Berkshire Fund Member to: | |
| c/o Berkshire Partners LLC |
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| 200 Clarendon Street, 35th Floor | ||
| Boston, MA 02116 | ||
| Attention: Bradley M. Bloom and Sharlyn C. Heslam | ||
| Facsimile: 617.227.6105 | ||
| with a copy (which shall not constitute notice) to: | ||
| Weil, Gotshal & Manges LLP | ||
| 100 Federal Street, 34th Floor | ||
| Boston, MA 02110 | ||
| Attention: Shayla Harlev | ||
| Facsimile: 617.772.8333 | ||
| (iv) | if to the WB Fund Group or any WB Fund Member to: | |
| Rhône Group LLC | ||
| 630 Fifth Avenue | ||
| New York, NY 10111 | ||
| Attention: M. Allison Steiner, General Counsel | ||
| Facsimile: 212.218.6789 | ||
| with a copy (which shall not constitute notice) to: | ||
| Sullivan & Cromwell LLP | ||
| 125 Broad Street | ||
| New York, NY 10004 | ||
| Attention: Richard Pollack | ||
| Facsimile: 212.558.3588 |
Section 5.6 Entire Agreement . This Agreement, the Stock Purchase Agreement, the Registration Rights Agreement and the other agreements executed and delivered in connection therewith, constitute the entire agreement, and supersede all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings between the parties with respect to the subject matter hereof and thereof, including the Original Stockholders Agreement; provided that Section 2.3, Section 3.3, Section 3.4(g), Section 4.1 and Section 7.7 of the Original Stockholders Agreement shall remain in full force and effect until the closing of the sale of the Class A Common Stock contemplated under that certain underwriting agreement (the “ Underwriting Agreement ”), dated as of even date herewith by and among the Company, the selling stockholders therein named and the underwriters therein named (the “ IPO Closing ”), at which time such Section 2.3, Section 3.3, Section 3.4(g), Section 4.1 and Section 7.7 shall terminate and shall be of no further force or effect; provided further that if the Underwriting Agreement is terminated prior to the IPO Closing, then this Agreement shall immediately terminate (provided that any claims for breaches of this Agreement that occurred while this Agreement was in effect shall survive such termination) and the Original Stockholders Agreement shall be concurrently reinstated, unchanged and in full force and effect. Notwithstanding any oral agreement or course of action of the parties or their Representatives to
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the contrary, no party to this Agreement shall be under any legal obligation to enter into or complete the transactions contemplated hereby unless and until this Agreement shall have been executed and delivered by each of the parties.
Section 5.7 Delays or Omissions . It is agreed that no delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character on the part of any party hereto of any breach, default or noncompliance under this Agreement or any waiver on such party’s part of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, by law, or otherwise afforded to any party, shall be cumulative and not alternative.
Section 5.8 Governing Law; Jurisdiction . This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of New York (other than Section 5‑1401 of the New York General Obligations Law).
Section 5.9 Submission to Jurisdiction . Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any other party or its successors or assigns shall be brought and determined in any New York State or federal court sitting in the Borough of Manhattan in The City of New York (or, if such court lacks subject matter jurisdiction, in any appropriate New York State or federal court), and each of the parties hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby. Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in New York, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in New York as described herein. Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the courts in New York as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
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Section 5.10 Waiver of Jury Trial . EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 5.11 Severability . If any provision hereof shall be held invalid or unenforceable by any court of competent jurisdiction or as a result of future legislative action, so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party, such holding or action shall be strictly construed and shall not affect the validity or effect of any other provision hereof, as long as the remaining provisions, taken together, are sufficient to carry out the overall intentions of the parties as evidenced hereby.
Section 5.12 Enforcement . The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, each of the parties shall be entitled to specific performance of the terms hereof, including an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any New York State or federal court sitting in the Borough of Manhattan in The City of New York (or, if such court lacks subject matter jurisdiction, in any appropriate New York State or federal court), this being in addition to any other remedy to which such party is entitled at law or in equity. Each of the parties hereby further waives (a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any law to post security as a prerequisite to obtaining equitable relief.
Section 5.13 Titles and Subtitles . The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
Section 5.14 Counterparts; Facsimile Signatures . This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. This Agreement may be executed by facsimile signature(s).
Section 5.15 Other Issuers of Registrable Securities . In the event that the Company distributes securities of a Subsidiary (“ Subsidiary Securities ”), the Company will, prior to or concurrently with the issuance, dividend, liquidation, merger, consolidation, recapitalization, reorganization or other transaction in which such Subsidiary Securities will be distributed cause each applicable Subsidiary to enter into a stockholders agreement with the Stockholders party to this Agreement providing for the same rights, terms and conditions with respect to such Subsidiary Securities as are provided for in this Agreement with respect to the Equity Securities.
[ The remainder of this page is intentionally left blank ]
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IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Stockholders Agreement as of the date set forth in the first paragraph hereof.
| COTY INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| JAB HOLDINGS II B.V. | ||
| By: | ||
| Name: | ||
| Title: | ||
| By: | ||
| Name: | ||
| Title: | ||
Signature Page to Amended and Restated Stockholders Agreement
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| BERKSHIRE FUND VII, L.P. | ||
| By: | Seventh Berkshire Associates LLC, its | |
| general partner | ||
| By: | ||
| Name: | ||
| Title: | ||
| BERKSHIRE FUND VII-A, L.P. | ||
| By: | Seventh Berkshire Associates LLC, its | |
| general partner | ||
| By: | ||
| Name: | ||
| Title: | ||
| BERKSHIRE INVESTORS III LLC | ||
| By: | ||
| Name: | ||
| Title: | ||
| BERKSHIRE INVESTORS IV LLC | ||
| By: | ||
| Name: | ||
| Title: | ||
Signature Page to Amended and Restated Stockholders Agreement
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| WORLDWIDE BEAUTY ONSHORE L.P. | ||
| By: | Worldwide Beauty GP L.L.C., its general partner | |
| By: | ||
| Name: | ||
| Title: | ||
| WORLDWIDE BEAUTY OFFSHORE L.P. | ||
| By: | Worldwide Beauty GP L.L.C., its general partner | |
| By: | ||
| Name: | ||
| Title: | ||
Signature Page to Amended and Restated Stockholders Agreement
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Exhibit A
Fund Stockholders
Berkshire Fund Stockholders
| • | Berkshire Fund VII, L.P. |
| • | Berkshire Fund VII-A, L.P. |
| • | Berkshire Investors III LLC |
| • | Berkshire Investors IV LLC |
WB Fund Stockholders
| • | Worldwide Beauty Onshore L.P. |
| • | Worldwide Beauty Offshore L.P. |
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Exhibit B
Assignment and Assumption Agreement
Pursuant to the Amended and Restated Stockholders Agreement, dated as of August __, 2012 (the “ Stockholders Agreement ”), between Coty Inc., a Delaware corporation (the “ Company ”), and each of the stockholders of the Company whose name appears on the signature pages listed therein (each, a “ Stockholder ” and collectively, the “ Stockholders ”), [Stockholder Name] (the “ Transferor ”) hereby assigns to the undersigned Permitted Transferee the rights that may be assigned thereunder with respect to the Equity Securities so Transferred, and the undersigned hereby agrees that, having acquired Equity Securities as permitted by the terms of the Stockholders Agreement, the undersigned shall jointly assume the obligations of the Transferor under the Stockholders Agreement with respect to the Equity Securities so Transferred. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Stockholders Agreement. Notices and other communications to the undersigned Permitted Transferee required or permitted under the Stockholders Agreement shall be addressed as set out below.
Listed below is information regarding the Equity Securities:
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Number of
Shares of Common Stock |
||
IN WITNESS WHEREOF, the undersigned has executed this Assignment and Assumption Agreement as of ___________________, 20_____.
| [ NAME OF PERMITTED TRANSFEREE ] | |||
| Name: | |||
| Title: | |||
| Acknowledged by: | [Address] | ||
| COTY INC. | |||
| By: | |||
| Name: | |||
| Title: | |||
Exhibit 10.24
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this “ Agreement ”) is entered into as of [_] by and between Coty Inc., a Delaware corporation (the “ Company ”), and [_] (the “ Indemnitee ”) and is effective as of [_] (the “ Effective Date ”).
RECITALS
WHEREAS, the Board of Directors has determined that attracting and retaining qualified persons as directors and officers is in the best interests of the Company’s stockholders and that the Company should act to assure such persons that there shall be adequate certainty of protection through insurance and indemnification against risks of claims and actions against them arising out of their service to and activities on behalf of the Company;
WHEREAS, the Company has adopted provisions in its certificate of incorporation, as amended and restated from time to time (the “ Certificate of Incorporation ”), and by-laws, as amended and restated from time to time (the “ By-laws ”) providing for indemnification and advancement of expenses of its directors and officers to the fullest extent authorized or permitted by the General Corporation Law of the State of Delaware (the “ DGCL ”), and the Company wishes to clarify, enhance and supplement the rights and obligations of the Company and the Indemnitee with respect to indemnification and advancement of expenses;
WHEREAS, in order to induce and encourage highly experienced and capable persons such as the Indemnitee to serve and continue to serve as directors and officers of the Company and in any other capacity with respect to the Company as the Company may request, and to otherwise promote the desirable end that such persons shall resist what they consider unjustified lawsuits and claims made against them in connection with the good faith performance of their duties to the Company, with the knowledge that certain costs, judgments, penalties, fines, liabilities, and expenses incurred by them in their defense of such litigation are to be borne by the Company and they shall receive the maximum protection against such risks and liabilities as may be afforded by applicable law, the Board of Directors of the Company has determined that the following Agreement is reasonable and prudent to promote and ensure the best interests of the Company and its stockholders; and
WHEREAS, the Company desires to have the Indemnitee continue to serve as a director or officer of the Company and in any other capacity with respect to the Company as the Company may request, as the case may be, free from undue concern for unpredictable, inappropriate, or unreasonable legal risks and personal liabilities by reason of the Indemnitee acting in good faith in the performance of the Indemnitee’s duty to the Company; and the Indemnitee desires to continue so to serve the Company, provided , and on the express condition, that he or she is furnished with the indemnity set forth hereinafter.
AGREEMENT
NOW, THEREFORE, in consideration of the Indemnitee’s continued service as a director or officer of the Company, the parties hereto agree as follows:
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1. Definitions . For purposes of this Agreement:
(a) A “ Change in Control ” will be deemed to have occurred if the individuals who, as of the Effective Date, constitute the Board of Directors of the Company (the “ Incumbent Board ”) cease for any reason to constitute at least a majority of the Board of Directors; provided , however , that any individual becoming a director subsequent to such effective date whose election, or nomination for election by the stockholders of the Company, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board of Directors.
(b) “ Disinterested Director ” means a director of the Company who is not or was not a party to the Proceeding in respect of which indemnification is being sought by the Indemnitee; provided , however , that no Director shall fail to be a Disinterested Director solely as a result of such Director being party to a Proceeding with respect to the enforcement of rights of the Indemnitee under this Agreement, the Agreement Regarding Indemnification Obligations, effective as of the Effective Date, by and among the Company, Worldwide Beauty Onshore L.P., Worldwide Beauty Offshore L.P. and the WB Designee (the “ WB Agreement Regarding Indemnification Obligations ”), the Agreement Regarding Indemnification Obligations, effective as of the Effective Date, by and among the Company, Berkshire Fund VII Investment Corp., Berkshire Fund VII-A Investment Corp., Berkshire Investors III LLC, Berkshire Investors IV LLC and the Berkshire Designee (together with the WB Agreement Regarding Indemnification Obligations, the “ Agreements Regarding Indemnification Obligations ”), the Certificate of Incorporation of the Company or the By-laws of the Company.
(c) “ Expenses ” means all reasonable direct and indirect costs, fees, and expenses of any type or nature whatsoever incurred in connection with the performance of the duties of the Indemnitee as a member of the board of directors and includes, without limitation, any cost, fees or expenses incurred in connection with the preparation for, investigation of, and actual prosecution, defense or settlement of, or acting as a witness in, any threatened, pending, current or completed action, suit, arbitration, alternative dispute mechanism, inquiry, judicial, administrative, or legislative hearing, investigation, or any other proceeding, whether brought by or in the right of the Company or otherwise, including any and all appeals therefrom, whether of a civil, criminal, administrative, legislative, investigative, or other nature, attorneys’ fees, retainers and expenses, witness fees and expenses, fees and expenses of accountants and other advisors, retainers and disbursements and advances thereon, the premium, security for, and other costs relating to any bond (including cost bonds, appraisal bonds, or their equivalents), any expenses incurred by or on behalf of the Indemnitee in connection with preparing and submitting any requests or statements for indemnification, advancement, contribution or any other right provided for in this Agreement and any expenses of establishing a right to indemnification or advancement under Sections 9, 11, 13, and 16 hereof, but shall not include the amount of judgments, fines, ERISA excise taxes, or penalties actually levied against the Indemnitee, or any amounts paid in settlement by or on behalf of the Indemnitee.
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(d) “ Independent Counsel ” means a law firm or a member of a law firm that neither is presently nor in the past five years has been retained to represent (i) the Company, its subsidiaries or the Indemnitee in any matter material to any such party or (ii) any other party to the Proceeding giving rise to a request for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s right to indemnification under this Agreement.
(e) “ Proceeding ” means any action, suit, arbitration, alternative dispute mechanism, inquiry, judicial, administrative, or legislative hearing, investigation, or any other threatened, pending, or completed proceeding, whether brought by or in the right of the Company or otherwise, including any and all appeals, whether of a civil, criminal, administrative, legislative, investigative, or other nature, to which the Indemnitee was or is a party or is threatened to be made a party or is otherwise involved in by reason of the fact that the Indemnitee is or was a director, officer, employee, agent, manager, fiduciary, or trustee of the Company or while a director, officer, employee, agent, manager, fiduciary or trustee of the Company is or was serving at the request of the Company as a director, officer, employee, agent, manager, fiduciary or trustee of another corporation, partnership, limited liability company, joint venture, trust, or any other enterprise, including service with respect to an employee benefit plan, or by reason of anything done or not done by the Indemnitee in any such capacity, whether or not the Indemnitee is serving in such capacity at the time any expense, liability, or loss is incurred for which indemnification or advancement can be provided under this Agreement.
2. Service by the Indemnitee . The Indemnitee shall serve and/or continue to serve as a director or officer of the Company so long as the Indemnitee is duly elected or appointed and until such time as the Indemnitee’s successor is elected and qualified or the Indemnitee is removed as permitted by applicable law or tenders a resignation in writing.
3. Indemnification and Advancement of Expenses . The Company shall indemnify and hold harmless the Indemnitee, and shall pay to the Indemnitee (i) all Expenses incurred by or on behalf of the Indemnitee and (ii) the amount of any judgments, fines, ERISA excise taxes, or penalties actually levied against the Indemnitee, or any amounts paid in settlement by or on behalf of the Indemnitee, to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended, but only to the extent that any such amendments expand the rights of the Indemnitee, all on the terms and conditions set forth in this Agreement. Without diminishing the scope of the rights provided by this Section, the rights of the Indemnitee to indemnification and advancement of Expenses provided hereunder shall include but shall not be limited to those rights hereinafter set forth, except that no indemnification or advancement of Expenses shall be paid to the Indemnitee:
(a) to the extent expressly prohibited by applicable law;
(b) for and to the extent that payment has previously been made to the Indemnitee under a valid and collectible insurance policy or under a valid and enforceable indemnity clause, provision of the Certificate of Incorporation or By-laws, or agreement of the Company or any other company or other enterprise where the Indemnitee is or was serving at the
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request of the Company (and the Indemnitee shall reimburse the Company for any amounts paid by the Company and subsequently so recovered by the Indemnitee);
(c) in respect of any claim brought by the Indemnitee, except in connection with (i) a judicial proceeding or arbitration (A) pursuant to Section 11 to enforce rights under this Agreement or (B) to enforce the terms of the Agreements Regarding Indemnification Obligations, or (ii) the enforcement of any other rights of the Indemnitee to indemnification, advancement or contribution from the Company under any other contract, the Certificate of Incorporation or By-laws or under statute or other law, including any rights under Section 145 of the DGCL, unless the action, suit, or proceeding, or part thereof, was authorized or ratified by the Board of Directors of the Company; or
(d) with respect to any Proceeding brought by or in the right of the Company against the Indemnitee that is authorized by the Board of Directors of the Company, except as provided in Sections 5, 6, and 7 below.
4. Indemnity in Proceedings Other than a Proceeding by or in the Right of the Company . Except as limited by Section 3 above, the Indemnitee shall be entitled to the indemnification rights provided in this Section if the Indemnitee was or is a party, or is threatened to be made a party to, or was or is otherwise involved in, any Proceeding (other than a Proceeding by or in the right of the Company). Pursuant to this Section the Company shall, to the fullest extent permitted by the DGCL, as the same exists or may hereafter be amended, but only to the extent that any such amendments expand the rights of the Indemnitee, indemnify the Indemnitee from and against all expense, liability, and loss (including judgments, fines, ERISA excise taxes or penalties, amounts paid in settlement by or on behalf of the Indemnitee, and Expenses) actually and reasonably incurred by or on behalf of the Indemnitee in connection with such Proceeding, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in, or not opposed to the best interests of, the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe his or her conduct was unlawful.
5. Indemnity in Proceedings by or in the Right of the Company . Except as limited by Section 3 above, the Indemnitee shall be entitled to the indemnification rights provided in this Section if the Indemnitee was or is a party, or is threatened to be made a party to, or was or is otherwise involved in, any Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section the Company shall, to the fullest extent permitted by the DGCL, as the same exists or may hereafter be amended, but only to the extent that any such amendments expand the rights of the Indemnitee, indemnify the Indemnitee from and against all Expenses actually and reasonably incurred by or on behalf of the Indemnitee in connection with such Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company; provided , however , that no such indemnification shall be made in respect of any claim, issue, or matter as to which the DGCL, as the same exists or may hereafter be amended, but only to the extent that any such amendments expand the rights of the Indemnitee, expressly prohibits such indemnification by reason of any adjudication of liability of the Indemnitee to the Company, unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such Proceeding was brought shall determine upon application that, despite the
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adjudication of liability but in view of all the circumstances of the case, the Indemnitee is entitled to indemnification for such Expenses, liabilities, and losses as such court shall deem proper.
6. Indemnification for Costs, Charges, and Expenses of Successful Party . Notwithstanding any limitations of Sections 3(c), 4 and 5 above, to the extent that the Indemnitee has been successful, on the merits or otherwise, in whole or in part, in defense of any Proceeding, or in defense of any claim, issue, or matter therein, including, without limitation, the dismissal of any action without prejudice, or if it is ultimately determined, by final judicial decision of a court of competent jurisdiction from which there is no further right to appeal, that the Indemnitee is otherwise entitled to be indemnified against Expenses or the amount of any judgments, fines, ERISA excise taxes, or penalties actually levied against the Indemnitee, or any amounts paid in settlement by or on behalf of the Indemnitee, the Company shall indemnify the Indemnitee from and against all such Expenses actually and reasonably incurred by or on behalf of the Indemnitee in connection therewith and, to the fullest extent permitted by the DGCL, all such judgments, fines, ERISA excise taxes, or penalties actually levied against the Indemnitee, or any amounts paid in settlement by or on behalf of the Indemnitee.
7. Partial Indemnification . If the Indemnitee is entitled under any provision of this Agreement or otherwise to indemnification by the Company for some or a portion of the expense, liability, and loss (including judgments, fines, ERISA excise taxes or penalties, amounts paid in settlement by or on behalf of the Indemnitee, and Expenses) actually and reasonably incurred by or on behalf of the Indemnitee in connection with any Proceeding, or in connection with any judicial proceeding pursuant to Section 11 to enforce rights under this Agreement, but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify the Indemnitee for the portion of such expense, liability, and loss (including judgments, fines, ERISA excise taxes or penalties, amounts paid in settlement by or on behalf of the Indemnitee, and Expenses) actually and reasonably incurred to which the Indemnitee is entitled.
8. Indemnification for Expenses as a Witness . Notwithstanding any other provision of this Agreement, to the maximum extent permitted by the DGCL, as the same exists or may hereafter be amended, but only to the extent that any such amendments expand the rights of the Indemnitee, the Company shall indemnify the Indemnitee from and against all Expenses actually and reasonably incurred by or on behalf of the Indemnitee if the Indemnitee appears as a witness, is legally compelled or asked to respond to discovery requests, or otherwise incurs legal expenses as a result of or related to the Indemnitee’s service as a director, officer, employee, agent, manager, fiduciary, or trustee of the Company or service at the request of the Company as a director, officer, employee, agent, manager, fiduciary or trustee of another corporation, partnership, limited liability company, joint venture, trust, or any other enterprise, including service with respect to an employee benefit plan, in any threatened, pending, or completed action, suit, arbitration, alternative dispute mechanism, inquiry, judicial, administrative, or legislative hearing, investigation, or any other threatened, pending, or completed proceeding, whether of a civil, criminal, administrative, legislative, investigative, or other nature, that is not a Proceeding.
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9. Determination of Entitlement to Indemnification . To receive indemnification under this Agreement the Indemnitee shall submit a written request to the Company. Such request shall include the documentation or information that is reasonably available to the Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. Upon receipt by the Company of a written request by the Indemnitee for indemnification pursuant to Sections 4 or 5, the entitlement of the Indemnitee to indemnification pursuant to such Sections, to the extent not previously determined pursuant to the terms of this Agreement, shall be determined by the following person or persons who shall be empowered to make such determination: (a) the Board of Directors of the Company by a majority vote of Disinterested Directors, whether or not such majority constitutes a quorum; (b) a committee of Disinterested Directors designated by a majority vote of such directors, whether or not such majority constitutes a quorum; (c) if (i) there are no Disinterested Directors, (ii) the Disinterested Directors so direct or (iii) the Indemnitee so requests, Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the Indemnitee; or (d) in the event that a Change in Control has occurred, Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the Indemnitee. Such Independent Counsel shall be selected by the Board of Directors and approved by the Indemnitee, except that in the event that a Change in Control has occurred, Independent Counsel shall be selected by the Indemnitee. Upon failure of the Board of Directors to so select such Independent Counsel or upon failure of the Indemnitee so to approve (or so to select, in the event a Change in Control has occurred), such Independent Counsel shall be selected upon application to a court of competent jurisdiction. The determination of entitlement to indemnification shall be made and, unless a contrary determination is made, such indemnification shall be paid in full by the Company not later than 30 calendar days after receipt by the Company from the Indemnitee of a written request for indemnification. If the person making such determination shall determine that the Indemnitee is entitled to indemnification as to part (but not all) of the application for indemnification, such person shall reasonably prorate such partial indemnification among the claims, issues, or matters at issue at the time of the determination. Notwithstanding Section 16, any reasonable Expenses incurred by the Indemnitee in cooperating with the person making such determination shall be advanced by the Company (irrespective of the determination as to the Indemnitee’s entitlement to indemnification) and the Company is liable to indemnify and hold the Indemnitee harmless therefrom. All expenses of the person making such determination shall be borne by the Company (irrespective of the determination as to the Indemnitee’s entitlement to indemnification). For the avoidance of doubt, the Company’s entry into this Agreement evidences the Board of Directors’ (i) approval of the procedures set forth in this Section 9, (ii) agreement and acknowledgment that the procedures set forth in this Section 9 satisfy the requirements of Section 3 of Article VIII of the By-laws, as such provision may be amended from time to time, and (iii) agreement and acknowledgment that the procedures set forth in this Section 9 constitute the sole procedure for determining the Indemnitee’s entitlement to indemnification.
10. Presumptions and Effect of Certain Proceedings . The Secretary of the Company shall, promptly upon receipt of the Indemnitee’s written request for indemnification, advise in writing the Board of Directors or such other person or persons empowered to make the determination as provided in Section 9 that the Indemnitee has made such request for indemnification. In connection with the determination with respect to the Indemnitee’s entitlement to indemnification hereunder by any person, including a court:
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(a) the Indemnitee shall be presumed to be entitled to indemnification hereunder and the Company or any person making a determination pursuant to Section 9 shall have the burden of proof in making any determination contrary to such presumption;
(b) The termination of any Proceeding described in Sections 4 or 5 by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself (i) create a presumption that the Indemnitee did not act in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, or with respect to any criminal Proceeding, had reasonable cause to believe his or her conduct was unlawful or (ii) otherwise adversely affect the rights of the Indemnitee to indemnification except as may be provided herein;
(c) the Indemnitee will be deemed to have acted in good faith if the Indemnitee’s action or inaction is based on the records or books of account of the Company or applicable entity, including financial statements, or on information supplied to the Indemnitee by the officers, employees, or committees of the board of directors of the Company or applicable entity, or on information or records given in reports made to the Company or applicable entity by an independent certified public accountant or by an appraiser or other expert or advisor selected by the Company or applicable entity; and
(d) the knowledge and/or actions, or failure to act, of any director, officer, employee or agent of the Company or any applicable entity (other than the Indemnitee) will not be imputed to the Indemnitee in a manner that limits or otherwise adversely affects Indemnitee’s rights hereunder.
The provisions of this Section 10 shall not be deemed to be exclusive or limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement. Notwithstanding the foregoing, if the person or persons so empowered to make such determination shall have failed to make the requested determination with respect to indemnification within 30 calendar days after receipt by the Company of such request, a requisite determination of entitlement to indemnification shall be deemed to have been made and the Indemnitee shall be absolutely and unconditionally be entitled to such indemnification, absent actual fraud in the request for indemnification.
11. Remedies of the Indemnitee in Cases of Determination Not to Indemnify or to Advance Expenses; Right to Bring Suit . In the event that a determination is made pursuant to Section 9 that the Indemnitee is not entitled to indemnification hereunder or if payment is not timely made following a determination of entitlement to indemnification pursuant to Sections 9 and 10, or if an advancement of Expenses is not timely made pursuant to Section 16, the Indemnitee may at any time thereafter bring suit against the Company in a court of competent jurisdiction in the State of Delaware seeking an adjudication of entitlement to such indemnification or advancement of Expenses. The Company shall not oppose the Indemnitee’s right to seek any such adjudication. The Company shall be bound by, and shall not have any right to challenge, any determination made by such court that the Indemnitee is entitled to indemnification or to the advancement of Expenses hereunder. The Indemnitee shall be bound by, and shall not have any right to challenge, any determination made by such court that the Indemnitee is not entitled to indemnification or to the advancement of Expenses hereunder. In
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any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an advancement of Expenses), it shall be a defense that the Indemnitee did not act in good faith and in a manner the Indemnitee reasonably believed to be in, or not opposed to the best interests of, the Company and, with respect to any criminal Proceeding, had no reasonable cause to believe his or her conduct was unlawful. Further, in any suit brought by the Company to recover an advancement of Expenses pursuant to Sections 4 or 5, the Company shall be entitled to recover such Expenses upon a final judicial decision of a court of competent jurisdiction from which there is no further right to appeal that the Indemnitee has not met the standard of conduct described above. Neither the failure of the Company (including the Disinterested Directors, a committee of Disinterested Directors or Independent Counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the standard of conduct described above, nor an actual determination by the Company (including the Disinterested Directors, a committee of Disinterested Directors or Independent Counsel) that the Indemnitee has not met the standard of conduct described above shall create a presumption that the Indemnitee has not met the standard of conduct described above, or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an advancement of Expenses hereunder, or brought by the Corporation to recover an advancement of Expenses pursuant to the terms of an undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Section 11 or otherwise shall be on the Company. If a determination is made or deemed to have been made pursuant to the terms of Section 9 or 10 that the Indemnitee is entitled to indemnification, the Company shall be bound by such determination and is precluded from asserting that such determination has not been made or that the procedure by which such determination was made is not valid, binding, and enforceable. The Company further agrees to stipulate in any court pursuant to this Section 11 that the Company is bound by all the provisions of this Agreement and is precluded from making any assertions to the contrary. If the court shall determine that the Indemnitee is entitled to any indemnification or advancement of Expenses hereunder, the Company shall pay all Expenses actually and reasonably incurred by or on behalf of the Indemnitee in connection with such adjudication (including, but not limited to, any appellate proceedings) to the fullest extent permitted by law, and in any suit brought by the Company to recover an advancement of Expenses pursuant to the terms of an undertaking, the Company shall pay all Expenses actually and reasonably incurred by or on behalf of the Indemnitee in connection with such suit to the extent the Indemnitee has been successful, on the merits or otherwise, in whole or in part, in defense of such suit, to the fullest extent permitted by law.
12. Non-Exclusivity of Rights . The rights to indemnification and to the advancement of Expenses provided by this Agreement shall not be deemed exclusive of any other right that the Indemnitee may now or hereafter acquire under any applicable law, agreement, vote of stockholders or Disinterested Directors, provisions of the Certificate of Incorporation or By-laws, or otherwise.
13. Expenses to Enforce Agreement . In the event that the Indemnitee is subject to or intervenes in any action, suit, or proceeding in which the validity or enforceability of this Agreement is at issue or seeks an adjudication to enforce the Indemnitee’s rights under, or to recover damages for breach of, this Agreement, the Indemnitee, if the Indemnitee prevails in
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whole or in part in such action, suit, or proceeding, shall be entitled to recover from the Company and shall be indemnified by the Company against any Expenses actually and reasonably incurred by or on behalf of the Indemnitee in connection therewith.
14. Continuation of Indemnity . All agreements and obligations of the Company contained herein shall continue during the period the Indemnitee is a director, officer, employee, agent, manager, fiduciary or trustee of the Company or while a director, officer, employee, agent, manager, fiduciary or trustee is serving at the request of the Company as a director, officer, employee, agent, manager, fiduciary or trustee of another corporation or of a partnership, limited liability company, joint venture, trust, or any other enterprise, including service with respect to an employee benefit plan, and shall continue thereafter with respect to any possible claims based on the fact that the Indemnitee was a director, officer, employee, agent, manager, fiduciary or trustee of the Company or was serving at the request of the Company as a director, officer, employee, agent, manager, fiduciary or trustee of another corporation or of a partnership, limited liability company, joint venture, trust, or other enterprise, including service with respect to an employee benefit plan. No amendment, alteration or repeal of this Agreement or any provision hereof shall limit or restrict any right of the Indemnitee under this Agreement in respect of any action taken or omitted by the Indemnitee prior to such amendment, alteration or repeal. To the extent that a change in the DGCL (or other applicable law), whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Certificate of Incorporation, By-laws or this Agreement, it is the intent of the parties hereto that the Indemnitee enjoy by this Agreement the greater benefits so afforded by such change. The Indemnitee’s rights under this Agreement are present contractual rights that fully vest upon the Indemnitee’s first service as a director or officer of the Company. This Agreement shall be binding upon all successors and assigns of the Company (including any transferee of all or substantially all of its assets and any successor by merger or operation of law) and shall inure to the benefit of the Indemnitee’s heirs, executors, and administrators.
15. Notification and Defense of Proceeding . Promptly after receipt by the Indemnitee of notice of any Proceeding, the Indemnitee shall, if a request for indemnification or an advancement of Expenses in respect thereof is reasonably likely to be made against the Company under this Agreement, notify the Company in writing of the commencement thereof; but the omission so to notify the Company shall not relieve the Company from any liability that it may have to the Indemnitee. Notwithstanding any other provision of this Agreement, with respect to any such Proceeding of which the Indemnitee notifies the Company:
(a) The Company shall be entitled to participate therein at its own expense;
(b) Except as otherwise provided in this Section 15(b), to the extent that it may wish, the Company, jointly with any other indemnifying party similarly notified, shall be entitled to assume the defense thereof, with counsel satisfactory to the Indemnitee. After notice from the Company to the Indemnitee of its election so to assume the defense thereof, the Company shall not be liable to the Indemnitee under this Agreement for any expenses of counsel subsequently incurred by the Indemnitee in connection with the defense thereof except as otherwise provided below. The Indemnitee shall have the right to employ the Indemnitee’s own counsel in such Proceeding, but the fees and expenses of such counsel incurred after notice from the Company of its assumption of the defense thereof shall be at the expense of the Indemnitee
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unless (i) the employment of counsel by the Indemnitee has been authorized by the Company, (ii) the Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and the Indemnitee in the conduct of the defense of such Proceeding, or (iii) the Company shall not within 60 calendar days of receipt of notice from the Indemnitee in fact have employed counsel to assume the defense of the Proceeding, in each of which cases the fees and expenses of the Indemnitee’s counsel shall be at the expense of the Company. The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company or as to which the Indemnitee shall have made the conclusion provided for in (ii) above;
(c) The Company shall promptly notify the issuer(s) of the Company’s directors ’ and officers ’ liability insurance policy or policies in accordance with the requirements of such policy or policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies; and
(d) The Company shall not be liable to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without the Company’s written consent, or for any judicial or arbitral award if the Company was not given an opportunity, in accordance with this Section 15, to participate in the defense of such Proceeding. The Company shall not settle any Proceeding in any manner that would impose any penalty or limitation on or disclosure obligation with respect to the Indemnitee without the Indemnitee’s written consent. Neither the Company nor the Indemnitee shall unreasonably withhold its consent to any proposed settlement.
16. Advancement of Expenses . At the request of the Indemnitee, all Expenses incurred by or on behalf of the Indemnitee in defending or participating in any Proceeding shall be paid by the Company on an as incurred basis in advance of the final disposition of any related Proceeding, regardless of whether the Indemnitee will ultimately be entitled to be indemnified for such Expenses. To receive an advancement of Expenses under this Agreement, the Indemnitee shall submit a written request to the Company. Such request shall reasonably evidence the Expenses incurred by or on behalf of the Indemnitee and shall include or be accompanied by an undertaking, by or on behalf of the Indemnitee, to repay all amounts so advanced if it shall ultimately be determined, by final judicial decision of a court of competent jurisdiction from which there is no further right to appeal, that the Indemnitee is not entitled to be indemnified for such Expenses by the Company as provided by this Agreement or otherwise. The Indemnitee’s undertaking to repay any such amounts is not required to be secured and such advanced amounts shall not bear interest. The Company shall not impose on the Indemnitee additional conditions to advancement or require from the Indemnitee additional undertakings regarding repayment. Each such advancement of Expenses shall be made within 20 calendar days after the receipt by the Company of such written request. The Indemnitee’s entitlement to Expenses under this Agreement shall include those incurred in connection with any action, suit, or proceeding by or on behalf of the Indemnitee seeking an adjudication pursuant to Section 11 of this Agreement (including the enforcement of this provision) to the extent the court shall determine that the Indemnitee is entitled to an advancement of Expenses hereunder. Notwithstanding the foregoing, the Company shall not advance or continue to advance Expenses to the Indemnitee if a determination is reasonably made in good faith that the facts known at the
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time such determination is made demonstrate clearly and convincingly that the Indemnitee acted in bad faith and in a manner that the Indemnitee did not believe to be in, or not opposed to, the best interests of the Company, or, with respect to any criminal Proceeding, that the Indemnitee had reasonable cause to believe his or her conduct was unlawful. Such determination shall be made: (i) by the Board of Directors of the Company by a majority vote of Disinterested Directors, whether or not such majority constitutes a quorum; (ii) by a committee of Disinterested Directors designated by a majority vote of such directors, whether or not such majority constitutes a quorum; (iii) if (a) there are no Disinterested Directors, (b) the Disinterested Directors so direct or (c) the Indemnitee so requests, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the Indemnitee; or (iv) in the event that a Change in Control has occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the Indemnitee. The Company shall not seek from a court, or agree to, a “bar order” which would have the effect of prohibiting or limiting the Indemnitee’s rights to receive advancement of expenses under this Agreement.
17. Contribution . If (i) the Indemnitee is entitled to indemnification under the DGCL and this Agreement and (ii) the indemnification provided for in this Agreement is unavailable due to a conflicting statutory scheme, the Company, in lieu of indemnifying the Indemnitee, shall contribute to the Indemnitee the amount of any judgments, fines, ERISA excise taxes or penalties, amounts paid in settlement by or on behalf of the Indemnitee, and Expenses to which the Indemnitee is entitled under the DGCL and this Agreement and that is unavailable due to such conflicting statutory scheme.
18. Insurance . To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents or fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies.
19. Severability; Prior Indemnification Agreements . If any provision or provisions of this Agreement shall be held to be invalid, illegal, or unenforceable for any reason whatsoever, (a) the validity, legality, and enforceability of the remaining provisions of this Agreement (including, without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal, or unenforceable, that are not by themselves invalid, illegal, or unenforceable) shall not in any way be affected or impaired thereby, and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal, or unenforceable, that are not themselves invalid, illegal, or unenforceable) shall be construed so as to give effect to the intent of the parties that the Company provide protection to the Indemnitee to the fullest enforceable extent. This Agreement shall supersede and replace any prior indemnification agreements entered into by and between the Company and the Indemnitee and any such prior agreements shall be terminated upon execution of this Agreement.
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20. Headings; References; Pronouns . The headings of the sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. References herein to section numbers are to sections of this Agreement. All pronouns and any variations thereof shall be deemed to refer to the singular or plural as appropriate.
21. Other Provisions .
(a) This Agreement and all of the rights and duties of the parties to this Agreement arising from or relating in any way to the subject matter of this Agreement, including any claims, shall be governed by, construed and enforced in accordance with, the internal laws of the State of Delaware, without regard to the laws of any other jurisdiction that might be applied because of conflicts of laws principles of the State of Delaware.
(b) This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party.
(c) This Agreement shall not be deemed an employment contract between the Company and any Indemnitee who is an officer of the Company, and, if the Indemnitee is an officer of the Company, the Indemnitee specifically acknowledges that the Indemnitee may be discharged at any time for any reason, with or without cause, and with or without severance compensation, except as may be otherwise provided in a separate written contract between the Indemnitee and the Company.
(d) In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.
(e) This Agreement may not be amended, modified, or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each party. No failure or delay of either party in exercising any right or remedy hereunder shall operate as a waiver thereof, and no single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, shall preclude any other or further exercise thereof or the exercise of any other right or power.
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IN WITNESS WHEREOF, the Company and the Indemnitee have caused this Agreement to be executed as of the date first written above.
| COTY INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| Indemnitee | ||
Exhibit 10.25
AGREEMENT REGARDING INDEMNIFICATION OBLIGATIONS
THIS AGREEMENT REGARDING INDEMNIFICATION OBLIGATIONS (this “ Agreement ”), is entered as of April 14, 2011 and is effective as of January 25, 2011, by and among Coty Inc., a Delaware corporation (the “ Company ”), Berkshire Fund VII Investment Corp., Berkshire Fund VII-A Investment Corp., Berkshire Investors III LLC, Berkshire Investors IV LLC (with Berkshire Fund VII Investment Corp., Berkshire Fund VII-A Investment Corp. and Berkshire Investors III LLC., each, a “ Berkshire Stockholder ” and together, the “ Berkshire Stockholders ”) and Bradley Bloom (the “ Berkshire Designee ”).
RECITALS
WHEREAS, pursuant to and in accordance with the terms of the Stockholders Agreement, dated as of January 25, 2011, by and among the Company, the Berkshire Stockholders, Donata Holding SE, Donata Holdings BV, Worldwide Beauty Onshore L.P. and Worldwide Beauty Offshore L.P., the Berkshire Stockholders are entitled to designate one director of the Board of Directors of the Company;
WHEREAS, the Company (a) has indemnification and advancement provisions in favor of its directors in Article VIII of its Amended and Restated Certificate of Incorporation (the “ Certificate of Incorporation ”) and Article VIII of its Second Amended and Restated By-laws (the “ By-laws ”), (b) is entering into an indemnification agreement, effective as of January 25, 2011, with the Berkshire Designee with respect to his or her service on the Board of Directors (the “ Indemnification Agreement ”), and (c) maintains directors’ and officers’ liability insurance; and
WHEREAS, the Company acknowledges that the Berkshire Designee has certain rights to indemnification, advancement of expenses and/or insurance provided by the Berkshire Stockholders and their affiliates in connection with the Berkshire Designee’s activities on behalf of the Berkshire Stockholders and their affiliates, including acting as a director of a current or former portfolio company, that the Company and the Berkshire Stockholders and their affiliates intend to be secondary to the primary obligation of the Company to indemnify the Berkshire Designee pursuant to and in accordance with the terms of the Indemnification Agreement.
AGREEMENT
In consideration of the foregoing, the mutual covenants contained herein and other good and valuable consideration (the receipt, adequacy and sufficiency of which are hereby acknowledged by the parties by their execution hereof), the parties agree as follows.
1. Indemnification and Advancement Obligations . The Company agrees (a) to indemnify and advance expenses to the Berkshire Designee in accordance with Article VIII (or any successor provision) of the Certificate of Incorporation, Article VIII (or any successor provision) of the By-laws and the terms and conditions of the Indemnification Agreement, (b) to pay indemnification and advance expenses to the Berkshire Designee on a timely basis and in any event within the time frames specified in the Indemnification Agreement and (c) otherwise
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to comply with Article VIII (or any successor provision) of the Certificate of Incorporation, Article VIII (or any successor provision) of the By-laws and the terms and conditions of the Indemnification Agreement.
2. Primary Responsibility . The Company hereby acknowledges that the Berkshire Designee has certain rights to indemnification, advancement of expenses and/or insurance provided by the Berkshire Stockholders and their affiliates in connection with the Berkshire Designee’s activities on behalf of the Berkshire Stockholders and their affiliates, including acting as a director of a current or former portfolio company, that the Company and the Berkshire Stockholders and their affiliates intend to be secondary to the primary obligation of the Company to indemnify the Berkshire Designee pursuant to and in accordance with the terms of the Indemnification Agreement. The Company acknowledges and agrees that, as a result of its obligations under the Certificate of Incorporation, By-laws and the Indemnification Agreement, (a) the Company is the indemnitor of first resort and the Company is wholly and primarily responsible for the payment of any and all indemnification, and the advancement of any and all expenses, to which the Berkshire Designee is entitled under the Certificate of Incorporation, the By-laws or the Indemnification Agreement, or otherwise pursuant to any rights that the Company has granted to the Berkshire Designee in connection with the Berkshire Designee’s service on the Board of Directors of the Company, and any obligation of the Berkshire Stockholders and their affiliates to advance expenses or to provide indemnification for the same expenses or liabilities incurred by the Berkshire Designee are secondary, (b) the Company shall be required to advance the full amount of expenses incurred by the Berkshire Designee and its affiliates and shall be liable for the full amount of all Expenses to the extent legally permitted and as required by the terms of the Indemnification Agreement and the Certificate of Incorporation and By-laws of the Company (or other any other agreement between the Company and the Berkshire Designee), without regard to any rights Indemnitee may have against the Berkshire Stockholders and their affiliates, (c) any such indemnification and expenses shall be paid by or on behalf of the Company, and (d) the Company it irrevocably waives, relinquishes and releases the Berkshire Stockholders and their affiliates from any and all claims against the Berkshire Stockholders or their affiliates for contribution, reimbursement, subrogation, set-off, exoneration or otherwise from any of the Berkshire Stockholders or any affiliate thereof for amounts paid in respect thereof. The Company further agrees that no advancement or payment by the Berkshire Stockholders or their affiliates on behalf of the Berkshire Designee with respect to any claim for which the Berkshire Designee has sought indemnification from the Company shall affect the foregoing and the Berkshire Stockholders shall be subrogated to all of the rights of recovery of the Berkshire Designee against the Company. The Company and Berkshire Designee agree that the Berkshire Stockholders and their affiliates are express third party beneficiaries of the terms of this Section 2.
3. Indemnification by the Company . The Company agrees to indemnify, reimburse and hold harmless each of the Berkshire Stockholders or any of its affiliates for any and all amounts for which the Company is wholly and primarily responsible under Section 1 or 2 hereof in the event that any of the Berkshire Stockholders or any of its affiliates actually pays any such amounts for any reason to or on behalf of the Berkshire Designee. Any and all amounts paid by an insurance provider pursuant to a policy maintained by any of the Berkshire Stockholders or an affiliate thereof (other than the Company) shall be deemed amounts paid by such Berkshire Stockholder for purposes of this Agreement.
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4. Waiver . Neither the failure nor any delay by any party in exercising any right, power, or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable legal requirements, (a) no waiver that may be given by a party will be applicable except in the specific instance for which it is given, and (b) no notice to or demand on one party will be deemed to be a waiver of any right of the party giving such notice or demand to take further action without notice or demand.
5. Entire Agreement; Amendment . This Agreement supersedes all prior agreements between the parties with respect to its subject matter and, along with the Indemnification Agreement, Certificate of Incorporation and By-laws, constitute a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. This Agreement may not be amended except by a written agreement executed by the parties.
6. Assignment . This Agreement, and the rights, interests and obligations hereunder, will not be assigned by any party by operation of law or otherwise without the express written consent of the other party (which consent may be granted or withheld in the sole and absolute discretion of such other party); provided, that, without the consent of the Company, the Berkshire Stockholders may assign their rights, interests and obligations hereunder to one or more of their affiliates or successors. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.
7. Governing Law . This Agreement and all of the rights and duties of the parties to this Agreement arising from or relating in any way to the subject matter of this Agreement, including any claims, shall be governed by, construed and enforced in accordance with, the internal laws of the State of Delaware, without regard to the laws of any other jurisdiction that might be applied because of conflicts of laws principles of the State of Delaware.
8. Consent to Jurisdiction; Venue . All actions and proceedings arising out of or relating to this Agreement will be heard and determined in the courts of the State of Delaware, and the parties hereby irrevocably submit to the exclusive jurisdiction of such courts in any such action or proceeding and irrevocably waive the defense of an inconvenient forum to the maintenance of any such action or proceeding. The parties hereby consent to service of process by mail or any other manner permitted by applicable legal requirements.
9. Jury Trial Waiver . THE PARTIES HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY OR THEIR RESPECTIVE REPRESENTATIVES IN THE NEGOTIATION OR PERFORMANCE HEREOF.
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10. Counterparts; Facsimile Signatures . This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or other telecommunications mechanism will be effective as delivery of a manually executed counterpart of this Agreement. For purposes of this Agreement, a document (or signature page thereto) signed and transmitted by facsimile machine, telecopier, or electronically scanned and transmitted in a .pdf file format is to be treated as an original document. The signature of any party thereon, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature on an original document. At the request of any party, any facsimile, or electronically scanned document is to be re executed in original form by the parties who executed the facsimile, telecopy or electronically scanned document. No party may raise the use of a facsimile machine, telecopier or electronic transmission permitted in this Section 10 or the fact that any signature was transmitted through the use of a facsimile, telecopier machine or electronically in a .pdf file format as a defense to the enforcement of this Agreement or any amendment or other document executed in compliance with this Section 10.
11. No Third Party Beneficiaries . Except as set forth in Section 2, this Agreement is for the sole benefit of the parties, their permitted assigns and the affiliates (other than the Company) of the Berkshire Stockholders and nothing herein, express or implied, is intended to or will confer upon any other person or entity any legal or equitable benefit, claim, cause of action, remedy or right of any kind.
* * *
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IN WITNESS WHEREOF , the parties have caused this Agreement to be executed in counterparts all effective as of the day and year first above written.
| COTY, INC. | |||
| By: | /s/ Jules Kaufman | ||
| Name: | Jules Kaufman | ||
| Title: | S.V.P., General Counsel & Secretary | ||
| BERKSHIRE FUND VII INVESTMENT CORP. | |||
| By: | /s/ Bradley M. Bloom | ||
| Name: | Bradley M. Bloom | ||
| Title: | Treasurer | ||
| BERKSHIRE FUND VII-A INVESTMENT CORP. | |||
| By: | /s/ Bradley M. Bloom | ||
| Name: | Bradley M. Bloom | ||
| Title: | Treasurer | ||
| BERKSHIRE INVESTORS III LLC | |||
| By: | /s/ Bradley M. Bloom | ||
| Name: | Bradley M. Bloom | ||
| Title: | Managing Director | ||
| BERKSHIRE INVESTORS IV LLC | |||
| By: | /s/ Bradley M. Bloom | ||
| Name: | Bradley M. Bloom | ||
| Title: | Managing Director | ||
| BERKSHIRE DESIGNEE | |||
| By: | /s/ Bradley M. Bloom | ||
| Name: | Bradley Bloom | ||
Signature Page to Agreement Regarding Indemnification Obligations
Exhibit 10.26
AGREEMENT REGARDING INDEMNIFICATION OBLIGATIONS
THIS AGREEMENT REGARDING INDEMNIFICATION OBLIGATIONS (this “ Agreement ”), is entered as of April 14, 2011 and is effective as of January 25, 2011, by and among Coty Inc., a Delaware corporation (the “ Company ”), Worldwide Beauty Onshore L.P., Worldwide Beauty Offshore L.P. (with Worldwide Beauty Onshore L.P., each, a “ WB Fund Stockholder ” and together, the “ WB Fund Stockholders ”) and Steven Langman (the “ WB Designee ”).
RECITALS
WHEREAS, pursuant to and in accordance with the terms of the Stockholders Agreement, dated as of January 25, 2011, by and among the Company, the WB Fund Stockholders, Donata Holding SE, Donata Holdings BV, Berkshire Fund VII Investment Corp., Berkshire Fund VII-A Investment Corp., Berkshire Investors III LLC and Berkshire Investors IV LLC, the WB Fund Stockholders are entitled to designate one director of the Board of Directors of the Company;
WHEREAS, the Company (a) has indemnification and advancement provisions in favor of its directors in Article VIII of its Amended and Restated Certificate of Incorporation (the “ Certificate of Incorporation ”) and Article VIII of its Second Amended and Restated By-laws (the “ By-laws ”), (b) is entering into an indemnification agreement, effective as of January 25, 2011, with the WB Designee with respect to his or her service on the Board of Directors (the “ Indemnification Agreement ”), and (c) maintains directors’ and officers’ liability insurance; and
WHEREAS, the Company acknowledges that the WB Designee has certain rights to indemnification, advancement of expenses and/or insurance provided by the WB Fund Stockholders and their affiliates in connection with the WB Designee’s activities on behalf of the WB Fund Stockholders and their affiliates, including acting as a director of a current or former portfolio company, that the Company and the WB Fund Stockholders and their affiliates intend to be secondary to the primary obligation of the Company to indemnify the WB Designee pursuant to and in accordance with the terms of the Indemnification Agreement.
AGREEMENT
In consideration of the foregoing, the mutual covenants contained herein and other good and valuable consideration (the receipt, adequacy and sufficiency of which are hereby acknowledged by the parties by their execution hereof), the parties agree as follows.
1. Indemnification and Advancement Obligations . The Company agrees (a) to indemnify and advance expenses to the WB Designee in accordance with Article VIII (or any successor provision) of the Certificate of Incorporation, Article VIII (or any successor provision) of the By-laws and the terms and conditions of the Indemnification Agreement, (b) to pay indemnification and advance expenses to the WB Designee on a timely basis and in any event within the time frames specified in the Indemnification Agreement and (c) otherwise to comply with Article VIII (or
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any successor provision) of the Certificate of Incorporation, Article VIII (or any successor provision) of the By-laws and the terms and conditions of the Indemnification Agreement.
2. Primary Responsibility . The Company hereby acknowledges that the WB Designee has certain rights to indemnification, advancement of expenses and/or insurance provided by the WB Fund Stockholders and their affiliates in connection with the WB Designee’s activities on behalf of the WB Fund Stockholders and their affiliates, including acting as a director of a current or former portfolio company, that the Company and the WB Fund Stockholders and their affiliates intend to be secondary to the primary obligation of the Company to indemnify the WB Designee pursuant to and in accordance with the terms of the Indemnification Agreement. The Company acknowledges and agrees that, as a result of its obligations under the Certificate of Incorporation, By-laws and the Indemnification Agreement, (a) the Company is the indemnitor of first resort and the Company is wholly and primarily responsible for the payment of any and all indemnification, and the advancement of any and all expenses, to which the WB Designee is entitled under the Certificate of Incorporation, the By-laws or the Indemnification Agreement, or otherwise pursuant to any rights that the Company has granted to the WB Designee in connection with the WB Designee’s service on the Board of Directors of the Company, and any obligation of the WB Fund Stockholders and their affiliates to advance expenses or to provide indemnification for the same expenses or liabilities incurred by the WB Designee are secondary, (b) the Company shall be required to advance the full amount of expenses incurred by the WB Designee and its affiliates and shall be liable for the full amount of all Expenses to the extent legally permitted and as required by the terms of the Indemnification Agreement and the Certificate of Incorporation and By-laws of the Company (or other any other agreement between the Company and the WB Designee), without regard to any rights Indemnitee may have against the WB Fund Stockholders and their affiliates, (c) any such indemnification and expenses shall be paid by or on behalf of the Company, and (d) the Company it irrevocably waives, relinquishes and releases the WB Fund Stockholders and their affiliates from any and all claims against the WB Fund Stockholders or their affiliates for contribution, reimbursement, subrogation, set-off, exoneration or otherwise from any of the WB Fund Stockholders or any affiliate thereof for amounts paid in respect thereof. The Company further agrees that no advancement or payment by the WB Fund Stockholders or their affiliates on behalf of the WB Designee with respect to any claim for which the WB Designee has sought indemnification from the Company shall affect the foregoing and the WB Fund Stockholders shall be subrogated to all of the rights of recovery of the WB Designee against the Company. The Company and WB Designee agree that the WB Fund Stockholders and their affiliates are express third party beneficiaries of the terms of this Section 2.
3. Indemnification by the Company . The Company agrees to indemnify, reimburse and hold harmless each of the WB Fund Stockholders or any of its affiliates for any and all amounts for which the Company is wholly and primarily responsible under Section 1 or 2 hereof in the event that any of the WB Fund Stockholders or any of its affiliates actually pays any such amounts for any reason to or on behalf of the WB Designee. Any and all amounts paid by an insurance provider pursuant to a policy maintained by any of the WB Fund Stockholders or an affiliate thereof (other than the Company) shall be deemed amounts paid by such WB Fund Stockholder for purposes of this Agreement.
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4. Waiver . Neither the failure nor any delay by any party in exercising any right, power, or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable legal requirements, (a) no waiver that may be given by a party will be applicable except in the specific instance for which it is given, and (b) no notice to or demand on one party will be deemed to be a waiver of any right of the party giving such notice or demand to take further action without notice or demand.
5. Entire Agreement; Amendment . This Agreement supersedes all prior agreements between the parties with respect to its subject matter and, along with the Indemnification Agreement, Certificate of Incorporation and By-laws, constitute a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. This Agreement may not be amended except by a written agreement executed by the parties.
6. Assignment . This Agreement, and the rights, interests and obligations hereunder, will not be assigned by any party by operation of law or otherwise without the express written consent of the other party (which consent may be granted or withheld in the sole and absolute discretion of such other party); provided, that, without the consent of the Company, the WB Fund Stockholders may assign their rights, interests and obligations hereunder to one or more of their affiliates or successors. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.
7. Governing Law . This Agreement and all of the rights and duties of the parties to this Agreement arising from or relating in any way to the subject matter of this Agreement, including any claims, shall be governed by, construed and enforced in accordance with, the internal laws of the State of Delaware, without regard to the laws of any other jurisdiction that might be applied because of conflicts of laws principles of the State of Delaware.
8. Consent to Jurisdiction; Venue . All actions and proceedings arising out of or relating to this Agreement will be heard and determined in the courts of the State of Delaware, and the parties hereby irrevocably submit to the exclusive jurisdiction of such courts in any such action or proceeding and irrevocably waive the defense of an inconvenient forum to the maintenance of any such action or proceeding. The parties hereby consent to service of process by mail or any other manner permitted by applicable legal requirements.
9. Jury Trial Waiver . THE PARTIES HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY OR THEIR RESPECTIVE REPRESENTATIVES IN THE NEGOTIATION OR PERFORMANCE HEREOF.
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10. Counterparts; Facsimile Signatures . This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or other telecommunications mechanism will be effective as delivery of a manually executed counterpart of this Agreement. For purposes of this Agreement, a document (or signature page thereto) signed and transmitted by facsimile machine, telecopier, or electronically scanned and transmitted in a .pdf file format is to be treated as an original document. The signature of any party thereon, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature on an original document. At the request of any party, any facsimile, or electronically scanned document is to be re executed in original form by the parties who executed the facsimile, telecopy or electronically scanned document. No party may raise the use of a facsimile machine, telecopier or electronic transmission permitted in this Section 10 or the fact that any signature was transmitted through the use of a facsimile, telecopier machine or electronically in a .pdf file format as a defense to the enforcement of this Agreement or any amendment or other document executed in compliance with this Section 10.
11. No Third Party Beneficiaries . Except as set forth in Section 2, this Agreement is for the sole benefit of the parties, their permitted assigns and the affiliates (other than the Company) of the WB Fund Stockholders and nothing herein, express or implied, is intended to or will confer upon any other person or entity any legal or equitable benefit, claim, cause of action, remedy or right of any kind.
* * *
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IN WITNESS WHEREOF , the parties have caused this Agreement to be executed in counterparts all effective as of the day and year first above written.
| COTY, INC. | |||
| By: | /s/ Jules Kaufman | ||
| Name: | Jules Kaufman | ||
| Title: | S.V.P., General Counsel & Secretary | ||
| WORLDWIDE BEAUTY ONSHORE L.P. | |||
| By: | /s/ M. Allison Steiner | ||
| Name: | M. Allison Steiner | ||
| Title: | Authorized Signatory | ||
| WORLDWIDE BEAUTY OFFSHORE L.P. | |||
| By: | /s/ M. Allison Steiner | ||
| Name: | M. Allison Steiner | ||
| Title: | Authorized Signatory | ||
| WB DESIGNEE | |||
| By: | /s/ Steven Langman | ||
| Name: | Steven Langman | ||
Signature Page to Agreement Regarding Indemnification Obligations
Exhibit 10.27
COTY INC.
ANNUAL PERFORMANCE PLAN
(As Amended and Restated April 8, 2013)
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SECTION 1. Purpose . The purpose of the Coty Inc. Annual Performance Plan, as Amended and Restated on April 8, 2013 (the “Plan”) is to promote the profitability of Coty Inc., its subsidiaries and affiliates (the “Company”) by providing senior executives and top line managers with incentive awards based on the achievement of annual goals that are aimed at increasing shareholder value. The effective date of this Plan is the Effective Date. |
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SECTION 2. Definitions . For the purposes of the Plan, the following terms shall have the meanings indicated: |
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“Affiliate” shall mean (i) any entity that, directly or indirectly, controls or is controlled by the Company and (ii) any entity in which the Company has a significant equity or other ownership interest, in either case as determined by the Committee. |
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“Award” shall mean the grant of an award by the Committee to a Participant. An Award shall represent the opportunity to qualify for an Incentive Award in accordance with the terms of the Plan. |
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“Award Year” shall mean any fiscal year with respect to the Company’s performance in which an Award is granted, or such other 12-month period as determined by the Committee. The first Award Year for which an Incentive Award may be earned under this Plan is with respect to the Company’s fiscal year beginning July 1, 2013 and ending June 30, 2014. |
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“Base Salary” shall mean a Participant’s annual salary rate in effect at the end of an Award Year. |
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“Board” shall mean the Board of Directors of the Company. |
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“Cause” shall have the meaning set forth in any employment, severance or other agreement between the Company or an Affiliate and the Participant. If there is no employment, severance or other agreement between the Company or an Affiliate and the Participant, or if such agreement does not define “Cause,” then “Cause” shall mean the occurrence of any of the following, as determined by the Committee in its sole discretion: |
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(A) a Participant’s willful and continued failure substantially to perform his duties (other than as a result of total or partial incapacity due to physical or mental illness or as a result of voluntary termination of employment by such Participant) which failure continues for more than 30 days after receipt by the Participant of written notice setting forth the facts and circumstances identified by the Company as constituting adequate grounds for termination under this clause (A), |
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(B) any willful act or omission by a Participant constituting dishonesty, fraud or other malfeasance, and any act or omission by a Participant constituting |
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immoral conduct, which in any such case is injurious to the financial condition or business reputation of the Company or any of its Affiliates, |
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(C) a Participant’s indictment for a felony under the laws of the United States or any state thereof or a similar event in any other jurisdiction in which the Company or its Affiliates conduct business, or |
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(D) a Participant’s breach of any restrictive covenants by which he or she is bound. |
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For purposes of this definition, no act or failure to act shall be deemed “willful” unless effected by a Participant not in good faith and without a reasonable belief that such action or failure to act was in or not opposed to the Company’s best interests. |
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“Change in Control” shall be deemed to have occurred if: |
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(A) |
Any Person or “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) that is not the Majority Shareholder is or becomes the “beneficial owner” (as defined below), directly or indirectly, of securities representing either (i) more than 50% of the combined voting power of the Company’s then outstanding securities, or (ii) 20% or more of the combined voting power of the Company’s then outstanding securities at a time when the Majority Shareholder holds less than 30% of such combined voting power. For purposes of this clause (A), “beneficial owner” has the meaning given that term in Rule 13d-3 under the Exchange Act, except that a Person shall be deemed to be the “beneficial owner” of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants, options or otherwise, without regard to the 60-day period referred to in such Rule; |
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(B) |
Individuals who constitute the Board on the Restatement Effective Date (the “ Incumbent Board ”) cease for any reason to constitute at least a majority thereof, provided, that any Person becoming a director subsequent to such date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least three-quarters of the directors then comprising the Incumbent Board shall be, for purposes of this clause (B), considered as though such Person were a member of the Incumbent Board; and provided , further , that this clause (B) shall not apply as long as the Majority Shareholder is the beneficial owner of a majority of the Company’s Common Stock; |
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(C) |
The Majority Shareholder enters into any joint venture, joint operating arrangement, partnership, standstill agreement or other |
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arrangement similar to any of the foregoing with any other Person or group, pursuant to which such Person or group assumes significant operational or managerial control of the Company; or |
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(D) |
The shareholders of the Company approve a plan or agreement providing (i) for a merger or consolidation of the Company other than with a wholly owned subsidiary and other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 51% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (ii) for a sale, exchange or other disposition of all or substantially all of the business or assets of the Company. If any of the events enumerated in this clause (D) occurs, the Board shall determine the effective date of the Change in Control resulting therefrom for purposes of this Plan. |
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“Committee” shall mean the Remuneration and Nominating Committee of the Board or any successor committee with responsibility for compensation, or any subcommittee, as long as the number of Committee members and their qualifications shall at all times be sufficient to meet the independence requirements of the New York Stock Exchange, Inc. or any other applicable exchange on which the Company’s common equity is at the time listed. With respect to any Incentive Award that is intended to qualify as “performance-based compensation” for purposes of Section 162(m), the Committee shall be constituted to comply with the applicable requirements for “outside directors” under Section 162(m). |
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“Determination Date” shall mean the date that is 90 days after the beginning of an Award Year or, if earlier, the date on which no more than 25% of the Award Year has elapsed. |
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“Disability” shall mean either (i) disability as defined for purposes of the Company’s disability benefit plan, or (ii) a Participant’s inability, as a result of physical or mental incapacity, to perform the duties of his or her position(s) for a period of six consecutive months or for an aggregate of six months in any consecutive 12-month period. |
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“Effective Date” means the day immediately prior to the date of the underwritten initial public offering of the Company’s Common Stock pursuant to a registration statement that is declared effective by the SEC, 2013. |
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“Employment Agreement” shall mean, with respect to a Participant, any employment agreement by and between the Company and such Participant as in effect from time to time. |
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“Executive Officer” means any Company employee who is an “executive officer” as defined in Rule 3b-7 promulgated under the Securities Exchange Act of 1934, as amended. |
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“Incentive Award” shall mean the incentive compensation payable to a Participant, as determined by the Committee pursuant to the terms of the Plan. |
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“Majority Shareholder” means (i) the Company’s majority shareholder as of the Effective Date or (ii) a Benckiser Permitted Holder as defined in the Company’s Certificate of Incorporation effective on the Effective Date or any other similarly situated Person as determined by the Committee. |
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“Maximum Award” means, with respect any Participant for any Performance Period, $8,000,000. |
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“Participant” shall mean an Executive Officer or other key employee of the Company selected by the Committee in accordance with Section 4 who receives an Award. |
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“Performance Criteria” shall mean objective criteria selected by the Committee, which may be based on the relative or comparative attainment of one or more of the following criteria during an Award Year, whether in absolute terms or relative to the performance of one or more similarly situated companies or a published index covering the performance of a number of companies: total stockholder return (inclusive or exclusive of dividends paid); stock price; gross, operating or net earnings or margins; approved rate increases; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization (“EBITDA”); EBITDA excluding traditional working media; earnings per share; economic value added; ratio of operating earnings to capital spending; net sales; sales growth; return on assets, capital or equity; income; market share; level of expenses; revenue; revenue growth; cash flow; increases in customer base; capital expenditures; cost reductions and expense control objectives; compliance with environmental or regulatory goals or requirements; conservation; budget objectives; working capital; mergers, acquisitions and divestitures; attainment of objectives measured in terms of quality or safety; talent management; customer complaints or customer satisfaction; and improvements in financial controls; and, in the case of persons who are not Executive Officers, such other criteria as may be determined by the Committee. Performance Criteria may be established on a Company-wide basis or with respect to one or more business units, divisions, subsidiaries, or geographic locations, or on an individual basis. |
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At the time the Committee establishes Performance Criteria for an Award Year, the Committee may exclude any or all “extraordinary items” as determined under U.S. generally accepted accounting principles including, without limitation, the charges or costs associated with restructurings of the Company or any subsidiary, discontinued operations, other unusual or non-recurring items, the cumulative effects of accounting changes or such other objective factors as the Committee deems appropriate. Unless otherwise explicitly stated by the Committee at the time Performance Criteria are established, each applicable performance goal shall be appropriately adjusted for one or |
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more of the following items: (i) asset impairments or write downs; (ii) litigation judgments or claim settlements; (iii) the effect of changes in tax law, accounting principles or such laws or provisions affecting reported results; (iv) accruals for reorganization and restructuring programs; (v) any extraordinary nonrecurring items as described in Accounting Standards Codification (ASC) 225-20 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable year; (vi) the operations of any business acquired by the Company or any affiliate or of any joint venture in which the Company or affiliate participates; (vii) the divestiture of one or more business operations or the assets thereof; or (viii) the costs incurred in connection with such acquisitions or divestitures; and (ix) charges for stock based compensation. |
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Except in the case of Awards to Executive Officers intended to be ‘performance-based compensation’ under Section 162(m), the Committee may at any time adjust the Performance Criteria for any Award Year as it deems equitable. The Committee shall have no obligation to treat Participants uniformly. |
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“Person” means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization or any other entity, whether foreign or domestic, including any governmental entity or any department, agency or political subdivision thereof. |
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“Retirement” shall mean a termination of employment (other than a termination of employment for Cause): |
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(A) after attaining age 60, but only if the Company or the employing Affiliate consents to the treatment of such termination as a “Retirement” for purposes of this Plan; or |
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(B) qualifying as a retirement at normal retirement age under the laws and/or arrangements applicable to the Participant, as reasonably determined by the Committee. |
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“Section 162(m)” means Section 162(m) of the Internal Revenue Code of 1986, as amended, and any regulations or governing authority promulgated thereunder, as in effect from time to time. |
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SECTION 3. Administration . |
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(a) The Plan shall be administered by the Committee, which shall have full authority to interpret the Plan and from time to time to adopt such rules and regulations for carrying out the Plan as it may deem best. |
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(b) All determinations by the Committee shall be made by the affirmative vote of a majority of its members, but any determination reduced to writing and signed by a majority of the members shall be fully as effective as if it had been made at a meeting duly called and held. All decisions by the Committee (or if applicable, the Board) pursuant to the provisions of the Plan shall be final, conclusive and binding on all persons, including the Participants, the Company |
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and shareholders. The Committee may delegate to the Company’s Executive Committee its authority under the Plan with respect to Participants who are not Executive Officers; provided that all such Awards and payments in the aggregate do not exceed the total Awards and payments approved by the Committee for such Participants for the Award Year.
SECTION 4. Eligibility . Subject to the provisions of the Plan, the Committee may select at the outset of each Award Year those Executive Officers, officers or employees (including those who are also directors) of the Company who will be granted Awards under the Plan with respect to such Award Year. No member of the Committee shall be eligible to receive an Award under the Plan.
SECTION 5. Amount and Payment of Incentive Award
(a) No later than the Determination Date, the Committee shall establish the applicable Performance Criteria and relevant levels of achievement that will be used to calculate an Incentive Award, if any, based on a percentage of the Participant’s Base Salary. Such performance levels may be expressed as a target level, minimum level, maximum level, or such other levels as determined by the Board and communicated in writing to the Participant. For avoidance of doubt, electronic transmission shall be considered in writing for all purposes under the Plan.
(b) Within a reasonable time after the close of an Award Year, the Committee (or solely with respect to Participants who are not Executive Officers, the Committee’s delegate, if any) shall determine whether the objective Performance Criteria and applicable levels of achievement established for that Award Year have been met by the respective Participants. If the objective Performance Criteria and any other material terms established by the Committee have been met by a Participant, the Committee shall so certify in writing with respect to such Participant.
(c) If the Committee has made the written certification under Section 5(a) for an Award Year, each Participant to whom the certification applies shall be eligible for an Incentive Award for the Award Year. The Incentive Award for each such Participant shall not exceed the Maximum Award. For any Award Year, however, the Committee shall have sole and absolute discretion to adjust the amount of, or eliminate entirely, the Incentive Award to one or more of the Participants based upon the Committee’s review of the objective performance goals for each Participant; provided, however, that for any Incentive Award that is intended to qualify as “performance-based compensation” under Section 162(m), the Committee shall have discretion to reduce the amount of such Incentive Award or eliminate the Incentive Award entirely, but not to increase the amount of any Award.
(d) Any amounts a Participant has qualified to receive in respect of an Award as determined by the Committee (or, as applicable, its delegate) shall be paid to Participants on or before March 15 of the year immediately following the Award Year. Payment shall be in cash or in shares of Company or Affiliate stock pursuant to a long term incentive compensation plan that has been approved by shareholders.
(e) Participation in the program ends when Participant’s employment ends. Except as otherwise provided in Section 5(f) or in an Employment Agreement or as determined by the
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Committee, the Participant must be actively employed by the Company on the payment date in order to qualify for payment with respect to an Award.
(f) If a Participant’s employment terminates by reason of Retirement, Disability or death, the Participant shall be entitled to payment, at the same time as payment to other Award holders is made, of a prorated Award reflecting the portion of the Award Year during which he or she was employed, based on actual results achieved for such Award Year.
(g) With respect to any Award or portion of an Award that is not to an Executive Officer or not intended to qualify as “performance-based compensation” under Section 162(m), the Committee may determine an Incentive Award based on factors other than Performance Criteria.
SECTION 6. General Provisions .
(a) No portion of any Award under the Plan may be assigned or transferred prior to the payment thereof.
(b) All payments made pursuant to the Plan shall be subject to withholding in respect of income and other taxes required by law to be withheld or to withholding and offset by the Company in respect of any other amounts due and owing the Company by a Participant, in accordance with procedures to be established by the Committee.
(c) The selection of an individual for participation in the Plan shall not give such Participant any right to be retained in the employ of the Company, and the right of the Company to dismiss or discharge any such Participant, or to terminate any arrangement pursuant to which any such Participant provides services to the Company, is specifically reserved. The benefits provided for Participants under the Plan shall be in addition to, and shall in no way preclude, the payment of other forms of compensation to or in respect of such Participants.
(d) The Board and the Committee shall be entitled to rely on the advice of counsel and other experts, including the independent public accountants for the Company. No member of the Board or of the Committee or any officers of the Company shall be liable for any act or failure to act under the Plan.
(e) Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other compensation arrangements, which arrangements may be either generally applicable or applicable only in specific cases.
(f) No member of the Committee or the Board shall participate in any action of the Committee or the Board involving that member.
(g) The Committee may cancel, withhold, defer or reduce the amount to be paid under any Award, and no Participant shall have any contractual right under the Plan to the Award of any amount hereunder, if the Committee determines to do so, in its absolute discretion, for any reason, including but not limited to a breach by a Participant of any agreement with or obligation to the Company.
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(h) Notwithstanding any provision in the Plan to the contrary, Awards granted or paid under the Plan will be subject to recoupment by the Company pursuant to any “clawback” or similar compensation recoupment policy that may be established by the Company.
SECTION 7. Change in Control . Upon a Change in Control of the Company, the Board may, in its discretion, deem Performance Criteria to have been achieved at such level of performance as designated by the Committee with respect to any applicable Performance Criteria under any outstanding Award relating to the Award Year in which the Change in Control occurs. Any such Award shall be paid within five business days following such Change in Control; provided, however, that any such Award shall be reduced by the amount of any comparable benefit to which the Participant would be entitled under applicable law upon termination of employment.
SECTION 8. Amendment and Termination of the Plan . The Board may, at any time or from time to time, terminate, in whole or in part, or amend the Plan. In the event of such termination, in whole or in part, of the Plan, the Board may in its sole discretion direct the payment to Participants of any Awards not theretofore paid out prior to the respective dates upon which payments would otherwise be made hereunder to such Participants, in a lump sum or installments as the Board shall prescribe with respect to each such Participant, as permitted under Section 409A of the Code.
SECTION 9. Governing Law . The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan and any Award shall be determined in accordance with the laws of the State of New York, without regard to its conflicts of laws principles.
SECTION 10. Application of Section 162(m).
(a) The Plan is intended to be administered, interpreted and construed so that Incentive Award payments remain tax deductible to the Company and unlimited by Section 162(m), which restricts under certain circumstances the Federal income tax deduction for compensation paid by a public company to Executive Officers in excess of $1 million per year. As of the Plan’s effective date, the exemption is based on Treasury Regulation Section 1.162-27(f), which generally exempts from the application of Section 162(m) compensation paid pursuant to a plan that existed before a company becomes publicly held. Under such Treasury Regulation, this exemption is available to the Plan for the duration of the period that lasts until the earlier of the expiration or material modification of the Plan or the first meeting of stockholders at which directors are to be elected that occurs after the close of the third calendar year following the calendar year in which the Company first becomes subject to the reporting obligations of Section 12 of the Exchange Act.
(b) To the extent that the Committee determines that the exemption described in Section 10(a) above is no longer available with respect to an Incentive Award, such Incentive Award shall be intended to satisfy the applicable requirements for the performance-based compensation exception under Section 162(m) and shall be contingent upon shareholder approval of the Plan in accordance with Section 162(m), the regulations thereunder and other applicable U.S. Treasury regulations. Unless and until such stockholder approval is obtained, no Incentive Award shall be made under the Plan after the expiration of the exemption described in Section 10(a) above.
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SECTION 11. Duration of the Plan. The Plan is effective as of the Effective Date and shall remain in effect until all Incentive Awards made under the Plan have been paid or forfeited under the terms of the Plan, and all Award Years related to Awards made under the Plan have expired. No Incentive Awards may be made under the Plan for any Award Year that would end after the expiration of the exemption referred to in Section 10, unless the Board, subject to any stockholder approval that may then be required to continue to qualify the Plan as a performance-based plan under Section 162(m), extends this Plan.
SECTION 12. Application of Section 409A. Incentive Awards payable under the Plan are intended to qualify for exemption from or, in the alternative, comply with, Section 409A. The Plan shall be construed and interpreted in accordance with such intent. If any provision of the Plan needs to be revised to satisfy the requirements of Section 409A, then such provision shall be modified or restricted to the extent and in the manner necessary to be in compliance with such requirements of Section 409A and any such modification shall attempt to maintain the same economic results as were intended under the Plan. The Company makes no guarantee that payments under the Plan will satisfy all applicable requirements for exemption from Section 409A. Payments made to a participant under the Plan in error shall be returned to the Company and do not create a legally binding right to such payments.
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Exhibit 10.28
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COTY INC. |
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LONG-TERM INCENTIVE PLAN |
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(as amended and restated April 8, 2013) |
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SECTION 1 |
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PURPOSE AND DURATION |
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1.1 |
Purpose. The purpose of this Coty Inc. Long-Term Incentive Plan is to promote the interests of Coty Inc. and its shareholders by (i) attracting and retaining exceptional executive personnel and other key employees of the Company and its Affiliates; (ii) motivating such employees by means of performance-related incentives to achieve long-range performance goals; and (iii) enabling such employees to participate in the long-term growth and financial success of the Company. |
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1.2 |
Effective Date and Term of the Plan . |
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(a) |
The original effective date of the Plan was December 10, 1996. The effective date of this amended and restated plan document is the Effective Date. |
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(b) |
The Plan will terminate upon the earlier of (i) the date on which all Shares available for issuance under the Plan have been issued pursuant to the exercise of Stock Options or the Award of Shares under the Plan, or (ii) the date specified by action of the Board. Upon such Plan termination, all Awards outstanding under the Plan will continue to have full force and effect in accordance with the terms of the Terms and Conditions evidencing each Award. |
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SECTION 2 |
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DEFINITIONS |
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Whenever used in the Plan, the following terms have the meanings set forth below: |
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2.1 |
“Affiliate” means any entity (i) that, directly or indirectly, is controlled by the Company, or in which the Company has a significant equity interest, and (ii) as to which the Company is an “eligible issuer of service recipient stock” within the meaning of Treas. Reg. 1.409A-1(b)(5)(iii)(E), in any such case as determined by the Committee. |
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2.2 |
“Applicable Fraction” means a fraction, the numerator of which is the number of days elapsed from the Grant Date of an Award to the date of the Participant’s termination of Service and the denominator of which is the number of days between the Grant Date and the date the Award was scheduled to become exercisable or otherwise vest. |
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2.3 |
“Award” means a grant under the Plan to a Participant of a Stock Option, Restricted Stock Award, or Other Stock-Based Award. |
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2.4 |
“Board” means the Board of Directors of the Company. |
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2.5 |
“Business Day” means any day other than a Saturday, Sunday, or legal holiday, or a day on which the national securities exchange that constitutes the principal market for the Shares is closed. |
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2.6 |
“Cause” has the meaning set forth in any employment, severance or other agreement between the Company or an Affiliate and the Participant. If there is no employment, severance or other agreement between the Company or an Affiliate and the Participant, or if such agreement does not define “Cause,” then “Cause” shall mean the occurrence of any of the following, as determined by the Committee in its sole discretion: |
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(a) |
a Participant’s willful and continued failure substantially to perform his or her duties (other than as a result of total or partial incapacity due to physical or mental illness or as a result of termination by such Participant for Good Reason), which failure continues for more than 30 days after receipt by the Participant of written notice setting forth the facts and circumstances identified by the Company as constituting adequate grounds for termination under this clause (a); |
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(b) |
any willful act or omission by a Participant constituting dishonesty, fraud or other malfeasance, and any act or omission by a Participant constituting immoral conduct, which in any such case is injurious to the financial condition or business reputation of the Company or any of its Affiliates; |
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(c) |
a Participant’s indictment for a felony under the laws of the United States or any state thereof or any other jurisdiction in which the Company conducts business; or |
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(d) |
a Participant’s breach of any nonsolicitation, noncompetition, confidentiality, or other restrictive covenant by which he or she is bound. |
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For purposes of this definition, no act or failure to act shall be deemed “willful” unless effected by a Participant not in good faith and without a reasonable belief that such action or failure to act was in or not opposed to the Company’s best interests. |
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2.7 |
“Change in Control” means the occurrence of any of the following: |
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(a) |
Any Person or “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), that is not the Majority Shareholder is or becomes the “beneficial owner” (as defined below), directly or indirectly, of securities representing either (i) more than 50% of the combined voting power of the Company’s then outstanding securities, or (ii) 20% or more of the combined voting power of the Company’s then outstanding securities at a time when the Majority Shareholder holds less than 30% of such combined voting power. For purposes of this clause (a), “beneficial owner” has the meaning given that term in Rule 13d-3 under the Exchange Act, except that a Person shall be deemed to be the “beneficial owner” of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants, options or otherwise, without regard to the 60-day period referred to in such Rule; |
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(b) |
Individuals who constitute the Board on the Restatement Effective Date (the “ Incumbent Board ”) cease for any reason to constitute at least a majority thereof, provided, that any Person becoming a director subsequent to such date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least three-quarters of the directors then comprising the Incumbent Board shall be, for purposes of this clause (b), considered as though such Person were a member of the Incumbent Board; and provided , further , that this clause (b) shall not apply as long as the Majority Shareholder is the beneficial owner of a majority of the voting power of the Company’s outstanding securities; |
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(c) |
The Majority Shareholder enters into any joint venture, joint operating arrangement, partnership, standstill agreement or other arrangement similar to any of the foregoing with any other Person or group, pursuant to which such Person or group assumes significant operational or managerial control of the Company; or |
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(d) |
The shareholders of the Company approve a plan or agreement providing (i) for a merger or consolidation of the Company other than with a wholly owned subsidiary and other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 51% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (ii) for a sale, exchange or other disposition of all or substantially all of the business or assets of the Company. If any of the events enumerated in this clause (d) occurs, the Board shall determine the effective date of the Change in Control resulting therefrom for purposes of this Plan. |
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2.8 |
“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time. |
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2.9 |
“Committee” means the Remuneration and Nominating Committee of the Board or any successor committee with responsibility for compensation, or any subcommittee, as long as the number of Committee members and their qualifications shall at all times be sufficient to meet the independence requirements of the New York Stock Exchange, Inc. or any other applicable exchange on which the Company’s common equity is at the time listed and, as applicable, the requirements for “outside directors” under Section 162(m) and the regulations thereunder, as in effect from time to time. |
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2.10 |
“Company” means Coty Inc., a Delaware corporation, and any successor thereto as provided in Section 14.1. |
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2.11 |
“Designated Beneficiary” means the Person or Persons the Participant designates from time to time on a signed form prescribed by the Committee, properly filed with the Committee during the Participant’s lifetime, as the beneficiary of any amounts or benefits the Participant owns or is to receive under the Plan, in accordance with Section 10.1. A properly filed beneficiary designation will revoke all prior designations by the same Participant. If no such form has been filed with the Committee, the Designated Beneficiary shall be the beneficiary |
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named by the Participant in the Company’s qualified 401(k) savings plan or, if none, the Beneficiary’s estate. |
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2.12 |
“Disability” means either (i) disability as defined for purposes of the Company’s disability benefit plan, or (ii) a Participant’s inability, as a result of physical or mental incapacity, to perform the duties of his or her position(s) for a period of six consecutive months or for an aggregate of six months in any consecutive 12-month period. Any question as to the existence of the Disability of a Participant as to which the Participant and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to the Participant and the Company. If the Participant and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and the Participant shall be final and conclusive for all purposes of the Plan. Following a Change in Control, the Company shall pay all expenses incurred in the determination of whether a Participant is disabled. |
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2.13 |
“Effective Date” means the date on which the Amended and Restated Certificate of Incorporation of the Company that is contemplated to be adopted by the Company in connection with the first underwritten public offering of the Company’s common stock is filed with the Secretary of State of the State of Delaware. |
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2.14 |
“Employee” means an employee of the Company or an Affiliate (that is not a Joint Venture). |
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2.15 |
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto. |
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2.16 |
“Executive Officer” means any Company employees who is an “executive officer” as defined in Rule 3b-7 promulgated under the Exchange Act. |
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2.17 |
“ Exercise Date ” shall mean any Business Day. |
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2.18 |
“Exercise Price” means the price at which a Participant may purchase a Share pursuant to a Stock Option. |
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2.19 |
“Fair Market Value” as it relates to a Share means, unless otherwise determined by the Committee, the most recent closing price of a Share on the principal national securities exchange on which the Shares are then listed, or if there were no sales on such date, on the next preceding day on which there were sales, or if such Shares are not listed on a national securities exchange, the last reported bid price in the over-the-counter market. |
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2.20 |
“Good Reason” shall have the meaning set forth in any employment, severance or other agreement between the Company or an Affiliate and the Participant. If there is no employment, severance or other agreement between the Company or an Affiliate and the Participant, or if such agreement does not define “Good Reason,” then “Good Reason” shall mean the occurrence of any of the following: |
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(a) |
Before a Change in Control: |
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(i) |
A Participant’s removal from, or the Company’s failure to reelect or reappoint the Participant to, his or her positions at the Company (other than as a result of a promotion). For purposes of this clause (i), a mere change of title shall not constitute removal from, or non-reelection to, such position, provided that a Participant’s new title is substantially equivalent to the Participant’s title as of the Grant Date and his or her position is otherwise not adversely affected; or |
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(ii) |
The relocation of a Participant’s principal workplace without his or her consent to a location more than 25 miles distant from its current location. |
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(b) |
Following a Change in Control: |
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(i) |
Any of the events described in clause (a) above, |
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(ii) |
A material diminution in a Participant’s title, position, duties or responsibilities, or the assignment to a Participant of duties that are inconsistent, in a material respect, with the scope of duties and responsibilities associated with his or her position as of the Grant Date, |
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(iii) |
The failure of the Company to continue a Participant’s participation in the Company’s Annual Performance Plan and in this Plan on a basis that is commensurate with his or her position, or |
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2.21 |
“Grant Date” means the date on which an Award is granted. |
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2.22 |
“ Joint Venture ” has the meaning given that term in Section 6.9. |
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2.23 |
“Majority Shareholder” means (i) the Company’s majority shareholder as of the Effective Date or (ii) a Benckiser Permitted Holder as defined in the Company’s Certificate of Incorporation effective on the Effective Date or any other similarly situated Person as determined by the Committee. |
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2.24 |
“Other Stock-Based Awards” has the meaning given that term in Section 8. |
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2.25 |
“Owned Shares” means Shares that a Participant has acquired through the exercise of a Stock Option, the vesting of Restricted Stock or a distribution of Shares in connection with an Other Stock-Based Award. |
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2.26 |
“Participant” means an Employee selected by the Committee to receive an Award under the Plan pursuant to Section 5.2, or who has an outstanding Award granted under the Plan. |
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2.27 |
“Person” means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization and any other entity, whether foreign or domestic, including any governmental entity or any department, agency or political subdivision thereof. |
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2.28 |
“Plan” means this Coty Inc. Long-Term Incentive Plan, as amended from time to time. |
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2.29 |
“Restricted Stock” means a contingent grant of Shares awarded to a Participant pursuant to Section 7. |
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2.30 |
“Restriction Period” means the period during which the transfer of Restricted Stock is limited in some way (based on the passage of time, the achievement of performance objectives, or the occurrence of other events as the Committee determines, in its sole discretion) and, except as provided in the Terms and Conditions, the Restricted Stock is not vested. |
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2.31 |
“Retirement” means a termination of Service (other than a termination of Service for Cause): |
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(a) |
after attaining age 60, but only if the Company or the employing Affiliate consents to the treatment of such termination as a “Retirement” for purposes of this Plan; or |
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(b) |
qualifying as a retirement at normal retirement age under the laws and/or arrangements applicable to the Participant, as reasonably determined by the Committee. |
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2.32 |
“Section 409A” means Section 409A of the Code and the applicable regulations and other legal authority promulgated thereunder. |
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2.33 |
“Service” means the provision of services in the capacity of an Employee or a Director of the Company or an Affiliate. A transfer of Service from the Company to an Affiliate or from an Affiliate to the Company or another Affiliate shall not constitute a termination of Service under the Plan or any Terms and Conditions. All determinations regarding Service, including whether any leave of absence is a termination of Service, shall be made by the Committee in its sole discretion. For purposes of this paragraph, a “Continuing Director” shall mean any individual who, upon his or her termination of employment with the Company or an Affiliate, continues to serve as a member of the Board or the board of directors of an Affiliate. The Service of a Continuing Director shall terminate when he or she ceases to serve as a member of the Board or on the board of directors of an Affiliate. |
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2.34 |
“Share” means a share of the Class A Common Stock, par value $.01 per share, of the Company, or such other securities of the Company as may be designated by the Committee from time to time. |
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2.35 |
“Stock Option” means a nonqualified stock option, as described in Section 6, that is not intended to meet the requirements of Code Section 422. |
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2.36 |
“Stock Option Spread” means the amount by which the Fair Market Value, as of the Exercise Date, of the Shares as to which a Stock Option is exercised exceeds the aggregate Exercise Price with respect to such Shares. |
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2.37 |
“Successor” means the Participant’s spouse, the Participant’s lineal descendants and/or any trust the beneficiaries of which consist only of the Participant, the Participant’s spouse and/or the Participant’s lineal descendants, or to a corporation in which the Participant, the |
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Participant’s spouse and/or the Participant’s lineal descendants own 100% of the economic interest and has the unfettered right to prevent further transfer or disposition of the Restricted Stock, Stock Option or Owned Shares, as applicable. The Committee may, in its discretion, deem other parties to qualify as a Successor for purposes of this Plan. |
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2.38 |
“Terms and Conditions” means any electronic or written agreement or other instrument or document evidencing an Award. |
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2.39 |
“Withholding Tax” means the aggregate federal, state and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising under the Plan. |
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SECTION 3 |
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Administration |
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3.1 |
Plan Administration. The Plan shall be administered by the Committee. |
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3.2 |
Authority of the Committee. Except as limited by law or the by-laws of the Company, and subject to the provisions of the Plan, the Committee shall have full power and discretion to: (a) select eligible Employees to participate in the Plan; (b) determine the size and type of Awards; (c) determine the terms and conditions of Awards in a manner consistent with the Plan; (d) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in Shares, or other property, and the method or methods by which Awards may be settled or exercised; (e) determine the Fair Market Value of a Share; (f) construe and interpret the Plan and any agreement or instrument entered into under the Plan; (g) establish, amend or waive rules and regulations for the Plan’s administration; (h) specify the Exercise Price; and (i) subject to the provisions of Section 13.1, amend the terms and conditions of any outstanding Award to the extent the amended terms are within the Committee’s authority under the Plan. Further, the Committee shall make all other determinations that may be necessary or advisable to administer the Plan. The Committee may delegate some or all of its authority under the Plan to officers or employees of the Company or other Persons, except with respect to Awards to Executive Officers. |
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3.3 |
Decisions Binding. All determinations and decisions made by the Committee or by a Person or Persons delegated authority by the Committee pursuant to the provisions of the Plan shall be final, conclusive and binding on all Persons, including, without limitation, the Company, its shareholders, all Affiliates, Employees, Participants and their estates and beneficiaries. |
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SECTION 4 |
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Shares Subject to the Plan |
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4.1 |
Number of Shares Available for Grants. Subject to adjustment as provided in Section 4.3 the number of Shares with respect to which Awards (including for this purpose awards granted under the Plan prior to the Restatement Effective Date) may be granted under the Plan shall be as set forth in a resolution adopted by the Board and as authorized by the Company’s shareholders. |
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4.2 |
Lapsed Awards. If any Award granted under the Plan is canceled, terminates, expires, lapses or is forfeited for any reason, any Shares subject to the Award shall again be available for the grant of an Award under the Plan. |
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4.3 |
Adjustments in Authorized Shares. If the Shares, as currently constituted, are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether because of a merger, consolidation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise, but not including an IPO or other capital infusion from any source) or if the number of Shares is increased through the payment of a stock dividend, then the Committee shall substitute for or add to each Share that may become subject to an Award the number and kind of shares of stock or other securities into which each outstanding Share was changed, for which each such Share was exchanged, or to which each such Share is entitled, as the case may be. |
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4.4 |
Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares. |
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4.5 |
Plan Frozen. As of November 8, 2012, no Awards may be granted under the Plan. |
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SECTION 5 |
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Eligibility and Participation |
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5.1 |
Eligibility. Any Employee, including any officer or employee-director of the Company or an Affiliate, who is not a member of the Committee shall be eligible to be designated a Participant. To be eligible, a Participant shall have signed and delivered to the Company the Confidentiality and Non-Competition Agreement delivered by the Company to the Participant. |
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5.2 |
Actual Participation. The Committee shall determine the eligible Employees to whom it will grant Awards. |
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SECTION 6 |
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Stock Options |
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6.1 |
Grant of Stock Options. |
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(a) |
Subject to the terms and provisions of the Plan, the Committee may grant Stock Options to any Employee in the number, and upon the terms, and at such time or times, as the Committee determines and sets forth in Terms and Conditions. |
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(b) |
Each Stock Option grant shall be evidenced by Terms and Conditions that specify the duration of the Stock Option, the number of Shares to which the Stock Option pertains, the manner, time, and rate of exercise and vesting of the Stock Option, and such other provisions as the Committee determines. Vesting conditions may include, but not be limited to, the achievement of specific performance objectives (Company-wide, business unit, and/or individual) or continued Service. |
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(c) |
The Company’s Chief Executive Officer, as long as he or she is a member of the Board, may grant, upon the recommendation of the Company’s Vice President, Corporate Human Resources, Stock Options covering up to a total of 2,000,000 Shares to Employees for retention, recognition or other appropriate purposes, provided that a report of any such grant shall be provided to the Committee at its next meeting following the grant. |
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6.2 |
Exercise Price. The Terms and Conditions shall specify the Stock Option’s Exercise Price, which shall be not less than the Fair Market Value of a Share on the Grant Date. |
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6.3 |
Duration of Stock Options. Each Stock Option will expire at the time determined by the Committee at the time of grant and set forth in the Terms and Conditions. |
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6.4 |
Exercise of Stock Options. |
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(a) |
Stock Options shall become exercisable at such times and be subject to such vesting and other restrictions and conditions as the Committee in each instance approves and sets forth in the Terms and Conditions. Restrictions and conditions on the exercise of a Stock Option need not be the same for each Award or for each Participant. |
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(b) |
The holder of a Stock Option may exercise the Stock Option only by delivering a written notice of exercise to the Company setting forth the number of Shares as to which the Stock Option is to be exercised. Upon the Exercise Date, the holder shall pay or provide for the Exercise Price and applicable Withholding Tax in full, pursuant to such exercise procedures established by the Committee from time to time after giving consideration to applicable tax, securities and accounting rules. |
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(c) |
Any exercisable Stock Option that has not been exercised by its holder shall be automatically exercised in accordance with subsection (a) hereof on the Exercise Date immediately prior to its expiration if, on such Exercise Date, there is a Stock Option Spread with respect to such Stock Option. |
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6.5 |
Termination of Service. Except as otherwise provided in the Terms and Conditions: |
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(a) |
In the event a Participant’s Service terminates by reason of death, Disability, or Retirement: |
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(i) |
The Applicable Fraction of the portion of any Stock Option held by such Participant which has not theretofore become exercisable shall immediately become vested and exercisable. |
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(ii) |
All Stock Options held by the Participant, to the extent exercisable (including by application of clause (i) above) as of the Participant’s termination of Service shall remain exercisable through the second anniversary of the date of termination of Service. |
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(iii) |
Any unvested portion of the Participant’s Stock Options as of the date of termination (other than any portion thereof that becomes vested pursuant to |
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clause (i) above) shall be forfeited and canceled, without consideration, on the date of termination. |
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(b) |
Except as provided in Section 6.8, in the event a Participant’s Service terminates other than by reason of death, Disability, or Retirement: |
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(i) |
Any unvested portion of the Participant’s Stock Options as of the date of termination shall be forfeited and canceled on the date of termination, and |
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(ii) |
The vested portion, if any, of the Participant’s Stock Options shall remain exercisable until ninety (90) days after the Participant’s termination of Service. Any vested Stock Option remaining outstanding after such date shall be canceled without consideration. |
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(c) |
Notwithstanding the foregoing, the Committee may, in its sole discretion, accelerate the vesting and exercisability, and/or extend the period of exercisability, of all or a portion of a Stock Option at any time. |
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(d) |
In no event shall a Stock Option be exercisable following its expiration date. |
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6.6 |
Nontransferability of Stock Options. |
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(a) |
Except as otherwise provided in Section 6.6(b), a Participant’s Terms and Conditions, or the Plan, during the Restriction Period, (i) no Stock Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and (ii) all Stock Options shall be exercisable during the Participant’s lifetime only by the Participant or his or her guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with the evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant. |
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(b) |
Subject to applicable law, vested Stock Options may be transferred to a Successor. Such transferred Stock Options may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 6.6, and shall be subject in all respects to the terms of the Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan. |
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6.7 |
Dividend Equivalents and Other Distributions. The Committee may, in its sole discretion, provide under an agreement for payments in connection with Stock Options that are equivalent to dividends or other distributions declared and paid on the Shares underlying the Stock Options prior to the date of exercise. Such dividend equivalent agreement, if any, shall be separate and apart from the Terms and Conditions and shall be designed to comply separately with Section 409A. |
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6.8 |
Change in Control. If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, the unvested portion of any then outstanding Stock Option shall vest and become exercisable. |
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6.9 |
Employment in a Joint Venture. If a Participant becomes an employee of certain joint ventures of the Company, as determined by the Board from time to time (a “ Joint Venture ”), during the Restriction Period, vesting of the Participant’s Stock Options shall be tolled beginning on the date such Participant becomes an employee of the Joint Venture until the date such Participant again becomes an Employee. Accordingly, the Restriction Period for such Participant’s Stock Options shall be extended by the number of days the Participant was an employee of the Joint Venture. |
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SECTION 7 |
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Restricted Stock |
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7.1 |
Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Committee may, at any time and from time to time, grant Restricted Stock to any Employee in such amounts as it determines and sets forth in Terms and Conditions. |
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7.2 |
Terms and Conditions. Each grant of Restricted Stock shall be evidenced by Terms and Conditions that specify the Restriction Period, the number of Shares granted, the purchase price, if any, and such other provisions as the Committee determines. |
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7.3 |
Nontransferability. |
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(a) |
Except as provided in Section 7.3(b), during the Restricted Period, (i) no Restricted Stock granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution and (ii) all rights with respect to Restricted Stock shall be available during the Participant’s lifetime only to the Participant or the Participant’s guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant. |
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(b) |
Subject to applicable law, Restricted Stock may be transferred to a Successor. Such transferred Restricted Stock may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 7.3, and shall be subject in all respects to the terms of the Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan. |
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7.4 |
Termination of Service. Except as provided in Section 7.5, if a Participant’s Service terminates, then except as otherwise provided in the Terms and Conditions all unvested |
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Restricted Stock held by such Participant will be forfeited and any vested Restricted Stock shall continue to be subject to the terms of the Plan and any applicable Award. |
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7.5 |
Change in Control. If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, all then outstanding Restricted Stock shall vest and become nonforfeitable. |
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7.6 |
Other Conditions. |
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(a) |
The Committee may impose such other conditions and restrictions on any Restricted Stock as it deems advisable and sets forth in the Terms and Conditions, including, without limitation, vesting restrictions based upon the achievement of specific performance objectives (Company-wide, business unit, and/or individual) or continued Service, and/or restrictions under applicable federal or state securities laws. The Committee may provide that restrictions established under this Section 7.6(a) as to any given Award will lapse all at once or in installments. |
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(b) |
The Company may retain the certificates representing Shares of Restricted Stock in its possession until all conditions and/or restrictions applicable to the Shares have been satisfied. |
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7.7 |
Voting Rights. Except as otherwise provided in the Terms and Conditions, a Participant holding Shares of Restricted Stock may exercise any voting rights that apply to those Shares during the Restriction Period. |
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7.8 |
Dividends and Other Distributions. During the Restriction Period, a Participant holding Shares of Restricted Stock shall be credited with regular dividends and other distributions paid on those Shares. Such dividends and other distributions shall be subject to the same vesting conditions as the underlying Shares, and shall be paid within 30 days following the end of the Restriction Period. |
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7.9 |
Section 83(b) Elections on Restricted Stock. The Participant, if subject to taxation in the United States with respect to any compensation derived under the Plan, shall indicate to the Company whether the Participant intends to make an election under Code Section 83(b) with respect to the Restricted Stock. |
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7.10 |
Employment in a Joint Venture. If a Participant becomes an employee of a Joint Venture during the Restriction Period, vesting of the Participant’s Restricted Stock shall be tolled beginning on the date such Participant becomes an employee of the Joint Venture and shall recommence on the date such Participant again becomes an Employee. Accordingly, the Restriction Period for such Participant’s Restricted Stock shall be extended by the number of days the Participant was an employee of the Joint Venture. |
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SECTION 8 |
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Other Stock-Based Awards |
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8.1 |
The Committee shall have authority to grant to eligible Employees an “ Other Stock-Based Award ,” which shall consist of any right which (i) is not a Stock Option or Restricted Stock, and (ii) is an Award of Shares or an Award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as deemed by the Committee to be consistent with the purposes of the Plan. Subject to the terms of the Plan and any applicable Terms and Conditions, the Committee shall determine the terms and conditions of any such Other Stock-Based Award. |
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SECTION 9 |
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Share Restrictions and Purchase and Sale Rights |
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9.1 |
Restrictions. The Committee may impose such restrictions on any Shares as it deems necessary or advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which the Shares are then listed and/or traded, and under any blue sky or state securities laws. |
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9.2 |
Additional Conditions of Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or transferred, or (ii) to treat as owner of such Shares, to accord the right to vote as such owner, or to pay dividends to any transferee to whom such Shares have been transferred in violation of the Plan or any Terms and Conditions. |
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SECTION 10 |
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Beneficiary Designation |
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10.1 |
Each Participant may, from time to time, name any Designated Beneficiary (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case the Participant should die before receiving any or all of his or her benefits under the Plan. Each beneficiary designation shall revoke all prior designations by the same Participant, must be in a form prescribed by the Committee and must be made during the Participant’s lifetime. If a Designated Beneficiary predeceases the Participant or no beneficiary has been designated, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate. |
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SECTION 11 |
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Breach of Restrictive Covenants |
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11.1 |
The Terms and Conditions may provide that if the Participant breaches, whether during or after termination of Service, a nonsolicitation, noncompetition, confidentiality, or other restrictive covenant by which he or she is bound, then in addition to any other penalties or restrictions that may apply under any such agreement, state law, or otherwise, the Participant shall forfeit: |
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(a) |
Any Awards granted to him or her under the Plan, including Awards that have become exercisable; |
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(b) |
The profit the Participant realized from the exercise of any Stock Options that the Participant exercised after terminating Service and within the six-month period immediately preceding the Participant’s termination of Service, which is the Stock Option Spread associated with any Shares acquired by the Participant upon his or her exercise of such Stock Options; and |
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(c) |
The Fair Market Value, as determined on the vesting date, of any Restricted Stock that vested within the six-month period immediately preceding the Participant’s termination of Service. |
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SECTION 12 |
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Rights of Participants |
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12.1 |
Service. Nothing in the Plan shall interfere with or limit in any way the right of the Company or any Affiliate to terminate any Participant’s Service at any time, or confer upon any Participant any right to continue in the Service of the Company or any Affiliate. The grant of any Award under the Plan shall not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets. |
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12.2 |
Participation. No Employee shall have the right to receive an Award under the Plan, or, having received any Award, to receive a future Award. |
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SECTION 13 |
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Amendment, Modification, Termination and Change in Control |
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13.1 |
Amendment, Modification and Termination. The Board may at any time and from time to time alter, amend, modify or terminate the Plan in whole or in part, without the approval of the Company’s shareholders, except to the extent such approval is required by law. Subject to the terms and conditions of the Plan, the Committee may modify, extend or renew outstanding Awards under the Plan, or accept the surrender of outstanding Awards (to the extent not already exercised) and grant new Awards in substitution of them (to the extent not already exercised), in order to comply with the requirements of applicable law or otherwise. Notwithstanding the foregoing, no modification of an Award shall, without the prior written consent of the Participant, materially alter or impair any rights or obligations under any Award already granted under the Plan, except such an amendment made to comply with the requirements of applicable law. |
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13.2 |
Adjustment of Awards Upon the Occurrence of Certain Events . |
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(a) |
In General . If the Shares, as currently constituted, are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether because of a merger, consolidation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise, but not including a capital infusion from any source) or if the number of Shares is increased through the payment of a stock dividend, then the Committee shall substitute for or add to each Share underlying an Award the number and kind of shares of stock or other securities into which each outstanding Share was changed, for which each such |
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Share was exchanged, or to which each such Share is entitled, as the case may be, which shares or other securities shall be subject to the same terms and conditions as the underlying Award. Any such adjustment in an outstanding Stock Option shall be made without change in the aggregate purchase price applicable to the unexercised portion of such Stock Option but with a corresponding adjustment in the Exercise Price for each Share or other unit of any security covered by such Stock Option. |
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(b) |
Reciprocal Transactions . The Committee may, but shall not be obligated to, make an appropriate and proportionate adjustment to an Award or to the Exercise Price of any outstanding Award, and/or grant an additional Award to the holder of any outstanding Award, to compensate for the diminution in the intrinsic value of the Shares resulting from any reciprocal transaction. |
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(c) |
Certain Unusual or Nonrecurring Events . In recognition of unusual or nonrecurring events affecting the Company or its financial statements, or in recognition of changes in applicable laws, regulations, or accounting principles, and, whenever the Committee determines that adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, the Committee may, using reasonable care, make adjustments in the terms and conditions of, and the criteria included in, Awards. In no event will the Committee, unless otherwise approved by shareholders, be permitted (i) to reduce the Exercise Price of any outstanding Stock Option, (ii) cancel a Stock Option in exchange for cash or other Awards (except as provided in Section 13.4), (iii) exchange or replace an outstanding Stock Option with a new Stock Option with a lower Exercise Price, or (iv) take any other action that would be a “repricing” of Stock Options. |
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(d) |
Notice . The Committee shall give notice of any adjustment to each Participant who holds an Award that has been adjusted and the adjustment (whether or not such notice is given) shall be effective and binding for all Plan purposes. |
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(e) |
Section 409A . Notwithstanding any provision herein to the contrary, no adjustment shall be made under this Section 13.2 to the extent it would give rise to adverse tax consequences under Section 409A. |
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13.3 |
Fractional Shares. Fractional Shares, whether resulting from any adjustment in Awards pursuant to Section 13.2 or otherwise, may be settled in cash or otherwise as the Committee determines. |
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13.4 |
Change in Control . |
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(a) |
If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, all then outstanding Awards shall become fully vested. |
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(b) |
Any Award that has not been fully exercised before the date of a Change in Control may be settled or otherwise terminated on such date in the discretion of the |
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Committee, unless a provision has been made in writing in connection with such transaction for the assumption of all Awards theretofore granted, or the substitution for such Awards of awards to acquire the stock of the surviving, resulting or acquiring corporation, with any adjustments as the Committee determines appropriate, in which event the Awards theretofore granted shall continue in the manner and under the terms so provided. Notwithstanding anything in the Plan to the contrary, any underwater Award that has not been fully exercised, and any Award that the Committee determines cannot become vested, before the date of consummation of the Change in Control may be canceled without consideration in the discretion of the Committee. |
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13.5 |
Tax Withholding. The Company shall have the right to deduct or withhold, or require a Participant to remit to the Company, an amount (either in cash or Shares) sufficient to satisfy any Withholding Tax. |
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SECTION 14 |
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Miscellaneous Provisions |
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14.1 |
Successors. All obligations of the Company under the Plan or the Terms and Conditions shall be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the Company’s stock, or a merger or consolidation, or otherwise. |
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14.2 |
Legal Construction. |
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(a) |
Number . Except where otherwise indicated by the context, any plural term used in the Plan includes the singular and any singular term includes the plural. |
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(b) |
Severability . If any provision of the Plan is held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. |
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14.3 |
Business Day. In the event the day prescribed for the performance of any act under the Plan, or deadline by which such act must be performed, shall fall on a day other than a Business Day, such day or deadline shall be extended until the close of business on the next succeeding Business Day. |
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14.4 |
Requirements of Law. The granting of Awards, the issuance of Shares and the payment of cash under the Plan shall be subject to all applicable laws, rules and regulations, and to any approvals by governmental agencies or national securities exchanges as may be required. |
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14.5 |
Rights of a Shareholder. A Participant shall not be, nor shall a Participant have any of the rights and privileges of, a shareholder until certificates for the underlying Shares of Restricted Stock have been issued. |
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14.6 |
Securities Law Compliance. |
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(a) |
As to any individual who is, on the relevant date, an officer, director or greater than 10% percent beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange Act, transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 under the Exchange Act, or any successor rule. To the extent any provision of the Plan or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee. |
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(b) |
To the extent the Committee deems it necessary, appropriate or desirable to comply with state securities laws or practice and to further the purposes of the Plan, the Committee may, without amending the Plan, (i) establish rules applicable to Awards granted to Participants, including rules that differ from those set forth in the Plan, and (ii) grant Awards to such Participants in accordance with those rules that would require the application of the securities laws of any state. |
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14.7 |
Unfunded Status of the Plan. The Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments or deliveries of Shares not yet made to a Participant by the Company, the Participant’s rights are no greater than those of a general creditor of the Company. The Committee may authorize the establishment of trusts or other arrangements to meet the obligations created under the Plan, so long as the arrangement does not cause the Plan to lose its legal status as an unfunded plan. |
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14.8 |
Non-U.S. Based Employee. Notwithstanding any other provision of the Plan to the contrary, the Committee may make Awards to Employees who are not citizens or residents of the United States, or to Employees outside the United States, on terms and conditions that are different from those specified in the Plan as may, in the Committee’s judgment, be necessary or desirable to foster and promote achievement of the Plan’s purposes. In furtherance of such purposes, the Committee may, without amending the Plan, establish or modify rules, procedures and subplans as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company operates or has employees. |
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14.9 |
Governing Law. To the extent not preempted by Federal law, the Plan and all agreements hereunder shall be construed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction. |
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-17-
Exhibit 10.29
This instrument (the “ Terms and Conditions ”) evidences the grant effective on the date set forth in your total compensation letter (the “ Grant Date ”) of a nonqualified stock option award to you (the “ Participant ”) by Coty Inc., a Delaware corporation (the “ Company ”). Any term capitalized but not defined in these Terms and Conditions will have the meaning set forth in the Coty Inc. Long-Term Incentive Plan, as amended April 8, 2013 (the “ Plan ”).
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1. |
Option Grant. In accordance with the terms of the Plan and subject to these Terms and Conditions, the Company hereby grants to the Participant as of the Grant Date an option (the “ Option ”) to purchase all or any part of an aggregate of the number of shares of the Company’s Shares set forth in your total compensation letter (the “ Option Shares ”). This award is subject to cancellation unless the Participant executes and returns to the Company the Coty Inc. Confidentiality and Non-Competition Agreement by December 31 of the calendar year in which the Option was granted. This Option is a nonqualified stock option and is not intended to be an incentive stock option within the meaning of Code Section 422. |
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2. |
Exercise Price. The Exercise Price of the Option will be the price per Share set forth in your total compensation letter. |
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3. |
Vesting and Exercisability of Option. The Participant may exercise this Option only after it has become vested and exercisable in accordance with the following: |
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(a) |
In General . The Option shall vest and become exercisable on the fifth anniversary of the Grant Date. |
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(b) |
Change in Control . If, within twelve months following a Change in Control, (i) the Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) the Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, the Option shall vest and become exercisable. |
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(c) |
Joint Venture . If the Participant becomes an employee of a Joint Venture during the Restriction Period, vesting of the Option shall be tolled beginning on the date the Participant becomes an employee of the Joint Venture and shall recommence on the date the Participant again becomes an Employee Accordingly, the Restriction Period shall be extended by the number of days the Participant was an employee of the Joint Venture. |
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(d) |
Retirement, Death, or Disability . The Option shall vest and become exercisable to the extent provided in paragraph 7 in the event of the Participant’s termination of Service by reason of Retirement, death, or Disability. |
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4. |
Expiration. Subject to paragraph 7, the Option will expire on the tenth anniversary of the Grant Date (the “ Expiration Date ”). |
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5. |
Transferability of Option. |
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(a) |
Except as provided in Section 5(b), (i) the Participant may not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Option, other than by will or the laws of descent and distribution and (ii) the Option shall be exercisable during the Participant’s lifetime only by the Participant or his or her guardian or legal representative. |
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(b) |
Subject to applicable law, vested Stock Options may be transferred to a Successor. Such transferred Stock Options may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 5(b), and shall be subject in all respects to the terms of these Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan. |
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6. |
Exercise of Option. |
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(a) |
Notice of Exercise . After the Option has become exercisable pursuant to paragraph 3, and while it remains exercisable in accordance with paragraph 7, the Participant may exercise the Option in whole or in part on any Exercise Date by delivering a signed, written exercise notice to the Company. The notice shall indicate the number of Shares being purchased. Upon the Exercise Date, the holder shall pay or provide for the Exercise Price and applicable Withholding Tax in full, pursuant to such procedures established by the Committee from time to time after giving consideration to applicable tax, securities and accounting rules. The Option must be exercised as to a whole number of Shares. |
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(b) |
Withholding Obligation . The withholding obligation upon the Participant’s exercise of the Option must be satisfied by paying the amount of required withholding to the Company. If the Participant does not pay the amount of required withholding to the Company, the Company will withhold from the Shares delivered to the Participant the minimum amount of funds required to cover any Withholding Tax required to be withheld by the Company by reason of such exercise of the Option. |
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(c) |
Use of Shares . Shares used to satisfy the Exercise Price and/or any required withholding tax (including Shares underlying surrendered Options) will be valued at their Fair Market Value, determined in accordance with the Plan. |
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(d) |
Condition of Transfer . The Company will issue no Shares pursuant to the Option before the Participant has paid the Exercise Price and any withholding obligation in full. |
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(e) |
Automatic Exercise . Any exercisable Option that has not been exercised by its holder shall be automatically exercised in accordance with Section 6(a) on the Exercise Date immediately prior to its expiration if, on such Exercise Date, there is a Option Spread with respect to such Option. |
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7. |
Termination of Service. Upon termination of Service with the Company or an Affiliate, the Participant’s right to exercise the Option will be subject to the following rules: |
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(a) |
Retirement, Disability or Death . |
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(i) |
If the Participant’s Service terminates due to Retirement, Disability or death before the Option has otherwise become vested, then the Option shall immediately become vested and exercisable with respect to the Applicable Fraction of the Option Shares, and shall be immediately forfeited and canceled with respect to the remaining Option Shares. The “ Applicable Fraction ” means a fraction, the numerator of which is the number of days elapsed from the Grant Date of an Award to the date of the Participant’s termination of Service and the denominator of which is the number of days between the Grant Date and the date the Award was scheduled to become exercisable or otherwise vest. |
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(ii) |
The portion of an Option that is vested (whether by application of paragraph 7(a)(i) above or otherwise) on the date the Participant terminates Service due to Retirement, Disability or death may be exercised on an Exercise Date occurring on or before the second anniversary of the date of the Participant’s termination. |
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(b) |
Other Termination of Service . Except as provided in paragraph 3(b), if the Participant’s Service terminates for any reason other than Retirement, Disability or death, the Participant may exercise the Option to the extent that it was exercisable on the date of such termination on any Exercise Date on or before the 90 th day following such termination. Any Option that is not vested on the date the Participant’s Service shall be immediately forfeited and canceled. |
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(c) |
Option Expiration . In no event may the Option be exercised after the Expiration Date. |
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8. |
Plan and Terms and Conditions Not a Contract of Employment or Service. Neither the Plan nor these Terms and Conditions are a contract of employment or Service, and no terms of the Participant’s employment or Service will be affected in any way by the Plan, these Terms and Conditions or related instruments, except to the extent specifically expressed therein. Neither the Plan nor these Terms and Conditions will be construed as conferring any legal rights on the Participant to continue to be employed or remain in Service with the Company, nor will it interfere with any Company Party’s right to discharge the Participant or to deal with him or her regardless of the existence of the Plan, these Terms and Conditions or the Option. |
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9. |
Participant to Have No Rights as a Shareholder. Before the date as of which the Participant is recorded on the books of the Company as the holder of any Shares underlying the Option, the Participant will have no rights as a shareholder with respect to those Shares. |
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10. |
Notice. Any notice or other communication required or permitted under these Terms and Conditions must be in writing and must be delivered personally, sent by certified, registered or express mail, or sent by overnight courier, at the sender’s expense. Notice will be deemed given when delivered personally or, if mailed, three (3) days after the date of deposit in the United States mail or, if sent by overnight courier, on the regular business day following the date sent. Notice to the Company should be sent to: |
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Coty Inc. |
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Two Park Avenue |
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17 th Floor |
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New York, New York 10016 |
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Attention: General Counsel |
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Notice to the Participant should be sent to the address on file with the Company. Either party may change the Person and/or address to which the other party must give notice under this paragraph 10 by giving such other party written notice of such change, in accordance with the procedures described above. |
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11. |
Governing Law. To the extent not preempted by federal law, these Terms and Conditions will be construed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction. |
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12. |
Plan Document Controls. The rights granted under these Terms and Conditions are in all respects subject to the provisions set forth in the Plan to the same extent and with the same effect as if set forth fully in these Terms and Conditions. If the terms of these Terms and Conditions conflict with the terms of the Plan document, the Plan document will control. |
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13. |
Amendment of these Terms and Conditions. These Terms and Conditions may be amended unilaterally by the Committee to the extent provided under the Plan, or by a written instrument signed by both parties. |
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14. |
Entire Agreement. These Terms and Conditions, together with the Plan, constitutes the entire obligation of the parties with respect to the subject matter of these Terms and Conditions and supersedes any prior written or oral expressions of intent or understanding with respect to such subject matter. |
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15. |
Administration. The Committee administers the Plan and these Terms and Conditions. The Participant’s rights under these Terms and Conditions are expressly subject to the terms and conditions of the Plan, including any guidelines the Committee adopts from time to time. The Participant hereby acknowledges receipt of a copy of the Plan. |
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COTY INC. |
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/s/ Michele Scannavini |
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Michele Scannavini |
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Chief Executive Officer |
5
Exhibit 10.30
IPO
Unit Incentive Award
Under
Coty Inc. Long-Term Incentive Plan
This instrument (the “ Agreement ”) evidences the grant effective ______________ (the “ Grant Date ”) of _________ IPO Units (the “ IPO Units ”) to ______________ (the “ Participant ”) by Coty Inc., a Delaware corporation (the “ Company ”). Any term capitalized but not defined in this Agreement will have the meaning set forth in the Coty Inc. Long-Term Incentive Plan (the “ Plan ”).
| 1. | “IPO Unit” Defined. Each IPO Unit represents a contingent right to receive a Share under the terms and conditions set forth in this Agreement and the Plan. An IPO Unit is an “Other Stock-Based Award” within the meaning of Section 8 of the Plan. |
| 2. | Vesting. |
| (a) | In General . The IPO Units shall vest, subject to paragraph 2(b), in accordance with the following rules: |
| (i) | IPO Within Five Years . In the event of an IPO Date occurring prior to the fifth anniversary of the Grant Date, 50% of the IPO Units shall vest on the IPO Date and the remaining 50% of the IPO Units shall vest on the first anniversary of the IPO Date. For purposes of this Agreement, the “ IPO Date ” means the first date on which the Shares trade publicly as a result of an IPO. |
| (ii) | No IPO Within Five Years . If no IPO Date occurs prior to the fifth anniversary of the Grant Date, 100% of the IPO Units shall vest on the earlier to occur of: |
| (A) | An IPO Date; or |
| (B) | The first date on or after the fifth anniversary of the Grant Date as of which the Fair Market Value of a Share has attained $15.00 for two consecutive Valuation Dates. (The $15.00 threshold in the preceding sentence shall be subject to appropriate adjustment in the event of a corporate transaction described in Section 13.2 of the Plan.) |
| (iii) | Expiration . Notwithstanding any provision herein to the contrary, any IPO Units that have not previously vested or been forfeited shall expire on the tenth anniversary of the Grant Date. |
| (b) | Forfeiture . Notwithstanding any provision herein to the contrary, upon the Participation’s termination of Service for any reason, any unvested IPO Units held by the Participant shall be immediately forfeited. |
| 3. | Nontransferability . |
| (a) | The IPO Units may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. |
| (b) | All rights with respect to the IPO Units shall be available during the Participant’s lifetime only to the Participant or the Participant’s guardian or legal representative. The |
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| Committee may, in its sole discretion, require the Participant’s guardian or legal representative to supply it with evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant. |
| 4. | Settlement of IPO Units. Within 15 days after the vesting of IPO Units, the Company shall transfer to the Participant one Share for each vested IPO Unit, in cancellation thereof. |
| 5. | Plan and Agreement Not a Contract of Employment or Service. Neither the Plan nor this Agreement is a contract of employment or Service, and no terms of the Participant ’s employment or Service will be affected in any way by the Plan , this Agreement or related instruments, except to the extent specifically expressed therein. Neither the Plan nor this Agreement will be construed as conferring any legal rights on the Participant to continue to be employed or remain in Service with the Company , nor will it interfere with any Company Party’s right to discharge the Participant or to deal with him or her regardless of the existence of the Plan , this Agreement or the IPO Units . |
| 6. | Participant to Have No Rights as a Shareholder. Before the date as of which the Participant is recorded on the books of the Company as the holder of any Shares underlying the Participant’s IPO Units, the Participant will have no rights as a shareholder with respect to those Shares. |
| 7. | Governing Law. To the extent not preempted by federal law, this Agreement will be construed and enforced in accordance with, and governed by, the laws of the State of New York , without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction. |
| 8. | Plan Document Controls. The rights granted under this Agreement are in all respects subject to the provisions set forth in the Plan to the same extent and with the same effect as if set forth fully in this Agreement . If the terms of this Agreement conflict with the terms of the Plan document, the Plan document will control. |
| 9. | Amendment of the Agreement . This Agreement may be amended unilaterally by the Committee to the extent provided under the Plan , or by a written instrument signed by both parties. |
| 10. | Entire Agreement . This Agreement , together with the Plan , constitutes the entire obligation of the parties with respect to the subject matter of this Agreement and supersedes any prior written or oral expressions of intent or understanding with respect to such subject matter. |
| 11. | Administration. The Committee administers the Plan and this Agreement . The Participant ’s rights under this Agreement are expressly subject to the terms and conditions of the Plan , including any guidelines the Committee adopts from time to time. The Participant hereby acknowledges receipt of a copy of the Plan . |
Exhibit 10.31
Restricted
Stock Unit Award
Terms and Conditions
Under
COTY INC. LONG-TERM INCENTIVE PLAN
(as amended April 8, 2013 and effective on the Effective Date)
This instrument (the “ Terms and Conditions ”) evidences the grant effective on the date set forth in your total compensation letter (the “ Grant Date ”) of an award of Restricted Stock Units (the “ Restricted Stock Units ”) by Coty Inc., a Delaware corporation (the “ Company ”). Any term capitalized but not defined in these Terms and Conditions will have the meaning set forth in the Coty Inc. Long-Term Incentive Plan, as amended April 8, 2013 (the “ Plan ”).
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1. |
Restricted Stock Unit Grant . The Participant is hereby granted the Restricted Stock Units as of the Grant Date. The Restricted Stock Units, and any Shares acquired upon settlement thereof, are subject to the following terms and conditions and to the provisions of the Plan, the terms of which are incorporated by reference herein. This award is subject to cancellation unless the Participant executes and returns to the Company the Coty Inc. Confidentiality and Non-Competition Agreement by December 31 of the calendar year in which the Restricted Stock Units were granted. |
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2. |
Vesting Period. |
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(a) |
In General . The Restricted Stock Units shall vest on the fifth anniversary of the Grant Date provided the Participant has remained in continuous Service through such date. |
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(b) |
Change in Control . If, within twelve months following a Change in Control, (i) the Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) the Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, the Restricted Stock Units shall vest immediately. |
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(c) |
Joint Venture . If the Participant becomes an employee of a Joint Venture before the fifth anniversary of the Grant Date, vesting of the Restricted Stock Units shall be tolled beginning on the date the Participant becomes an employee of the Joint Venture and shall recommence on the date the Participant again becomes an Employee. Accordingly, the vesting period shall be extended by the number of days the Participant was an employee of the Joint Venture. |
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(d) |
Retirement, Death or Disability . In the Participant’s Service terminates due to Retirement, death or Disability before the Restricted Stock Units have otherwise become vested, then the number of Restricted Stock Units that shall become vested is multiplied by a fraction, the numerator of which is the number of days elapsed from the Grant Date to the date of the Participant’s termination of Service and the denominator of which is the number of days between the Grant Date and the date the Award was scheduled to become exercisable or otherwise vest. |
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(e) |
Forfeiture . In the event the Participant’s Service terminates other than by reason of the Participant’s Retirement, death or Disability prior to a Change in Control, |
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or following a Change in Control for any reason not provided in Section 2(b) above, then notwithstanding any provision in the Plan or these Terms and Conditions to the contrary any unvested Restricted Stock Units granted to the Participant shall be immediately forfeited. |
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3. |
Nontransferability. |
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(a) |
Except as provided in Section 3(b), no Restricted Stock Units granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent or distribution and all rights with respect to the Restricted Stock Units shall be available during the Participant’s lifetime only to the Participant or the Participant’s guardian or legal representative. The Committee may, in its sole discretion, require the Participant’s guardian or legal representative to supply it with evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant. |
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(b) |
Subject to applicable law, Restricted Stock Units may be transferred to a Successor. Such transferred Restricted Stock Units may not be further sold, transferred, pledged, assigned or otherwise alienated by the Successor, and shall be subject in all respects to the terms of these Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan. |
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4. |
Settlement of Restricted Stock Units. Within fifteen (15) days after the Restricted Stock Units become vested according to the terms of Section 2, the Company shall deliver to the Participant for each Restricted Stock Unit one Share (thereafter an Owned Share) and the amount of dividends, dividend equivalents and other distributions paid with respect to a Share during the vesting period beginning on the Grant Date. |
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5. |
Securities Law Requirements. |
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(a) |
If at any time the Committee determines that issuing Shares would violate applicable securities laws, the Company will not be required to issue such Shares. The Committee may declare any provision of these Terms and Conditions or action of its own null and void, if it determines the provision or action fails to comply with the short-swing trading rules. As a condition to exercise, the Company may require the Participant to make written representations it deems necessary or desirable to comply with applicable securities laws. |
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(b) |
No Person who acquires Shares under these Terms and Conditions may sell the Shares, unless they make the offer and sale pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “ Securities Act ”), which is current and includes the Shares to be sold, or an exemption from the registration requirements of the Securities Act. |
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6. |
Transferability of Shares. The Company will not be required (i) to transfer on its books any Shares that have been sold or transferred, or (ii) to treat as owner of such Shares, to accord the right to vote as such owner or to pay dividends to any transferee to whom such Shares have been transferred, in violation of the Plan or these Terms and Conditions. |
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7. |
No Limitation on Rights of the Company. The grant of the Restricted Stock Units does not and will not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets. |
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8. |
Participant to Have No Rights as a Shareholder. Before the date as of which the Participant is recorded on the books of the Company as the holder of any Shares, the Participant will have no rights as a shareholder with respect to those Shares. |
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9. |
Notice . Any notice or other communication required or permitted under these Terms and Conditions must be in writing and must be delivered personally, sent by certified, registered or express mail, or sent by overnight courier, at the sender’s expense. Notice will be deemed given when delivered personally or, if mailed, three (3) days after the date of deposit in the United States mail or, if sent by overnight courier, on the regular business day following the date sent. Notice to the Company should be sent to: |
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Coty Inc. |
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Two Park Avenue |
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17 th Floor |
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New York, New York 10016 |
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Attention: General Counsel |
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Notice to the Participant should be sent to the address on file with the Company. Either party may change the Person and/or address to which the other party must give notice under this Section 13 by giving such other party written notice of such change, in accordance with the procedures described above. |
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Successors. All obligations of the Company under these Terms and Conditions will be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the business of the Company, or a merger, consolidation, or otherwise. |
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11. |
Governing Law. To the extent not preempted by federal law, these Terms and Conditions will be construed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction. |
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12. |
Plan and Terms and Conditions Not a Contract of Employment or Service. Neither the Plan nor these Terms and Conditions are a contract of employment or Service, and no terms of the Participant’s employment or Service will be affected in any way by the Plan, these Terms and Conditions or related instruments, except to the extent specifically expressed therein. Neither the Plan nor these Terms and Conditions will be construed as conferring any legal rights on the Participant to continue to be employed or remain in |
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Service with the Company, nor will it interfere with any Company Party’s right to discharge the Participant or to deal with him or her regardless of the existence of the Plan, these Terms and Conditions or the Option. |
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13. |
Plan Document Controls. The rights granted under these Terms and Conditions are in all respects subject to the provisions set forth in the Plan to the same extent and with the same effect as if set forth fully in these Terms and Conditions. If the terms of these Terms and Conditions conflict with the terms of the Plan document, the Plan document will control. |
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14. |
Amendment of the Agreement. These Terms and Conditions may be amended unilaterally by the Committee to the extent provided under the Plan, or by a written instrument signed by both parties. |
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15. |
Entire Agreement. These Terms and Conditions, together with the Plan, constitutes the entire obligation of the parties with respect to the subject matter of these Terms and Conditions and supersedes any prior written or oral expressions of intent or understanding with respect to such subject matter. |
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16. |
Administration. The Committee administers the Plan and these Terms and Conditions. The Participant’s rights under these Terms and Conditions are expressly subject to the terms and conditions of the Plan, including any guidelines the Committee adopts from time to time. The Participant hereby acknowledges receipt of a copy of the Plan. |
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17. |
Section 409A. The Restricted Stock Units awarded pursuant to these Terms and Conditions are intended to comply with or, in the alternative, be exempt from Section 409A. Any reference to a termination of Service shall be construed as a “separation from service” for purposes of Section 409A. |
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COTY INC. |
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By: |
/s/ Jules Kaufman |
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Name: Jules Kaufman |
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Title: SVP, General Counsel and Secretary |
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Exhibit 10.32
COTY
INC.
EXECUTIVE OWNERSHIP PLAN
(as amended and restated on April 8, 2013)
SECTION 1
PURPOSE AND DURATION
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1.1 |
Purpose. The purpose of this Coty Inc. Executive Ownership Plan is to promote the interests of Coty Inc. and its shareholders by (i) attracting and retaining exceptional executive personnel and other key employees of the Company and its Affiliates; (ii) motivating such employees to achieve long-range performance goals; and (iii) enabling such employees to participate in the long-term growth and financial success of the Company. |
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1.2 |
Effective Date and Term of the Plan. |
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(a) |
The original effective date of the Plan was September 11, 2006. The effective date of this amended and restated plan document is the Effective Date (as defined below). |
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(b) |
The Plan will terminate upon the earlier of (i) the date on which all Shares available for issuance under the Plan have been issued pursuant to the purchase of Restricted Stock or the exercise of Matching Options, or (ii) the date specified by action of the Board. Upon such Plan termination, all Restricted Stock and Matching Options outstanding under the Plan will continue to have full force and effect in accordance with the terms of the Restricted Stock Agreements and Matching Option Terms and Conditions. |
SECTION 2
DEFINITIONS
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Whenever used in the Plan, the following terms have the meanings set forth below: |
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2.1 |
“Affiliate” means any entity (i) that, directly or indirectly, is controlled by the Company, or in which the Company has a significant equity interest, and (ii) as to which the Company is an “eligible issuer of service recipient stock” within the meaning of Treas. Reg. 1.409A-1(b)(5)(iii)(E), in any such case as determined by the Committee. |
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2.2 |
“Applicable Fraction” means a fraction, the numerator of which is the number of days elapsed from the Grant Date of a Matching Option to the date of the Participant’s termination of Service and the denominator of which is the number of days between the Grant Date and the date the Award was scheduled to become exercisable or otherwise vest. |
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2.3 |
“Board” means the Board of Directors of the Company. |
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2.4 |
“Bonus” means the gross amount of a Participant’s annual incentive award for a Performance Year under the Company’s Annual Performance Plan. |
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2.5 |
“Business Day” means any day other than a Saturday, Sunday, legal holiday or a day on which the national securities exchange that constitutes the principal market for the Shares is closed. |
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2.6 |
“Cause” has the meaning set forth in any employment, severance or other agreement between the Company or an Affiliate and the Participant. If there is no employment, severance or other agreement between the Company or an Affiliate and the Participant, or if such agreement does not define “Cause,” then “Cause” shall mean the occurrence of any of the following, as determined by the Committee in its sole discretion: |
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(a) |
a Participant’s willful and continued failure substantially to perform his or her duties (other than as a result of total or partial incapacity due to physical or mental illness or as a result of termination by such Participant for Good Reason), which failure continues for more than 30 days after receipt by the Participant of written notice setting forth the facts and circumstances identified by the Company as constituting adequate grounds for termination under this clause (a); |
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(b) |
any willful act or omission by a Participant constituting dishonesty, fraud or other malfeasance, and any act or omission by a Participant constituting immoral conduct, which in any such case is injurious to the financial condition or business reputation of the Company or any of its Affiliates; |
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(c) |
a Participant’s indictment for a felony under the laws of the United States or any state thereof or any other jurisdiction in which the Company conducts business; or |
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(d) |
a Participant’s breach of any nonsolicitation, noncompetition, confidentiality, or other restrictive covenant by which he or she is bound. |
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For purposes of this definition, no act or failure to act shall be deemed “willful” unless effected by a Participant not in good faith and without a reasonable belief that such action or failure to act was in or not opposed to the Company’s best interests. |
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2.7 |
“Change in Control” means the occurrence of any of the following: |
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(a) |
Any Person or “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), that is not the Majority Shareholder is or becomes the “beneficial owner” (as defined below), directly or indirectly, of securities representing either (i) more than 50% of the combined voting power of the Company’s then outstanding securities, or (ii) 20% or more of the combined voting power of the Company’s then outstanding securities at a time when the Majority Shareholder holds less than 30% of such combined voting power. For purposes of this clause (a), “beneficial owner” has the meaning given that term in Rule 13d-3 under the Exchange Act, except that a Person shall be deemed to be the “beneficial owner” of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants, options or otherwise, without regard to the 60-day period referred to in such Rule; |
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(b) |
Individuals who constitute the Board on the Restatement Effective Date (the “ Incumbent Board ”) cease for any reason to constitute at least a majority thereof, provided, that any Person becoming a director subsequent to such date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least three-quarters of the directors then comprising the Incumbent Board shall be, for purposes of this clause (b), considered as though such Person were a member of the Incumbent Board; and provided, further , that this clause (b) shall not apply as long as the Majority Shareholder is the beneficial owner of a majority of the voting power of the Company’s outstanding securities; |
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(c) |
The Majority Shareholder enters into any joint venture, joint operating arrangement, partnership, standstill agreement or other arrangement similar to any of the foregoing with any other Person or group, pursuant to which such Person or group assumes significant operational or managerial control of the Company; or |
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(d) |
The shareholders of the Company approve a plan or agreement providing (i) for a merger or consolidation of the Company other than with a wholly owned subsidiary and other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 51% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (ii) for a sale, exchange or other disposition of all or substantially all of the business or assets of the Company. If any of the events enumerated in this clause (d) occurs, the Board shall determine the effective date of the Change in Control resulting therefrom for purposes of this Plan. |
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2.8 |
“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time. |
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2.9 |
“Committee” means the Remuneration and Nominating Committee of the Board or any successor committee with responsibility for compensation, or any subcommittee, as long as the number of Committee members and their qualifications shall at all times be sufficient to meet the independence requirements of the New York Stock Exchange, Inc. or any other applicable exchange on which the Company’s common equity is at the time listed and, as applicable, the requirements for “outside directors” under Section 162(m) and the regulations thereunder, as in effect from time to time. |
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2.10 |
“Company” means Coty Inc., a Delaware corporation, and any successor thereto as provided in Section 13.2. |
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2.11 |
“Designated Beneficiary” means the Person or Persons the Participant designates from time to time on a signed form prescribed by the Committee, properly filed with the Committee during the Participant’s lifetime, as the beneficiary of any amounts or benefits the Participant owns or is to receive under the Plan, in accordance with Section 9. A properly filed beneficiary designation will revoke all prior designations by the same Participant. If no such form has been filed with the Committee, the Designated Beneficiary shall be the beneficiary |
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named by the Participant in the Company’s qualified 401(k) savings plan and, if none, the Beneficiary’s estate. |
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2.12 |
“Disability” means either (i) disability as defined for purposes of the Company’s disability benefit plan, or (ii) a Participant’s inability, as a result of physical or mental incapacity, to perform the duties of his or her position(s) for a period of six consecutive months or for an aggregate of six months in any consecutive 12-month period. Any question as to the existence of the Disability of a Participant as to which the Participant and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to the Participant and the Company. If the Participant and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and the Participant shall be final and conclusive for all purposes of the Plan. Following a Change in Control, the Company shall pay all expenses incurred in the determination of whether a Participant is disabled. |
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2.13 |
“Effective Date” means the date on which the Amended and Restated Certificate of Incorporation of the Company that is contemplated to be adopted by the Company in connection with the first underwritten public offering of the Company’s common stock is filed with the Secretary of State of the State of Delaware. |
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2.14 |
“Eligible Employee” means an Employee whom the Committee has designated in its sole discretion as eligible to purchase Restricted Stock on an Investment Date. |
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2.15 |
“Employee” means an employee of the Company or an Affiliate. |
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2.16 |
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto. |
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2.17 |
“Exercise Date” shall mean any Business Day. |
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2.18 |
“Exercise Price” means the price at which a Participant may purchase a Share pursuant to a Matching Option. |
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2.19 |
“Fair Market Value” as it relates to a Share or to Restricted Stock means, unless otherwise determined by the Committee, the most recent closing price of a Share on the principal national securities exchange on which the Shares are then listed, or if there were no sales on such date, on the next preceding day on which there were sales, or if such Shares are not listed on a national securities exchange, the last reported bid price in the over-the-counter market. |
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2.20 |
“Good Reason” shall have the meaning set forth in any employment, severance or other agreement between the Company or an Affiliate and the Participant. If there is no employment, severance or other agreement between the Company or an Affiliate and the Participant, or if such agreement does not define “Good Reason,” then “Good Reason” shall mean the occurrence of any of the following: |
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(a) |
Before a Change in Control: |
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(i) |
A Participant’s removal from, or the Company’s failure to reelect or reappoint the Participant to, his or her positions at the Company (other than as a result of a promotion). For purposes of this clause (i), a mere change of title shall not constitute removal from, or non-reelection to, such position, provided that a Participant’s new title is substantially equivalent to the Participant’s title as of the Investment Date and his or her position is otherwise not adversely affected; or |
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(ii) |
The relocation of a Participant’s principal workplace without his or her consent to a location more than 25 miles distant from its current location. |
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(b) |
Following a Change in Control: |
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(i) |
Any of the events described in clause (a) above, |
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(ii) |
A material diminution in a Participant’s title, position, duties or responsibilities, or the assignment to a Participant of duties that are inconsistent, in a material respect, with the scope of duties and responsibilities associated with his or her position as of the Investment Date, or |
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(iii) |
The failure of the Company to continue a Participant’s participation in the Company’s Annual Performance Plan and in this Plan on a basis that is commensurate with his or her position. |
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2.21 |
“Grant Date” means the Investment Date on which a Matching Option is granted. |
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2.22 |
“Investment Date” has the meaning set forth in Section 6.1. |
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2.23 |
“Investment Limit” has the meaning set forth in Section 6.2. |
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2.24 |
“Majority Shareholder” means (i) the Company’s majority shareholder as of the Effective Date or (ii) a Benckiser Permitted Holder as defined in the Company’s Certificate of Incorporation effective on the Effective Date or any other similarly situated Person as determined by the Committee. |
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2.25 |
“Matching Option” means a nonqualified stock option, as described in Section 7, that is not intended to meet the requirements of Code Section 422. |
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2.26 |
“Matching Option Terms and Conditions” means any agreement or other instrument or document evidencing a Matching Option. |
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2.27 |
“Matching Option Spread” means the amount by which the Fair Market Value, as of the Exercise Date, of the Shares as to which a Matching Option is exercised exceeds the aggregate Exercise Price with respect to such Shares. |
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2.28 |
“Owned Shares” means Shares that a Participant has acquired through the vesting of Restricted Stock or the exercise of a Matching Option. |
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2.29 |
“Participant” means a Person who, at a time when such Person was an Eligible Employee, has purchased Restricted Stock. |
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2.30 |
“Performance Year” means a fiscal year of the Company. |
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2.31 |
“Person” means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization and any other entity, whether foreign or domestic, including any governmental entity or any department, agency or political subdivision thereof. |
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2.32 |
“Plan” means this Coty Inc. Executive Ownership Plan, as amended from time to time. |
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2.33 |
“Purchase Price” of Restricted Stock purchased on an Investment Date means the Fair Market Value of such Restricted Stock as of such Investment Date. |
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2.34 |
“Restricted Stock” means Shares purchased by a Participant pursuant to Section 6. |
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2.35 |
“Restricted Stock Agreement” means any agreement or other instrument or document evidencing Restricted Stock. |
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2.36 |
“Restriction Period” means the period during which the transfer of Restricted Stock is limited. |
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2.37 |
“Retirement” means a termination of Service (other than a termination of Service for Cause): |
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(a) |
after attaining age 60, but only if the Company or the employing Affiliate consents to the treatment of such termination as a “Retirement” for purposes of this Plan; or |
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(b) |
qualifying as a retirement at normal retirement age under the laws and/or arrangements applicable to the Participant, as reasonably determined by the Committee. |
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2.38 |
“Section 409A” means Section 409A of the Code and the applicable regulations and other legal authority promulgated thereunder. |
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2.39 |
“Service” means the provision of services in the capacity of an Employee or a Continuing Director of the Company or an Affiliate. A transfer of Service from the Company to an Affiliate or from an Affiliate to the Company or another Affiliate shall not constitute a termination of Service under the Plan or any Restricted Stock Agreement or Matching Option Terms and Conditions. All determinations regarding Service, including whether any leave of absence is a termination of Service, shall be made by the Committee in its sole discretion. For purposes of this paragraph, a “Continuing Director” shall mean any individual who, upon his or her termination of employment with the Company or an Affiliate, continues to serve as a member of the Board or the board of directors of an Affiliate. The Service of a Continuing Director shall terminate when he or she ceases to serve as a member of the Board or on the board of directors of an Affiliate. |
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2.40 |
“Share” means a share of the Common Stock, par value $.01 per share, of the Company, or such other securities of the Company as may be designated by the Committee from time to time. |
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2.41 |
“Successor” means the Participant’s spouse, the Participant’s lineal descendants and/or any trust the beneficiaries of which consist only of the Participant, the Participant’s spouse and/or the Participant’s lineal descendants, or to a corporation in which the Participant, the Participant’s spouse and/or the Participant’s lineal descendants own 100% of the economic interest and has the unfettered right to prevent further transfer or disposition of the Restricted Stock, Matching Options or Owned Shares, as applicable. The Committee may, in its discretion, deem other parties to qualify as a Successor for purposes of the Plan. |
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2.42 |
“Withholding Tax” means the aggregate federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising under the Plan. |
SECTION 3
Administration
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3.1 |
Plan Administration. The Plan shall be administered by the Committee. |
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3.2 |
Authority of the Committee. Except as limited by law or the by-laws of the Company, and subject to the provisions of the Plan, the Committee shall have full power and discretion to: (a) designate the Employees who shall be Eligible Employees with respect to an Investment Date; (b) determine the terms and conditions of Restricted Stock and Matching Options in a manner consistent with the Plan; (c) determine the Fair Market Value of a Share; (d) construe and interpret the Plan and any agreement or instrument entered into under the Plan; (e) establish, amend or waive rules and regulations for the Plan’s administration; and (f) subject to the provisions of Section 12, amend the terms and conditions of any outstanding Restricted Stock or Matching Option to the extent the amended terms are within the Committee’s authority under the Plan. Further, the Committee shall make all other determinations that may be necessary or advisable to administer the Plan. The Committee may delegate some or all of its authority under the Plan to officers or employees of the Company or other Persons. |
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3.3 |
Decisions Binding. All determinations and decisions made by the Committee or by a Person or Persons delegated authority by the Committee pursuant to the provisions of the Plan shall be final, conclusive and binding on all Persons, including, without limitation, the Company, its shareholders, all Affiliates, Employees, Participants and their estates and beneficiaries. |
SECTION 4
Shares Subject to the Plan
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4.1 |
Available Shares. Subject to adjustment as provided in Section 4.3, the aggregate number of Shares with respect to which Restricted Stock and Matching Options may be granted under the Plan shall be as set forth in a resolution adopted by the Board and as authorized by the Company’s shareholders. |
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4.2 |
Lapsed Shares. If any Matching Option granted under the Plan is canceled, terminates, expires, lapses or is forfeited for any reason, the number of Shares to which such Matching Option relates shall again be available for Restricted Stock purchases or Matching Option grants under the Plan. |
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4.3 |
Adjustments in Authorized Shares. If the Shares, as currently constituted, are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether because of a merger, consolidation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise, but not including a capital infusion from any source) or if the number of Shares is increased through the payment of a stock dividend, then the Committee shall substitute for or add to each Share that may become subject to a Restricted Stock purchase or a Matching Option the number and kind of shares of stock or other securities into which each outstanding Share was changed, for which each such Share was exchanged, or to which each such Share is entitled, as the case may be. |
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4.4 |
Sources of Shares Deliverable Under Plan. Any Shares delivered pursuant to a Restricted Stock purchase or a Matching Option grant may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares. |
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4.5 |
Plan Frozen. As of November 8, 2012, no new Awards may be granted under the Plan. |
SECTION 5
Eligibility and Participation
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5.1 |
Eligibility. Any Employee, including any officer or employee-director of the Company or an Affiliate, shall be eligible to be designated a Participant. To be eligible, a Participant shall have signed and delivered to the Company the Confidentiality and Non-Competition Agreement delivered to the Participant by the Company. |
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5.2 |
Actual Participation. The opportunity to invest in Restricted Stock on a given Investment Date shall be limited to Eligible Employees selected by the Committee in its sole discretion as eligible to participate in the Plan as of such date. |
SECTION 6
Restricted Stock
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6.1 |
Investment Date. With respect to each Performance Year, the Committee shall establish an Investment Date, which shall be within 60 days of the date the Board determines the Bonus amounts for that Performance Year. |
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6.2 |
Investment in Restricted Stock, Vesting. An Eligible Employee may purchase on the Investment Date for a Performance Year any number of Shares of Restricted Stock up to the Investment Limit; provided , that Shares of Restricted Stock may be acquired only in multiples of 25. For purposes of this Section 6.2, the “ Investment Limit ” means (i) the Participant’s Bonus or Target Bonus, whichever is greater, for the related Performance Year, divided by (ii) |
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the Fair Market Value of a Share on the Investment Date. A Participant shall be fully vested in Shares of Restricted Stock acquired pursuant to this Section 6.2. |
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6.3 |
Investment Procedure. To purchase Restricted Stock on an Investment Date, a Participant must satisfy the following conditions: |
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(a) |
The Participant must execute on or before the Investment Date a Restricted Stock Agreement, in such written or electronic form as the Committee shall designate, specifying the number of Shares of Restricted Stock he or she elects to purchase. The Participant may by written notice to the Committee revoke his or her election at any time prior to the Investment Date. |
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(b) |
The Participant must deliver to the Committee on or before the Investment Date payment, in cash or by check, of the Purchase Price for the Restricted Stock. |
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(c) |
The Participant, if subject to taxation in the United States with respect to any compensation derived under the Plan, must make an election under Section 83(b) of the Code with respect to the Restricted Stock. |
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6.4 |
Restriction Period. The Restriction Period for Restricted Stock purchased on an Investment Date is the five-year period commencing on the Investment Date; provided, that a Participant’s Restriction Period shall immediately end upon the Participant’s termination of Service for any reason. After the Restriction Period, the Restricted Shares are referred to in the Plan and this Agreement as the “ Owned Shares .” |
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6.5 |
Transferability. The Shares of Restricted Stock may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated by the Participant at any time. |
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6.6 |
Custody of Restricted Stock. During the Restricted Period, the Shares of Restricted Stock shall be held for the benefit of the Participant in an account as may be designated by the Committee and monitored by the Company in accordance with the procedures designated by the Committee. |
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6.7 |
Voting Rights. Except as otherwise provided in a Restricted Stock Agreement, a Participant holding Shares of Restricted Stock may exercise any voting rights that apply to those Shares during the Restriction Period. |
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6.8 |
Dividends and Other Distributions. The Participant shall receive regular dividends and other distributions paid on the Restricted Shares. |
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SECTION 7
Matching Options
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7.1 |
Automatic Matching Option Grant. |
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(a) |
Grant . Upon a Participant’s purchase of Restricted Stock on an Investment Date, the Participant shall receive an automatic grant of a Matching Option on such Investment Date in accordance with this Section 7.1. |
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(b) |
Number of Shares . The number of Shares subject to the Matching Option shall be equal to the sum of the following: |
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(i) |
2 times the number of Shares purchased by the Participant on the Investment Date that do not exceed 25% of the Participant’s Bonus for the Performance Year to which such Investment Date relates; and |
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(ii) |
4 times the number of Shares purchased by the Participant on the Investment Date, to the extent such number exceeds 25% of the Participant’s Bonus for the Performance Year to which such Investment Date relates. |
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(c) |
Exercise Price . The Exercise Price of the Matching Option shall be the Fair Market Value of a Share on the Grant Date. |
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(d) |
Vesting and Exercisability . Except as otherwise provided in Section 7.4, the Matching Option shall become fully vested upon the expiration of the Restricted Period so long as the Participant has not sold, transferred, pledged, assigned or otherwise alienated or hypothecated any underlying Restricted Stock during the Restricted Period. Any Matching Option that has become vested shall remain until the tenth anniversary of the Grant Date. |
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7.2 |
Matching Option Terms and Conditions. Each Matching Option grant shall be evidenced by a Matching Option Terms and Conditions setting forth number of Shares to which the Matching Option pertains and such terms not inconsistent with the Plan as the Committee determines. |
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7.3 |
Exercise of Matching Options. |
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(a) |
The holder of a Matching Option may exercise the Matching Option only by delivering a written notice of exercise to the Company setting forth the number of Shares as to which the Matching Option is to be exercised. On the Exercise Date, the holder shall pay or provide for the Exercise Price and applicable Withholding Tax in full, pursuant to such exercise procedures established by the Committee from time to time after giving consideration to applicable tax, securities and accounting rules. |
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(b) |
Any exercisable Matching Option that has not been exercised by its holder shall be automatically exercised for Shares in accordance with subsection (a) hereof on the Exercise Date immediately prior to its expiration if, on such Exercise Date, there is a Matching Option Spread with respect to such Matching Option. |
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7.4 |
Termination of Service. Except as otherwise provided in a Matching Option Terms and Conditions: |
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(a) |
In the event a Participant’s Service terminates by reason of death, Disability, or Retirement: |
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(i) |
The Applicable Fraction of the portion of any Matching Option held by such Participant which has not theretofore become exercisable shall immediately become vested and exercisable. |
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(ii) |
All Matching Options held by the Participant, to the extent exercisable (including by application of clause (i) above) as of the Participant’s termination of Service shall remain exercisable through the second anniversary of the date of termination of Service. Any vested Matching Option remaining outstanding after such second anniversary shall be canceled without consideration. |
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(iii) |
Any unvested portion of the Participant’s Matching Options as of the date of termination (other than any portion thereof that becomes vested pursuant to clause (i) above) shall be forfeited and canceled, without consideration, on the date of termination. |
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(b) |
Except as provided in Section 7.7, in the event a Participant’s Service terminates other than by reason of death, Disability, or Retirement: |
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(i) |
The vested portion, if any, of the Participant’s Matching Options shall remain exercisable through the ninetieth (90th) day after the Participant’s termination of Service. Any vested Matching Option remaining outstanding after such date shall be canceled without consideration. |
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(ii) |
Any unvested portion of the Participant’s Matching Options as of the date of termination shall be forfeited and canceled on the date of termination, and |
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(c) |
Notwithstanding the foregoing, the Committee may, in its sole discretion, accelerate the vesting and exercisability, and/or extend the period of exercisability, of all or a portion of a Matching Option at any time. |
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(d) |
In no event shall a Matching Option be exercisable following its expiration date. |
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7.5 |
Nontransferability of Matching Options. |
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(a) |
Except as otherwise provided in Section 7.5(b), a Participant’s Matching Option Terms and Conditions, or the Plan, (i) no Matching Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and (ii) all Matching Options shall be exercisable during the Participant’s lifetime only by the Participant or his or her guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with the evidence |
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the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant. |
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(b) |
Subject to applicable law, vested Matching Options may be transferred to a Successor. Such transferred Matching Options may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 7.5, and shall be subject in all respects to the terms of the Matching Option Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan. |
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7.6 |
Dividend Equivalents and Other Distributions. The Committee may, in its sole discretion, provide under an agreement for payments in connection with Matching Options that are equivalent to dividends or other distributions declared and paid on the Shares underlying the Matching Options prior to the date of exercise. Such dividend equivalent agreement, if any, shall be separate and apart from the Matching Option Terms and Conditions and shall be designed to comply separately with Section 409A. |
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7.7 |
Change in Control. If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate without Cause or (ii) such Participant resigns for Good Reason, the unvested portion of any then outstanding Matching Option shall vest and become exercisable. |
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SECTION 8
Share Restrictions and Purchase and Sale Rights
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8.1 |
Restrictions. The Committee may impose such restrictions on any Shares as it deems necessary or advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which the Shares are then listed and/or traded, and under any blue sky or state securities laws. |
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8.2 |
Additional Conditions of Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or transferred, or (ii) to treat as owner of such Shares, to accord the right to vote as such owner, or to pay dividends to any transferee to whom such Shares have been transferred in violation of the Plan or any Restricted Stock Agreement or Matching Option Terms and Conditions. |
SECTION 9
Beneficiary Designation
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9.1 |
Each Participant may, from time to time, name any Designated Beneficiary (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case the Participant should die before receiving any or all of his or her benefits under the Plan. Each beneficiary designation shall revoke all prior designations by the same Participant, must be in a form prescribed by the Committee and must be made during the Participant’s lifetime. |
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SECTION 10
Breach of Restrictive Covenants
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10.1 |
A Restricted Stock Agreement or Matching Option Terms and Conditions may provide that if the Participant breaches, whether during or after termination of Service, a nonsolicitation, noncompetition, confidentiality, or other restrictive covenant by which he or she is bound, then in addition to any other penalties or restrictions that may apply under any such agreement, state law, or otherwise, the Participant shall forfeit: |
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(a) |
Any Restricted Stock or vested or unvested Matching Options held by him or her; |
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(b) |
The profit the Participant realized from the exercise of any Matching Options that the Participant exercised after terminating Service and within the six-month period immediately preceding the Participant’s termination of Service, which is the Matching Option Spread associated with any Shares acquired by the Participant upon his or her exercise of such Matching Options; and |
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(c) |
The Fair Market Value, as determined on the vesting date, of any Restricted Stock that vested within the six-month period immediately preceding the Participant’s termination of Service. |
SECTION 11
Rights of Participants
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11.1 |
Service. Nothing in the Plan shall interfere with or limit in any way the right of the Company or any Affiliate to terminate any Participant’s Service at any time, or confer upon any Participant any right to continue in the Service of the Company or any Affiliate. The purchase of Restricted Stock or the grant of a Matching Option under the Plan shall not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets. |
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11.2 |
Participation. No Employee shall have the right to purchase Restricted Stock under the Plan, or, having received purchased Restricted Stock, to purchase Restricted Stock in the future. |
SECTION 12
Amendment, Modification and Termination and Change
in Control
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12.1 |
Amendment, Modification and Termination. The Board may at any time and from time to time alter, amend, modify or terminate the Plan in whole or in part, without the approval of the Company’s shareholders, except to the extent such approval is required by law. Subject to the terms and conditions of the Plan, the Committee may modify, extend or renew outstanding Restricted Stock or Matching Options under the Plan, or accept the surrender of outstanding Matching Options (to the extent not already exercised) and grant new Matching Options in substitution of them (to the extent not already exercised), in order to comply with the requirements of applicable law or otherwise. Notwithstanding the foregoing, no modification |
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of Restricted Stock or Matching Options shall, without the prior written consent of the Participant, materially alter or impair any rights or obligations under any Restricted Stock or Matching Options already granted under the Plan, except such an amendment made to comply with the requirements of applicable law. |
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12.2 |
Adjustments Upon the Occurrence of Certain Events. |
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(a) |
In General . If the Shares, as currently constituted, are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether because of a merger, consolidation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise, but not including a capital infusion from any source) or if the number of Shares is increased through the payment of a stock dividend, then the Committee shall substitute for or add to each Share underlying an Award the number and kind of shares of stock or other securities into which each outstanding Share was changed, for which each such Share was exchanged, or to which each such Share is entitled, as the case may be, which shares or other securities shall be subject to the same terms and conditions as the underlying Award. Any such adjustment in an outstanding Matching Option shall be made without change in the aggregate purchase price applicable to the unexercised portion of such Matching Option but with a corresponding adjustment in the Exercise Price for each Share or other unit of any security covered by such Matching Option. |
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(b) |
Reciprocal Transactions . The Committee may, but shall not be obligated to, make an appropriate and proportionate adjustment to the Exercise Price of any outstanding Matching Option, and/or grant an additional Matching Option to the holder of any outstanding Matching Option, to compensate for the diminution in the intrinsic value of the Shares resulting from any reciprocal transaction. |
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(c) |
Certain Unusual or Nonrecurring Events . In recognition of unusual or nonrecurring events affecting the Company or its financial statements, or in recognition of changes in applicable laws, regulations, or accounting principles, and, whenever the Committee determines that adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, the Committee may, using reasonable care, make adjustments in the terms and conditions of Matching Options or Restricted Stock. In no event will the Committee, unless otherwise approved by shareholders, be permitted (i) to reduce the Exercise Price of any outstanding Matching Option, (ii) cancel a Matching Option in exchange for cash or other Awards (except as provided in 12.4), (iii) exchange or replace an outstanding Matching Option with a new Matching Option with a lower Exercise Price, or (iv) take any other action that would be a “repricing” of Matching Options. |
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(d) |
Notice . The Committee shall give notice of any adjustment to each affected Participant and the adjustment (whether or not such notice is given) shall be effective and binding for all Plan purposes. |
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(e) |
Section 409A . Notwithstanding any provision herein to the contrary, no adjustment shall be made under this Section 12.2 to the extent it would give rise to adverse tax consequences under Section 409A. |
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12.3 |
Fractional Shares. Fractional Shares, whether resulting from any adjustment in Matching Options or Restricted Stock pursuant to Section 12.2 or otherwise, may be settled in cash or otherwise as the Committee determines. |
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12.4 |
Change in Control. |
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(a) |
If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, all then outstanding Awards shall become fully vested. |
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(b) |
Any Award that has not been fully exercised before the date of a Change in Control may be settled or otherwise terminated on such date in the discretion of the Committee, unless a provision has been made in writing in connection with such transaction for the assumption of all Awards theretofore granted, or the substitution for such Awards of awards to acquire the stock of the surviving, resulting or acquiring corporation, with any adjustments as the Committee determines appropriate, in which event the Awards theretofore granted shall continue in the manner and under the terms so provided. Notwithstanding anything in the Plan to the contrary, any underwater Award that has not been fully exercised, and any Award that the Committee determines cannot become vested, before the date of consummation of the Change in Control may be canceled without consideration in the discretion of the Committee. |
SECTION 13
Miscellaneous Provisions
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13.1 |
Tax Withholding. The Company shall have the right to deduct or withhold, or require a Participant to remit to the Company, an amount (either in cash or Shares) sufficient to satisfy any Withholding Tax. |
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13.2 |
Successors. All obligations of the Company under the Plan or any Restricted Stock Agreement or Matching Option Terms and Conditions shall be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the Company’s stock, or a merger or consolidation, or otherwise. |
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13.3 |
Legal Construction. |
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(a) |
Number . Except where otherwise indicated by the context, any plural term used in the Plan includes the singular and any singular term includes the plural. |
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(b) |
Severability . If any provision of the Plan is held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan |
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shall be construed and enforced as if the illegal or invalid provision had not been included. |
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(c) |
Termination of Service . As used in the Plan, the phrase “termination of Service” and similar terms means a “separation from service” within the meaning of Section 409A. |
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13.4 |
Business Day. In the event the day prescribed for the performance of any act under the Plan, or deadline by which such act must be performed, shall fall on a day other than a Business Day, such day or deadline shall be extended until the close of business on the next succeeding Business Day. |
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13.5 |
Requirements of Law. The purchase of Restricted Stock, the granting of Matching Options, the issuance of Shares, and the payment of cash under the Plan shall be subject to all applicable laws, rules and regulations, and to any approvals by governmental agencies or national securities exchanges as may be required. |
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13.6 |
Rights of a Shareholder. A Participant shall not be, nor shall a Participant have any of the rights and privileges of, a shareholder until certificates for the underlying Shares of Restricted Stock have been issued. |
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13.7 |
Securities Law Compliance. |
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(a) |
As to any individual who is, on the relevant date, an officer, director or greater than 10% percent beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange Act, transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 under the Exchange Act, or any successor rule. To the extent any provision of the Plan or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee. |
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(b) |
To the extent the Committee deems it necessary, appropriate or desirable to comply with state securities laws or practice and to further the purposes of the Plan, the Committee may, without amending the Plan, (i) establish rules applicable to Restricted Stock or Matching Options granted to Participants, including rules that differ from those set forth in the Plan, and (ii) grant Restricted Stock or Matching Options to such Participants in accordance with those rules that would require the application of the securities laws of any state. |
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13.8 |
Unfunded Status of the Plan. The Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments or deliveries of Shares not yet made to a Participant by the Company, the Participant’s rights are no greater than those of a general creditor of the Company. The Committee may authorize the establishment of trusts or other arrangements to meet the obligations created under the Plan, so long as the arrangement does not cause the Plan to lose its legal status as an unfunded plan. |
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13.9 |
Non-U.S. Based Employee. Notwithstanding any other provision of the Plan to the contrary, the Committee may make awards to Employees who are not citizens or residents of the United |
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States, or to Employees outside the United States, on terms and conditions that are different from those specified in the Plan as may, in the Committee’s judgment, be necessary or desirable to foster and promote achievement of the Plan’s purposes. In furtherance of such purposes, the Committee may, without amending the Plan, establish or modify rules, procedures and subplans as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company operates or has employees. |
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13.10 |
Governing Law. To the extent not preempted by Federal law, the Plan and all agreements hereunder shall be construed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction. |
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Exhibit 10.33
Adoption
of Amendments to
Restricted Stock Units
Under the Coty Inc. Executive Ownership Plan
(applicable to awards outstanding on September 14, 2010)
| D. | The undersigned officer has determined that the form of amendment attached hereto as Exhibit A is appropriate to implement such actions of the Board. |
NOW THEREFORE by this instrument the Company hereby amends and restates each of the Outstanding Awards in the manner set forth in Exhibit A hereto.
Title: SVP, General Counsel & Secretary
1
Amendment
To
Restricted Stock Unit Terms
(applicable to Restricted Stock Units outstanding on September 14, 2010)
This Amendment to the terms of the award (the “ Award ”) granting the Participant restricted stock units (the “ Units ”) under the Coty Inc. Executive Ownership Plan (the “ Plan ”) is effective September 14, 2010.
| 2. | Restriction Period. The Restriction Period for the Units is the period commencing on the Grant Date and ending on the earliest of the following dates: |
| (a) | the fifth anniversary of the Grant Date; |
| (c) | the date of a Change in Control. |
| 3. | Settlement of Units. |
| (a) | In General . Except as otherwise provided in this Section 3, within fifteen (15) days after the end of the Restriction Period the Company shall pay the Participant for each Unit the sum of (i) the Fair Market Value of one Share as of the Valuation Date immediately preceding or coinciding with the last day of the Restriction Period and (ii) the amount of dividends and other cash distributions paid with respect to a Share during the five-year period beginning on the Grant Date. If the Participant is still employed, the Participant may elect, in such manner and at such time as the Committee shall determine, for the settlement of his or her Units at the end of the Restriction Period to be made in Shares in lieu of cash. In the absence of such election, payment shall be made in cash. |
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| preceding or coinciding with the date of termination, or (ii) the Base Price. For purposes of this Agreement, a “resignation without Good Reason” does not include a Retirement. |
3
Exhibit 10.34
Adoption
of Amendments to
Restricted Stock Units
Under the Coty Inc. Executive Ownership Plan
(applicable to awards outstanding on December 7, 2012)
| D. | The undersigned officer has determined that the form of amendment attached hereto as Exhibit A is appropriate to implement such actions of the Board. |
NOW THEREFORE by this instrument the Company hereby amends and restates each of the Outstanding Awards in the manner set forth in Exhibit A hereto.
Title: SVP, General Counsel & Secretary
1
Amendment
to
Restricted Stock Unit Terms
(applicable to Restricted Stock Units outstanding on December 7, 2012)
This Amendment to the terms of the award (the “ Award ”) granting the Participant restricted stock units (the “ Units ”) under the Coty Inc. Executive Ownership Plan (the “ Plan ”) is effective December 7, 2012.
| 1. | Capitalized terms not defined in this Amendment shall have the meanings given such terms in the Notice and in the Restated Plan. |
| 2. | Restriction Period. The Restriction Period for the Units is the period commencing on the Grant Date and ending on the earliest of the following dates: |
| (a) | the fifth anniversary of the Grant Date; |
| (b) | the date the Participant’s Service terminates; or |
| (c) | the date of a Change in Control. |
| 3. | Settlement of Units. Within fifteen (15) days after the end of the Restriction Period the Company shall pay the Participant for each Unit the sum of (i) the Fair Market Value of one Share as of the Valuation Date immediately preceding or coinciding with the last day of the Restriction Period and (ii) the amount of dividends and other cash distributions paid with respect to a Share during the five-year period beginning on the Grant Date. If the Participant is still employed, the Participant may elect, in such manner and at such time as the Committee shall determine, for the settlement of his or her Units at the end of the Restriction Period to be made in Shares in lieu of cash. In the absence of such election, payment shall be made in cash. |
2
Exhibit 10.35
Restricted Stock Agreement
Under
Coty Inc. Executive Ownership Plan
(as amended on April 8, 2013 and effective as of the Effective Date)
This Restricted Stock Agreement (“ Agreement ”), effective on the Effective Date, hereby amends the Restricted Stock Agreement (the “ Original Restricted Stock Agreement ”) entered into the Company and the applicable Participant on the applicable Investment Date. Any term capitalized but not defined in this Agreement will have the meaning set forth in the Coty Inc. Executive Ownership Plan, as amended April 8, 2013 (the “ Plan ”).
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1. |
Restricted Stock Investment . The Participant hereby purchases as of the Investment Date Shares of Restricted Stock (the “ Restricted Shares ”) at their Fair Market Value per share, for a total purchase price set forth in the Original Restricted Stock Agreement. |
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2. |
Section 83(b) Election . As a condition to this purchase, the Participant, if a United States taxpayer, shall no later than 30 days after the Investment Date file with the Internal Revenue Service an election under Section 83(b) of the Internal Revenue Code on the form provided to the Participant for this purpose and deliver a copy of such election to the Company. |
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3. |
Restriction Period . The Restriction Period for the Restricted Shares is the five-year period commencing on the Investment Date; provided, that the Participant’s Restriction Period shall immediately end upon termination of Service for any reason. After the Restriction Period, the Restricted Shares are referred to in the Plan and this Agreement as the “ Owned Shares .” |
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4. |
Transferability . The Shares of Restricted Stock may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated by the Participant at any time. |
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5. |
Custody of Restricted Stock. During the Restriction Period, the Shares of Restricted Stock shall be held for the benefit of the Participant in an account as may be designated by the Committee and monitored by the Company in accordance with the procedures designated by the Committee. |
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6. |
Voting Rights . The Participant may exercise all voting rights with respect to the Restricted Shares. |
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7. |
Dividends and Other Distributions . The Participant shall receive regular dividends, dividend equivalents and other distributions paid on the Restricted Shares. |
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8. |
Automatic Matching Option Grant . As a consequence of the Participant’s purchase of the Restricted Shares, the Participant will receive an automatic grant of a Matching Option on the Investment Date in accordance with the terms of the Plan and the terms of the Matching Option Agreement associated with such grant. |
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9. |
Securities Law Requirements. |
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(a) |
If at any time the Committee determines that exercising the Option or issuing Shares would violate applicable securities laws, the Option will not be exercisable, and the Company will not be required to issue such Shares. The Committee may declare any provision of this Agreement or action of its own null and void, if it determines the |
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provision or action fails to comply with the short-swing trading rules. As a condition to exercise, the Company may require the Participant to make written representations it deems necessary or desirable to comply with applicable securities laws. |
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(b) |
No Person who acquires Shares under this Agreement may sell the Shares, unless they make the offer and sale pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “ Securities Act ”), which is current and includes the Shares to be sold, or an exemption from the registration requirements of the Securities Act. |
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10. |
No Limitation on Rights of the Company. The grant of the Restricted Shares does not and will not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets. |
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11. |
Plan and Agreement Not a Contract of Employment or Service . Neither the Plan nor this Agreement is a contract of employment or Service, and no terms of the Participant’s employment or Service will be affected in any way by the Plan, this Agreement or related instruments, except to the extent specifically expressed therein. Neither the Plan nor this Agreement will be construed as conferring any legal rights on the Participant to continue to be employed or remain in Service with the Company, nor will it interfere with any Company Party’s right to discharge the Participant or to deal with him or her regardless of the existence of the Plan, this Agreement or the Restricted Shares. |
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12. |
Participant to Have No Rights as a Shareholder. Before the date as of which the Participant is recorded on the books of the Company as the holder of any Restricted Shares, the Participant will have no rights as a shareholder with respect to those Shares. |
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13. |
Notice . Any notice or other communication required or permitted under this Agreement must be in writing and must be delivered personally, sent by certified, registered or express mail, or sent by overnight courier, at the sender’s expense. Notice will be deemed given when delivered personally or, if mailed, three (3) days after the date of deposit in the United States mail or, if sent by overnight courier, on the regular business day following the date sent. Notice to the Company should be sent to: |
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Coty Inc. |
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Two Park Avenue |
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17 th Floor |
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New York, New York 10016 |
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Attention: General Counsel |
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Notice to the Participant should be sent to the address on file with the Company. Either party may change the Person and/or address to which the other party must give notice under this Section 13 by giving such other party written notice of such change, in accordance with the procedures described above. |
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14. |
Successors . All obligations of the Company under this Agreement will be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the business of the Company, or a merger, consolidation, or otherwise. |
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15. |
Governing Law . To the extent not preempted by federal law, this Agreement will be construed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction. |
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16. |
Plan Document Controls . The rights granted under this Agreement are in all respects subject to the provisions set forth in the Plan to the same extent and with the same effect as if set forth fully in this Agreement. If the terms of this Agreement conflict with the terms of the Plan document, the Plan document will control. |
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17. |
Amendment of the Agreement. This Agreement may be amended unilaterally by the Committee to the extent provided under the Plan, or by a written instrument signed by both parties. |
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18. |
Entire Agreement . This Agreement, together with the Plan, constitutes the entire obligation of the parties with respect to the subject matter of this Agreement and supersedes any prior written or oral expressions of intent or understanding with respect to such subject matter. |
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19. |
Administration. The Committee administers the Plan and this Agreement. The Participant’s rights under this Agreement are expressly subject to the terms and conditions of the Plan, including any guidelines the Committee adopts from time to time. The Participant hereby acknowledges receipt of a copy of the Plan. |
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20. |
Counterparts . The parties may execute this Agreement in one or more counterparts, both of which together shall constitute but one agreement. |
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21. |
Revocability . The Participant may by written notice to the Committee revoke this Agreement and his or her Restricted Share purchase at any time prior to the Investment Date. |
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IN WITNESS WHEREOF, the Company has duly executed this Agreement as of the date first written above.
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COTY INC. |
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By: |
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Name: Jules Kaufman |
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Title: SVP, General Counsel & Secretary |
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3
Exhibit 10.36
Matching Option Award
Terms and Conditions
Under
Coty Inc. Executive Ownership Plan
(as amended on April 8, 2013 and effective as of the Effective Date)
This instrument (the “ Terms and Conditions ”) evidences the grant effective on the date set forth in your individual portfolio in the Employee LTIP Portal (the “ Grant Date ”) of a Matching Option to you (the “ Participant ”), by Coty Inc., a Delaware corporation (the “ Company ”). Any term capitalized but not defined in these Terms and Conditions will have the meaning set forth in the Coty Inc. Executive Ownership Plan, as amended on April 8, 2013 (the “ Plan ”).
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1. |
Option Grant. In accordance with the terms of the Plan and subject to the terms and conditions of these Terms and Conditions, the Company hereby grants to the Participant as of the Grant Date a Matching Option (the “ Option ”) to purchase all or any part of an aggregate of the number of shares of the Company’s Shares set forth in your individual portfolio in the Employee LTIP Portal (the “ Option Shares ”). This Option is a nonqualified stock option and is not intended to be an incentive stock option within the meaning of Code Section 422. |
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2. |
Exercise Price. The Exercise Price of the Option will be the price per Share set forth in your total compensation letter. |
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3. |
Vesting and Exercisability of Option. The Participant may exercise this Option only after it has become vested and exercisable in accordance with the following: |
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(a) |
In General . The Option shall vest and become exercisable on the fifth anniversary of the Grant Date. |
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(b) |
Change in Control . If, within twelve months following a Change in Control, (i) the Participant is terminated by the Company or an employing Affiliate without Cause or (ii) the Participant resigns for Good Reason, the Option shall vest and become exercisable. |
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(c) |
Retirement, Death, or Disability . The Option shall vest and become exercisable to the extent provided in paragraph 7 in the event of the Participant’s termination of Service by reason of Retirement, death, or Disability. |
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4. |
Expiration. Subject to paragraph 7, the Option will expire on the tenth anniversary of the Grant Date (the “ Expiration Date ”). |
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5. |
Transferability of Option . |
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(a) |
Except as otherwise provided in Section 5(b), these Terms and Conditions or the Plan, (i) no Matching Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or |
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by the laws of descent and distribution, and (ii) all Matching Options shall be exercisable during the Participant’s lifetime only by the Participant or his or her guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with the evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant. |
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(b) |
Subject to applicable law, vested Matching Options may be transferred to a Successor. Such transferred Matching Options may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 5, and shall be subject in all respects to the these Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan. |
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6. |
Exercise of Option. |
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(a) |
Notice of Exercise . After the Option has become exercisable pursuant to paragraph 3, and while it remains exercisable in accordance with paragraph 7, the Participant may exercise the Option in whole or in part on any Exercise Date by delivering a signed, written exercise notice to the Company. The notice shall indicate the number of Shares being purchased. The Option must be exercised as to a whole number of Shares. |
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(b) |
Payment of Exercise Price . Unless the Option exercise is settled in cash, the Participant must pay the Exercise Price of the Option at the time of exercise as follows: (i) in cash or by check payable to the order of the Company; or (ii) by means of a cashless exercise procedure approved by the Committee; or (ii) a combination of the foregoing. |
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(c) |
Withholding Obligation . Unless the Option exercise is settled in cash, the withholding obligation upon the Participant’s exercise of the Option must be satisfied by paying the amount of required withholding to the Company. If the Participant does not pay the amount of required withholding to the Company, or if the Option exercise is settled in cash, the Company will withhold from the Shares delivered or from the cash payable to the Participant the minimum amount of funds required to cover any Withholding Tax required to be withheld by the Company by reason of such exercise of the Option. |
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(d) |
Use of Shares . Shares used to satisfy the Exercise Price and/or any required withholding tax (including Shares underlying surrendered Options) will be valued at their Fair Market Value, determined in accordance with the Plan. |
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(e) |
Condition of Transfer . The Company will issue no Shares pursuant to the Option before the Participant has paid the Exercise Price and any withholding obligation in full. |
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(f) |
Automatic Exercise . Any exercisable Option that has not been exercised by its holder shall be automatically exercised in accordance with subsection (b)(ii) hereof on the Exercise Date immediately prior to its expiration if, on such Exercise Date, there is a Matching Option Spread with respect to such Option. |
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7. |
Termination of Service. Upon termination of Service with the Company or an Affiliate, the Participant’s right to exercise the Option will be subject to the following rules: |
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(a) |
Retirement, Disability or Death . |
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(i) |
If the Participant’s Service terminates due to Retirement, Disability or death before the Option has otherwise become vested, then the Option shall immediately become vested and exercisable with respect to the Applicable Fraction of the Option Shares, and shall be immediately forfeited and canceled with respect to the remaining Option Shares. The “ Applicable Fraction ” means a fraction, the numerator of which is the number of days elapsed from the Grant Date of an Award to the date of the Participant’s termination of Service and the denominator of which is the number of days between the Grant Date and the date the Award was scheduled to become exercisable or otherwise vest. |
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(ii) |
The portion of an Option that is vested (whether by application of paragraph 7(a)(i) above or otherwise) on the date the Participant terminates Service due to Retirement, Disability or death may be exercised on an Exercise Date occurring on or before the second anniversary of the date of the Participant’s termination. |
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(b) |
Other Termination of Service . Except as provided in Section 3(b), if the Participant’s Service terminates for any reason other than Retirement, Disability or death, the Participant may exercise the Option to the extent that it was exercisable on the date of such termination on any Exercise Date on or before the later of the 90-day period following such termination. Any Option that is not vested on the date the Participant’s Service shall be immediately forfeited and canceled. |
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(c) |
Option Expiration . In no event may the Option be exercised after the Expiration Date. |
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8. |
Plan and Terms and Conditions Not a Contract of Employment or Service. Neither the Plan nor these Terms and Conditions is a contract of employment or Service, and no terms of the Participant’s employment or Service will be affected in any way by the Plan, these Terms and Conditions or related instruments, except to the extent specifically expressed therein. Neither the Plan nor these Terms and Conditions will be construed as conferring any legal rights on the Participant to continue to be employed or remain in |
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Service with the Company, nor will it interfere with any Company Party’s right to discharge the Participant or to deal with him or her regardless of the existence of the Plan, these Terms and Conditions or the Option. |
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9. |
Participant to Have No Rights as a Shareholder. Before the date as of which the Participant is recorded on the books of the Company as the holder of any Shares underlying the Option, the Participant will have no rights as a shareholder with respect to those Shares. |
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10. |
Notice. Any notice or other communication required or permitted under these Terms and Conditions must be in writing and must be delivered personally, sent by certified, registered or express mail, or sent by overnight courier, at the sender’s expense. Notice will be deemed given when delivered personally or, if mailed, three (3) days after the date of deposit in the United States mail or, if sent by overnight courier, on the regular business day following the date sent. Notice to the Company should be sent to: |
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Coty Inc. |
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Two Park Avenue |
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17 th Floor |
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New York, New York 10016 |
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Attention: General Counsel |
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Notice to the Participant should be sent to the address on file with the Company. Either party may change the Person and/or address to which the other party must give notice under this paragraph 10 by giving such other party written notice of such change, in accordance with the procedures described above. |
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Governing Law. To the extent not preempted by federal law, these Terms and Conditions will be construed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction. |
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Plan Document Controls. The rights granted under these Terms and Conditions are in all respects subject to the provisions set forth in the Plan to the same extent and with the same effect as if set forth fully in these Terms and Conditions. If the terms of these Terms and Conditions conflict with the terms of the Plan document, the Plan document will control. |
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Amendment of these Terms and Conditions. These Terms and Conditions may be amended unilaterally by the Committee to the extent provided under the Plan, or by a written instrument signed by both parties. |
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Entire Agreement. These Terms and Conditions, together with the Plan, constitute the entire obligation of the parties with respect to the subject matter of these Terms and Conditions and supersedes any prior written or oral expressions of intent or understanding with respect to such subject matter. |
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15. |
Administration. The Committee administers the Plan and these Terms and Conditions. The Participant’s rights under these Terms and Conditions are expressly subject to the terms and conditions of the Plan, including any guidelines the Committee adopts from time to time. The Participant hereby acknowledges receipt of a copy of the Plan. |
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COTY INC. |
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/s/ Michele Scannavini |
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Michele Scannavini |
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Chief Executive Officer |
5
Exhibit 10.37
COTY INC.
STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
1. Purpose
The purpose of the Coty Inc. Stock Plan for Non-Employee Directors (the “Plan”) is to promote the interests of Coty Inc. (the “Company”) and its stockholders by increasing the proprietary and vested interest of non-employee directors in the growth and performance of the Company by granting such directors options to purchase Class A Common Stock, $.01 par value (the “Shares”), of the Company.
2. Definitions
As used herein, the following terms shall have the following meanings:
“Affiliate” shall mean (i) any entity that, directly or indirectly, is controlled by the Company and (ii) any entity in which the Company has a significant equity interest, in either case as determined by the Committee.
“Board” shall mean the Board of Directors of the Company.
“Business Day” means any day other than a Saturday, Sunday, legal holiday or a day in which the national securities exchange that constitutes the principal market for the Shares is closed.
“Change of Control” shall have the same definition for purposes of this Plan as under the Company’s Long-Term Incentive Plan, or any successor plan thereto.
“Exchange Act” shall mean the Securities and Exchange Act of 1934, as amended.
“Committee” shall mean a committee of the Board designated by the Board to administer the Plan. If no such Committee has been designated, the Board shall be the Committee under the Plan.
“Fair Market Value” per Share shall mean, as of any date, (i) the most recent closing sales price per Share on the national securities exchange which constitutes the principal trading market for the Shares, or (ii) if the Shares are not then listed on a national securities exchange, such value as the Board may have determined.
“Option” shall mean a right to purchase Shares granted under and in accordance with Section 6.
3. Administration
The Plan shall be administered by the Committee. Subject to the provisions of the Plan, the Committee shall be authorized to interpret the Plan, to establish, amend, and rescind any rules and regulations relating to the Plan and to make all other determinations necessary or advisable for the administration of the Plan; provided, however, that the Committee shall have no discretion with respect to the selection of directors to receive Options, the number of Shares to be subject to Options, or the timing of grants of Options under the Plan, all of which shall be determined in accordance with the provisions of this Plan. The determinations of the Committee in the administration of the Plan, as described herein, shall be final and conclusive. The Secretary of the Company shall be authorized to implement the Plan in accordance with its terms and to take such actions of a ministerial nature as shall be necessary to effectuate the intent and purposes thereof. The validity, construction and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Delaware.
4. Eligibility
The class of individuals eligible to receive grants of Options under the Plan shall be directors of the Company who are not employees of the Company or its Affiliates (“Eligible Directors”). Directors who are employees, officers or directors of Joh. A. Benckiser GmbH shall be considered to be Eligible Directors, provided they are not also employees of the Company or its other Affiliates. Any holder of Options granted hereunder shall hereinafter be referred to as a “Participant.”
5. Shares Subject to the Plan
Subject to adjustment as provided in Section 8, an aggregate of 50,000 Shares shall be available for grant under the Plan. The Shares issued upon the exercise of Options may be made available from authorized but unissued Shares or treasury Shares.
6. Automatic Grants of Options
(a) Notwithstanding any other provision of the Plan, each Eligible Director shall be granted an Option to purchase 5,000 shares on the date he or she is first elected as a Director following the Plan’s Effective Date (hereafter defined) and shall automatically be granted on November 15 (or the preceding Business Day, if such date is not a Business Day) of each year an Option to purchase 2,000 Shares. Each such Option shall have a term of ten years. Each such Option shall become exercisable to the extent of one-third on each of the first, second and third anniversaries of the date of grant, but only to the extent the Participant is a director of the
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Company on each such anniversary. The option price for such an Option shall equal the Fair Market Value of one Share on the date the Option is granted.
(b) Such Option shall expire on the earlier of (i) the tenth anniversary of the date of grant or (ii) the first anniversary of the date the director ends his or her service as a director of the Company and shall also be exercisable in full upon (w) the Participant’s death, (x) the Participant’s disability, (y) the Participant’s retirement in accordance with the mandatory retirement age specified in the Company’s Bylaws or (z) a Change of Control of the Company. Such Option shall have such other terms and conditions not inconsistent with the foregoing as the Committee shall determine.
(c) Upon any valid exercise of an Option or any portion thereof prior to an initial public offering of the Company (“IPO”), an Eligible Director shall be entitled to receive only a payment in cash equal to the excess, if any, of the Fair Market Value, as of the exercise date, of the Shares underlying the Option or portion thereof so exercised over the aggregate exercise price of such Option or portion thereof. The payment of cash shall be made as promptly as practicable after an exercise in accordance herewith. The requirement to receive cash only under this Section shall cease and be of no further force or effect upon the consummation of the IPO.
7. Listing and Registration
Each Option shall be subject to the requirement that, if at any time the Committee shall determine, in its discretion, that the listing, registration or qualification of the Shares upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the granting of Options or the issuance or purchase of Shares upon exercise of Options, no Options may be exercised unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any condition not acceptable to the Committee.
The Committee may refuse to issue or transfer any Shares or other consideration upon exercise of an Option if, acting in its sole discretion, it determines that the issuance or transfer of such Shares or such other consideration might violate any applicable law or regulation or entitle the Company to recover any amount from the Participant under Section 16(b) of the Exchange Act, and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Option shall be promptly refunded to the relevant Participant or Successor (defined below). Without limiting the generality of the foregoing, no Option granted hereunder shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Committee in its sole discretion has determined that any such offer, if made, would be in compliance with all applicable requirements of the U.S. federal securities laws and any other laws to which such offer, if made, would be subject.
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8. Adjustments and Extraordinary Events
In the event of a stock split, stock dividend, subdivision or combination of the Shares, reorganization, reclassification, spin-off, partial liquidation, merger or other change in corporate structure affecting the Shares, the number of Shares subject to an Option granted under Section 6, the number and kind of Shares subject to any outstanding Option and the exercise price of any outstanding Option shall be increased or decreased proportionately, as the case may be, or shall otherwise be adjusted as determined by the Committee to be appropriate to avoid enhancement or diminution of the benefits intended to be provided to Eligible Directors under this Plan.
9. No Rights of Shareholders
Neither a Participant nor his or her legal representative shall be, or have any of the rights and privileges of, a Shareholder of the Company in respect to any Options unless and until certificates for the Underlying Shares shall have been issued.
10. Transferability
Other than (a) by will or the laws of descent and distribution, or (b) with respect to an Option, to the extent vested, by a transfer to the Participant’s spouse or lineal descendants or to any trust the beneficiaries of which consist only of the Participant, the Participant’s spouse and/or the Participant’s lineal descendants, each Option is nontransferable and may not be sold, assigned, transferred, disposed of, pledged or otherwise encumbered by the Participant. Any Participant’s successor (a “Successor”) shall take rights herein granted subject to the terms and conditions hereof, shall not sell, assign, transfer, dispose of, pledge or otherwise encumber an Option, and shall transfer any Shares acquired upon exercise of an Option only in compliance with applicable law. No transfer of an Option to any Successor shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by such Successor of the terms and conditions hereof.
11. Withholding
The Participant agrees to make appropriate arrangements with the Company for satisfaction of any applicable federal, state, local or foreign tax withholding requirements or like requirements, including the payment to the Company of all such taxes and requirements at the time of any exercise of an Option, and the Company shall have the right and is hereby authorized to withhold from the Shares deliverable to the Participant upon any such event or from any other compensation or other amount owing to the Participant such amount (in cash, Shares or other property, as the case may be) as may be necessary in the opinion of the Company to satisfy all such taxes and requirements.
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12. Option Agreements
Each Option granted hereunder shall be evidenced by an Option Agreement which shall be delivered to the Participant and shall specify the terms and conditions of the Option grant, and any rules applicable thereto. Each Option granted under the Plan shall be subject to the Company’s Insider Trading Policy, the terms of which are incorporated by reference herein and in each respective Agreement.
13. No Trust or Fund Created
The Plan and any Option grant shall not create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other person. To the extent that any person acquires a right to receive payments or distributions from the Company or any Affiliate pursuant to an Option grant, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate.
14. No Fractional Shares; Lot Size
No fractional Shares shall be issued or delivered pursuant to the Plan or any Option, and the Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled, terminated, or otherwise eliminated. Any exercise hereunder shall be in a lot of 500 or more Shares.
15. Headings
Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
16. Plan Amendments
The Plan may be terminated or, subject to Section 3 herein, amended by the Board, as it shall deem advisable or to conform to any change in any law or regulation applicable thereto.
17. Effective Date and Duration of Plan
The Plan shall become effective as of November 1, 2001 (the “Effective Date”). The Plan shall terminate on the tenth anniversary of the Effective Date, unless the Plan is extended or terminated at an earlier date by the Shareholders or is terminated by exhaustion of the Shares available for issuance hereunder.
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Exhibit 10.38
COTY INC.
NONQUALIFIED STOCK OPTION AGREEMENT
NONQUALIFIED STOCK OPTION AGREEMENT (the “Agreement”) dated as of [__________] (the “Date of Grant”), between Coty Inc., a Delaware corporation (the “Company”), and [__________] (the “Optionee”):
R E C I T A L S:
The Company has adopted the Coty Inc. Stock Plan for Non-Employee Directors (the “Plan”), which Plan is incorporated herein by reference and made a part of this Agreement. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan.
The Company has determined that it is in the best interests of the Company and its stockholders to grant the option provided for herein to the Optionee pursuant to the Plan and the terms set forth herein as an increased incentive to contribute to the Company’s future success and prosperity.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows:
1. Grant of the Option . (a) The Company hereby grants to the Optionee, an option (the “Option”) which permits the Optionee to purchase all or any part of an aggregate of [__________] Shares ([__________]) at a purchase price of U.S. $[__________] per share (the “Exercise Price”). The Option granted hereby is intended to be a Non-Qualified Stock Option and not an Incentive Stock Option.
2. Vesting . (a) Subject to subparagraph (b) below and Section 4 hereof, one-third (1/3) of the Option shall become exercisable as of each of the first, second and third anniversaries of the Date of Grant. At any time, the “Vested Portion” of the Option means that portion which (i) shall have become exercisable pursuant to the terms of this Agreement and (ii) shall not have been previously exercised.
(b) Notwithstanding the provisions of subparagraph (a) above, the Committee may at any time, in its sole discretion, accelerate the vesting and exercisability of any unvested portion of the Option.
3. Exercise of Option . (a) Subject to the provisions of the Plan and this Agreement (including Section 3(e) and Section 4 hereof), the Optionee may exercise all or any part of the Vested Portion of the Option at any time prior to the tenth anniversary of the Date of Grant (the “Expiration Date”); provided that the Option may be exercised with respect to whole Shares only and only in lots of [__________] or more Shares. In no event shall the Option be exercisable on or after the Expiration Date.
(b) To the extent set forth in subparagraph (a) above, the Option may be exercised by delivering to the Company at its principal office written notice of intent to exercise. Such notice shall specify the number of Shares for which the Option is being exercised and shall be accompanied by payment in full, or adequate provision therefor, of the Exercise Price and any applicable withholding tax. The payment of the Exercise Price shall be made (i) in cash or (ii) by certified check or bank draft payable to the order of the Company or (iii) by tendering Shares which have been owned by the Optionee for at least six months (which are not the subject of any pledge or other security interest) or (iv) by a combination of the foregoing, provided that the combined value of all cash and cash equivalents and the Fair Market Value of any such Shares so tendered to the Company as of the date of such tender is at least equal to the Exercise Price. The payment of withholding tax shall be subject to the Plan.
(c) Notwithstanding any other provision of the Plan or this Agreement to the contrary, no Option may be exercised prior to the completion of any registration or qualification of such Option or the Shares under applicable state and federal securities or other laws, or under any ruling or regulation of any governmental body or national securities exchange, that the Committee shall in its sole discretion determine to be necessary or advisable.
(d) Upon the Company’s determination that the Option has been validly exercised as to any of the Shares, the Company shall issue or cause to be issued as promptly as practicable certificates in the Optionee’s name for such Shares. However, the Company shall not be liable to the Optionee for damages relating to any delays in issuing the certificates to him, any loss of the certificates, or any mistakes or errors in the issuance of the certificates or in the certificates themselves.
(e) Notwithstanding the foregoing, the provisions of this Section 3(e) shall apply to the Option prior to an initial public offering of the Shares (the “IPO”) and terms not defined
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herein shall be as defined in the Coty Inc. Long-Term Incentive Plan (the “LTIP”). Upon becoming exercisable in accordance with Sections 2 or 4 of this Agreement, the Option may be exercised prior to the IPO only as of a Valuation Date. Upon a valid exercise of all or any portion of the Option as of any Valuation Date prior to the IPO, the Optionee shall receive from the Company, in lieu of any Shares, only a payment in cash equal to the excess, if any, of the Fair Market Value, as of the Valuation Date of exercise, of the Shares underlying the Option or portion thereof so exercised over the aggregate exercise price of such Option or portion thereof. Payment of such amount shall be made as promptly as practicable after Fair Market Value is determined and shall extinguish any further obligation of the Company in respect of such Option or portion thereof. Prior to the IPO, the Company shall not deliver Shares upon exercise of the Option.
4. Termination of Service . (a) Subject to subparagraph (c) below, in the event that the Optionee’s service as a director of the Company is terminated by reason of (i) death, (ii) Disability (as defined in the LTIP) or (iii) he or she having reached the mandatory retirement age specified in the Company’s Bylaws, the unvested portion of the Option shall vest and such portion of the Option shall remain exercisable until the end of the first year following such termination of service.
(b) Subject to subparagraph (c) below, in the event that the Optionee’s service as a director of the Company is terminated for any reason other than those described in (a) above, any unvested portion of the Option as of the date of such termination shall be deemed canceled and forfeited on the date of Optionee’s termination of service as a director and the Vested Portion, if any, of the Option as of the date of such termination shall remain exercisable for a period of ninety (90) days following such termination of service as a director, and shall thereafter be deemed canceled and forfeited.
(c) Notwithstanding the foregoing, (i) the Committee may, but shall not be required to, provide at any time that any portion of the Option may be exercised after the periods provided for in this Section 4, but in no event on or after the Expiration Date and (ii) no provision in this Section 4 shall extend the exercise period of the Option beyond or to include the Expiration Date.
5. Change of Control . Upon a Change of Control (as defined in the LTIP) of the Company, the unvested portion of the Option shall vest.
6. No Right to Continued Service; No Rights as a Stockholder . Neither the Plan nor this Agreement shall confer on the Optionee any right to continued service as a director of the Company. The Optionee shall not have any rights as a stockholder with respect to any Shares subject to the Option prior to the date of exercise of the Option.
7. Securities Laws . Upon the acquisition of any Shares pursuant to the exercise of the Option, the Optionee or his Successor will make or enter into such written representations,
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warranties and agreements as the Company may reasonably request in order to comply with applicable securities laws, with this Agreement, with the Company’s Insider Trading Policy or as the Company otherwise deems necessary or advisable.
8. Notices . Any notice, request, instruction or other document given under this Agreement shall be in writing and shall be addressed and delivered, in the case of the Company, to the Secretary of the Company at the principal office of the Company and, in the case of the Optionee, to Optionee’s address as shown in the records of the Company or to such other address as may be designated in writing by either party.
9. Option Subject to Plan . The Option is subject to the Plan including, without limitation, the terms of the Company’s Insider Trading Policy incorporated therein. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement. By execution of this Agreement, the Optionee acknowledges receipt of a copy of the Plan and the Company’s Insider Trading Policy.
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COTY INC. |
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By |
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Name: |
Peter Harf |
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Title: |
Chairman |
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OPTIONEE |
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Name: |
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4
Exhibit 10.39
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COTY INC. |
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2007 STOCK PLAN FOR DIRECTORS |
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(As Amended and Restated April 8, 2013) |
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SECTION 1 |
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PURPOSE AND DURATION |
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1.1 |
Purpose. The purpose of this Coty Inc. 2007 Stock Plan for Directors is to promote the interests of the Company and its shareholders by increasing the proprietary and vested interest of eligible directors of the Company by granting them Restricted Stock Unit Awards. |
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1.2 |
Effective Date and Term of the Plan . |
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(a) |
The original effective date of the Plan was September 1, 2007. The effective date of this amended and restated plan document is the Effective Date. |
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(b) |
The Plan will terminate upon the earliest of (i) September 14, 2020, (ii) the date on which all Shares available for issuance under the Plan have been issued pursuant to the award of Restricted Stock Units and Pre-2008 Stock Options under the Plan, or (iii) the date specified by action of the Board. Upon such Plan termination, all Awards outstanding under the Plan will continue to have full force and effect in accordance with the terms of the Restricted Stock Unit Terms and Conditions evidencing each Award. |
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SECTION 2 |
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DEFINITIONS |
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Whenever used in the Plan, the following terms have the meanings set forth below: |
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2.1 |
“Award” means a grant of Restricted Stock Units under the Plan to a Participant. |
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2.2 |
“Board” means the Board of Directors of the Company. |
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2.3 |
“Business Day” means any day other than a Saturday, Sunday, legal holiday or a day in which the national securities exchange that constitutes the principal market for the Shares is closed. |
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2.4 |
“Change in Control” means the occurrence of any of the following that also qualifies as a “change in control event” under Treasury Regulation § 1.409A-3(i)(5): |
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(a) |
Any Person or “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) that is not the Majority Shareholder is or becomes the “beneficial owner” (as defined below), directly or indirectly, of securities representing either (i) more than 50% of the combined voting power of the Company’s then outstanding securities, or (ii) 30% or more of the combined voting power of the Company’s then outstanding securities at a time when the Majority Shareholder holds less than 30% of |
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such combined voting power. For purposes of this clause (a), “beneficial owner” has the meaning given that term in Rule 13d-3 under the Exchange Act, except that a Person shall be deemed to be the “beneficial owner” of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants, options or otherwise, without regard to the 60-day period referred to in such Rule; |
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(b) |
The date a majority of the members of the Board is replaced during any 12-month period by directors, provided, that any Person becoming a director whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least three-quarters of the directors then comprising the Board shall be, for purposes of this clause (b), considered as though such Person were a member of the incumbent Board; and provided , further , that this clause (b) shall not apply as long as the Majority Shareholder is the beneficial owner of a majority of the voting power of the Company’s then outstanding securities; or |
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(c) |
The shareholders of the Company approve a plan or agreement providing (i) for a merger or consolidation of the Company other than with a wholly owned subsidiary and other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 51% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (ii) for a sale, exchange or other disposition of all or substantially all of the business or assets of the Company. If any of the events enumerated in this clause (d) occurs, the Board shall determine the effective date of the Change in Control resulting therefrom for purposes of this Plan. |
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2.5 |
“Committee” means the Remuneration and Nominating Committee of the Board or any successor committee with responsibility for compensation, or any subcommittee, as long as the number of Committee members and their qualifications shall at all times be sufficient to meet the independence requirements of the New York Stock Exchange, Inc. or any other applicable exchange on which the Company’s common equity is at the time listed. |
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2.6 |
“Company” means Coty Inc., a Delaware corporation, and any successor thereto as provided in Section 10.1. |
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2.7 |
“Designated Beneficiary” means the Person or Persons the Participant designates from time to time on a signed form prescribed by the Committee, properly filed with the Committee during the Participant’s lifetime, as the beneficiary of any amounts or benefits the Participant owns or is to receive under the Plan, in accordance with Section 8.1. A properly filed beneficiary designation will revoke all prior designations by the same Participant. If no such form has been filed with the Committee, the Designated Beneficiary shall be the beneficiary named by the Participant in the Company’s qualified 401(k) savings plan or, if none, the Beneficiary’s estate. |
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2.8 |
“Director” means a member of the Company’s Board of Directors. |
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2.9 |
“Disability” means either (i) disability as defined for purposes of the Company’s disability benefit plan, or (ii) a Participant’s inability, as a result of physical or mental incapacity, to perform the duties of his or her position on the Board for a period of six consecutive months or for an aggregate of six months in any consecutive 12-month period. Any question as to the existence of the Disability of a Participant as to which the Participant and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to the Participant and the Company. If the Participant and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and the Participant shall be final and conclusive for all purposes of the Plan. Following a Change in Control, the Company shall pay all expenses incurred in the determination of whether a Participant is disabled. |
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2.10 |
“Eligible Director” means a Director other than a Director who is CEO or President of the Company. |
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2.11 |
“Effective Date” means the date on which the Amended and Restated Certificate of Incorporation of the Company that is contemplated to be adopted by the Company in connection with the first underwritten public offering of the Company’s common stock is filed with the Secretary of State of the State of Delaware. |
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2.12 |
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto. |
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2.13 |
“Exercise Date” means a date on which stock options granted under the Coty Inc. Long- Term Incentive Plan, as amended from time to time, may be exercised. |
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2.14 |
“Exercise Price” means the price at which a Participant may purchase a Share pursuant to a Stock Option. |
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2.15 |
“Fair Market Value” as it relates to a Share means, unless otherwise determined by the Committee, the most recent closing price of a Share on the principal national securities exchange on which the Shares are then listed, or if there were no sales on such date, on the next preceding day on which there were sales, or if such Shares are not listed on a national securities exchange, the last reported bid price in the over-the-counter market. |
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2.16 |
“Grant Date” means the date on which an Award is granted. |
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2.17 |
“Majority Shareholder” means (i) the Company’s majority shareholder as of the Effective Date or (ii) a Benckiser Permitted Holder as defined in the Company’s Certificate of Incorporation effective on the Effective Date or any other similarly situated Person as determined by the Committee. |
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2.18 |
“Owned Shares” means Shares that a Participant has acquired as a result of the vesting of Restricted Stock Units or the exercise of Pre-2008 Stock Options. |
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2.19 |
“Participant” means a Person to whom Restricted Stock Units or Pre-2008 Stock Options have been granted under the Plan. |
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2.20 |
“Person” means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization and any other entity, whether foreign or domestic, including any governmental entity or any department, agency or political subdivision thereof. |
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2.21 |
“Plan” means this Coty Inc. 2007 Stock Plan for Directors, as amended from time to time. |
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2.22 |
“Pre-2008 Stock Option” or “Stock Option” means a right granted to a Participant before 2008 to purchase Shares granted under the Predecessor Plan. |
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2.23 |
“Predecessor Plan” means the former Stock Plan for Non-Employee Directors. |
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2.24 |
“Restricted Stock Unit” means a right to receive a Share under the terms and conditions set forth in Section 5. |
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2.25 |
“Restricted Stock Unit Agreement” means any agreement or other instrument or document evidencing an Award. |
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2.26 |
“Restriction Period” means the period during which Restricted Stock Units are not vested. |
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2.27 |
“Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended from time to time, and the regulations and other interpretive guidance issued thereunder. |
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2.28 |
“Service” means the provision of services as a Director. |
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2.29 |
“Share” means a share of the Class A Common Stock, par value $.01 per share, of the Company, or such other securities of the Company as may be designated by the Committee from time to time. |
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2.30 |
“Stock Option Spread” means the amount by which the Fair Market Value, as of any date, of the Shares to which a Stock Option applies exceeds the Exercise Price with respect to such Shares. |
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2.31 |
“Successor” means the Participant’s spouse, the Participant’s lineal descendants and/or any trust the beneficiaries of which consist only of the Participant, the Participant’s spouse and/or the Participant’s lineal descendants, or to a corporation in which the Participant, the Participant’s spouse and/or the Participant’s lineal descendants own 100% of the economic interest and has the unfettered right to prevent further transfer or disposition of the Restricted Stock Unit or Stock Option, as applicable. The Committee may, in its discretion, deem other parties to qualify as a Successor for purposes of this Plan. |
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2.32 |
“Terms and Conditions” means any electronic or written agreement or other instrument or document evidencing an Award. |
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2.33 |
“Valuation Date” means any Business Day. |
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2.34 |
“Withholding Tax” means the aggregate federal, state and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising under the Plan. |
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SECTION 3 |
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Administration |
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3.1 |
Plan Administration. The Plan shall be administered by the Committee. |
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3.2 |
Authority of the Committee. Except as limited by law or the by-laws of the Company, and subject to the provisions of the Plan, the Committee shall have full power and discretion to (a) determine the terms and conditions of Awards in a manner consistent with the Plan; (b) construe and interpret the Plan and any agreement or instrument entered into under the Plan; (c) establish, amend or waive rules and regulations for the Plan’s administration; (d) subject to the provisions of Section 9.1, amend the terms and conditions of any outstanding Award to the extent the terms are within the Committee’s authority under the Plan; and (e) make all other determinations that may be necessary or advisable to administer the Plan. Notwithstanding the foregoing, the Committee shall have no discretion with respect to the selection of Directors eligible to receive Restricted Stock Units, the number of Shares of Restricted Stock Units awarded to a Director, or the timing of grants of Restricted Stock Units under the Plan, all of which shall be determined in accordance with the provisions of this Plan. The Secretary of the Company shall be authorized to implement the Plan in accordance with its terms and to take such actions of a ministerial nature as shall be necessary to effectuate the intent and purposes thereof. |
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3.3 |
Decisions Binding. All determinations and decisions made by the Committee or by a Person or Persons delegated authority by the Committee pursuant to the provisions of the Plan shall be final, conclusive and binding on all Persons, including, without limitation, the Company, and its shareholders, affiliates, employees, and Participants and their estates and beneficiaries. |
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SECTION 4 |
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Shares Subject to the Plan |
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4.1 |
Number of Shares Available for Grants. Subject to adjustment as provided in Section 4.3, the number of shares available for grant under the Plan shall be 1,000,000 Shares plus the number of Shares subject to awards outstanding as of the Effective Date. |
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4.2 |
Forfeited Awards. If any Award granted under the Plan is canceled or forfeited for any reason, any Shares subject to the Award shall again be available for the grant of an Award under the Plan. |
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4.3 |
Adjustments in Authorized Shares. If the Shares, as currently constituted, are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether because of a merger, consolidation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise, but not including an IPO or other capital infusion from any source) or if the number of Shares is increased through the payment of a stock dividend, then the Committee shall substitute for or add to each Share that may become subject to an Award the number and kind of shares of |
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stock or other securities into which each outstanding Share was changed, for which each such Share was exchanged, or to which each such Share is entitled, as the case may be. |
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4.4 |
Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares. |
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SECTION 5 |
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Automatic Grants of Restricted Stock Units |
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5.1 |
Grant of Restricted Stock Units. |
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(a) |
Full Awards . Each Person who is an Eligible Director as of the first day of a fiscal year of the Company shall be granted 10,000 Restricted Stock Units on November 15 of such fiscal year. The Chairman of the Board of the Company (“ Chairman ”) shall be granted on each such date an additional 20,000 Restricted Stock Units. |
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(b) |
Prorated Awards . |
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(i) |
Each Person who becomes an Eligible Director after the first day (but before the last day) of a fiscal year shall receive within 15 days after becoming an Eligible Director a grant of 10,000 Restricted Stock Units multiplied by a fraction, the numerator of which is the number of days between the Eligible Director’s commencement of Service during the fiscal year and the last day of such fiscal year, and the denominator of which is the number of days between the Grant Date and the date the Award was scheduled to vest. |
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(ii) |
Each Person who becomes Chairman after the first day (but before the last day) of a fiscal year shall receive within 15 days after becoming Chairman a grant of 20,000 Restricted Stock Units multiplied by a fraction, the numerator of which is the number of days between the date the Person becomes Chairman and the last day of such fiscal year, and the denominator of which is the number of days between the Grant Date and the date the Award was scheduled to vest. |
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5.2 |
Restricted Stock Unit Terms and Conditions. Each grant of Restricted Stock Units shall be evidenced by a Restricted Stock Unit Terms and Conditions that specifies the Restriction Period, the number of Shares to which such Restricted Stock Units pertain, the purchase price, if any, and such other provisions as the Committee determines. |
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5.3 |
Restriction Period. |
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(a) |
In General . The Restriction Period for Restricted Stock Units is the five-year period commencing on the Grant Date. |
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(b) |
Change in Control . If a Change in Control occurs, the Restriction Period shall immediately end and the Participant’s Restricted Stock Units shall become fully vested immediately; |
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(c) |
Death or Disability . If a Participant’s Service is terminated by reason of such Participant’s death or Disability, the Restriction Period shall immediately end and the Participant’s Restricted Stock Units shall become fully vested immediately. |
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(d) |
Termination of Service for Reasons other than Death or Disability . In the event the Participant’s Service terminates other than by reason of the Participant’s death or Disability prior to a Change in Control, then notwithstanding any provision in the Plan or these Terms and Conditions to the contrary, the Restricted Stock Units granted to the Participant shall become fully vested immediately except that all Restricted Stock Units granted within one year prior to the date of termination of the Participant’s Service shall become fully vested with respect to the Applicable Fraction of the Restricted Stock Units and shall be immediately forfeited and canceled with respect to the remaining Restricted Stock Units. The “ Applicable Fraction ” means a fraction, the numerator of which is the number of days elapsed from the first day of the fiscal year of the Company in which the Participant’s Service terminated and the denominator of which is 365. |
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5.4 |
Nontransferability. |
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(a) |
Except as provided in Section 5.4(b), during the Restriction Period, (i) no Restricted Stock Units granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution and (ii) all rights with respect to Restricted Stock Units shall be available during the Participant’s lifetime only to the Participant or the Participant’s guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant. |
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(b) |
Subject to applicable law, Restricted Stock Units may be transferred to a Successor. Such transferred Restricted Stock Units may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with the terms of this Section 5.4, and shall be subject in all respects to the terms of the Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan. |
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5.5 |
Settlement of Units. Within fifteen (15) days after the end of the Restriction Period for Restricted Stock Units, the Company shall deliver to the Participant for each Restricted Stock Unit one Share (thereafter an Owned Share) and the amount of dividends, dividend equivalents and other distributions paid with respect to a Share during the vesting period beginning on the Grant Date. |
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SECTION 6 |
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Pre-2008 Stock Options |
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6.1 |
In General. Pre-2008 Stock Options shall remain subject to the terms of the Predecessor Plan and the award agreements under which they were granted, subject to the modifications set forth in this Section 6. Any Shares acquired upon the exercise of Pre-2008 Stock Options shall be subject to the provisions of Section 7. |
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6.2 |
Exercise of Stock Options. The holder of an exercisable Stock Option may exercise the Stock Option only by delivering a written notice of exercise to the Company setting forth the number of Shares as to which the Stock Option is to be exercised. Upon the Exercise Date, the holder shall pay or provide for the Exercise Price and applicable Withholding Tax in full, pursuant to such procedures established by the Committee from time to time after giving consideration to applicable tax, securities and accounting rules. Any exercisable Stock Option that has not been exercised in accordance with this Section 6.2 on the Exercise Date immediately prior to its expiration if, on such Exercise Date, there is a Stock Option Spread with respect to such Stock Option. |
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6.3 |
No Repricing. In no event will the Committee, unless otherwise approved by shareholders, be permitted (i) to reduce the Exercise Price of any outstanding Stock Option, (ii) cancel a Stock Option in exchange for cash or other Awards (except as provided in Section 7.7), (iii) exchange or replace an outstanding Stock Option with a new Stock Option with a lower Exercise Price, or (iv) take any other action that would be a “repricing” of Stock Options. |
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6.4 |
NonTransferability. Subject to applicable law, vested Stock Options may be transferred to a Successor. Such transferred Stock Options may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 6.4, and shall be subject in all respects to the terms of the award agreement under which the Stock Options were granted or Predecessor Plan, as applicable, and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan. |
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SECTION 7 |
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Purchase and Sale Rights |
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7.1 |
Restrictions. The Committee may impose such restrictions on any Owned Shares as it deems necessary or advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which the Shares are then listed and/or traded, and under any blue sky or state securities laws. |
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7.2 |
Additional Conditions of Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or transferred, or (ii) to treat as owner of such Shares, to accord the right to vote as such owner, or to pay dividends to any transferee to whom such Shares have been transferred in violation of the Plan. |
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SECTION 8 |
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Beneficiary Designation |
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8.1 |
Each Participant may, from time to time, name any Designated Beneficiary (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case the Participant should die before receiving any or all of his or her benefits under the Plan. Each beneficiary designation shall revoke all prior designations by the same Participant, must be in a form prescribed by the Committee and must be made during the Participant’s lifetime. |
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SECTION 9 |
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Amendment, Modification and Termination; Adjustments |
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9.1 |
Amendment, Modification and Termination. The Board may at any time and from time to time alter, amend, modify or terminate the Plan in whole or in part, without the approval of the Company’s shareholders, except to the extent such approval is required by law. Subject to the terms and conditions of the Plan, the Committee may modify, extend or renew outstanding Awards under the Plan, or accept the surrender of outstanding Awards (to the extent not already exercised) and grant new Awards in substitution of them (to the extent not already exercised), in order to comply with the requirements of applicable law or otherwise. Notwithstanding the foregoing, no modification of an Award shall, without the prior written consent of the Participant, materially alter or impair any rights or obligations under any Award already granted under the Plan, except such an amendment made to comply with the requirements of applicable law. |
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9.2 |
Adjustment of Awards Upon the Occurrence of Certain Events . |
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(a) |
In General . If the Shares, as currently constituted, are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether because of a merger, consolidation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise, but not including a capital infusion from any source) or if the number of Shares is increased through the payment of a stock dividend, then the Committee shall substitute for or add to each Share underlying a Participant’s Restricted Stock Units the number and kind of shares of stock or other securities into which each outstanding Share was changed, for which each such Share was exchanged, or to which each such Share is entitled, as the case may be. |
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(b) |
Notice . The Committee shall give notice of any adjustment to each Participant who holds an Award that has been adjusted and the adjustment (whether or not such notice is given) shall be effective and binding for all Plan purposes. |
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9.3 |
Fractional Shares. Fractional Shares, whether resulting from any adjustment in Awards pursuant to Section 9.2 or otherwise, may be settled in cash or otherwise as the Committee determines. |
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9.4 |
Corporate Transaction . Any Award that has not been fully exercised before the date of a Change in Control may be settled or otherwise terminated on such date in the discretion of the |
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Committee, unless a provision has been made in writing in connection with such transaction for the assumption of all Awards theretofore granted, or the substitution for such Awards of awards to acquire the stock of the surviving, resulting or acquiring corporation, with any adjustments as the Committee determines appropriate, in which event the Awards theretofore granted shall continue in the manner and under the terms so provided. Notwithstanding anything in the Plan to the contrary, any underwater Award that has not been fully exercised, and any Award that the Committee determines cannot become vested, before the date of consummation of the Change in Control may be canceled without consideration in the discretion of the Committee. |
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9.5 |
Tax Withholding. The Company shall have the right to deduct or withhold, or require a Participant to remit to the Company, an amount (either in cash or Shares) sufficient to satisfy any Withholding Tax. |
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SECTION 10 |
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Miscellaneous Provisions |
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10.1 |
Successors. All obligations of the Company under the Plan or any Restricted Stock Unit Agreement shall be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the Company’s stock, or a merger or consolidation, or otherwise. |
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10.2 |
Legal Construction. |
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(a) |
Number . Except where otherwise indicated by the context, any plural term used in the Plan includes the singular and any singular term includes the plural. |
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(b) |
Severability . If any provision of the Plan is held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. |
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10.3 |
Business Day. In the event the day prescribed for the performance of any act under the Plan, or deadline by which such act must be performed, shall fall on a day other than a Business Day, such day or deadline shall be extended until the close of business on the next succeeding Business Day. |
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10.4 |
Requirements of Law. The granting of Awards, the issuance of Shares and the payment of cash under the Plan shall be subject to all applicable laws, rules and regulations, and to any approvals by governmental agencies or national securities exchanges as may be required. |
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10.5 |
Rights of a Shareholder. A Participant shall not be, nor shall a Participant have any of the rights and privileges of, a shareholder until certificates for Shares have been issued upon settlement of Restricted Stock Units. |
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10.6 |
Securities Law Compliance. |
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(a) |
As to any individual who is, on the relevant date, an officer, director or greater than 10% percent beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange Act, transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 under the Exchange Act, or any successor rule. To the extent any provision of the Plan or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee. |
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(b) |
To the extent the Committee deems it necessary, appropriate or desirable to comply with state securities laws or practice and to further the purposes of the Plan, the Committee may, without amending the Plan, (i) establish rules applicable to Awards granted to Participants, including rules that differ from those set forth in the Plan, and (ii) grant Awards to such Participants in accordance with those rules that would require the application of the securities laws of any state. |
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10.7 |
Unfunded Status of the Plan. The Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments or deliveries of Shares not yet made to a Participant by the Company, the Participant’s rights are no greater than those of a general creditor of the Company. The Committee may authorize the establishment of trusts or other arrangements to meet the obligations created under the Plan, so long as the arrangement does not cause the Plan to lose its legal status as an unfunded plan. |
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10.8 |
Section 409A. Restricted Stock Units are intended to qualify for exemption from, or to comply with the requirements of, Section 409A, and the Plan shall be interpreted in a manner consistent with such intent. References in the Plan to a termination of “Service” and similar expressions shall mean a “separation from service” within the meaning of Section 409A. In the event that (i) the Committee determines that (x) any stock of the Company is publicly traded on an established securities market or otherwise, (y) the Participant is a “specified employee” within the meaning of Section 409A and (z) the Participant’s Restricted Stock Units do not qualify for exemption from Section 409A; and (ii) settlement of the Participant’s Restricted Stock Units is the result of the Participant’s separation from Service, then notwithstanding any provision herein or in the Participant’s Restricted Stock Unit Agreement to the contrary payment in settlement of such Restricted Stock Units shall be postponed until six months after the date of such separation from Service or, if earlier, the date of the Participant’s death. |
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10.9 |
Governing Law. To the extent not preempted by Federal law, the Plan and all agreements hereunder shall be construed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction. |
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Exhibit 10.40
Adoption
of Amendments to
Pre-2008 Stock Options
Granted Under the Coty Inc. 2007 Stock Plan for Directors
Or the Coty Inc. Stock Plan for Non-Employee Directors
(applicable to awards outstanding on September 14, 2010)
| D. | The undersigned officer has determined that the form of amendment to the Pre-2008 Stock Options attached hereto as Exhibit A is appropriate to implement such actions of the Board. |
NOW THEREFORE by this instrument the Company hereby amends and restates each of the Outstanding Awards in the manner set forth in Exhibit A hereto.
By: _ /s/ Jules Kaufman _________________
Name: _ Jules Kaufman _________________
Title: __ SVP, General Counsel & Secretary
Date: __ April 8, 2013___________________
1
Amendment
To
Pre-2008 Stock Options
Granted Under the Coty Inc. 2007 Stock Plan for Directors
Or the Coty Inc. Stock Plan for Non-Employee Directors
(applicable to Stock Options outstanding on September 14, 2010)
This Amendment to the terms of the award (the “ Award ”) granting the Participant stock options (the “ Pre-2008 Stock Options ”) under the Coty Inc. 2007 Stock Plan for Directors (as amended, the “ Plan ”) or under the Coty Inc. Stock Plan for Non-Employee Directors (the “ Predecessor Plan ”) is effective September 14, 2010.
2
Exhibit 10.41
Restricted
Stock Unit Award
Under
Coty Inc. 2007 Stock Plan for Directors
(as amended on April 8, 2013 and effective as of the Effective Date)
This instrument (the “ Terms and Conditions ”) evidences the grant effective on the date set forth in your compensation letter (the “ Grant Date ”) of an award of the number of Restricted Stock Units set forth in your compensation letter (the “ Restricted Stock Units ”) to you (the “ Participant ”) by Coty Inc., a Delaware corporation (the “ Company ”). Any term capitalized but not defined in these Terms and Conditions will have the meaning set forth in the Coty Inc. 2007 Stock Plan for Directors, as amended effective as of the Effective Date (the “ Plan ”).
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1. |
Restricted Stock Unit Grant. The Participant is hereby granted the Restricted Stock Units as of the Grant Date. The Restricted Stock Units, and any Shares acquired upon settlement thereof, are subject to the following terms and conditions and to the provisions of the Plan, the terms of which are incorporated by reference herein. |
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2. |
Restriction Period. |
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(a) |
In General . The Restriction Period for the Restricted Stock Units is the five-year period commencing on the Grant Date. |
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(b) |
Change in Control . If a Change in Control occurs, the Restriction Period shall immediately end and the Participant’s Restricted Stock Units shall become fully vested immediately. |
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(c) |
Death or Disability . If a Participant’s Service is terminated by reason of such Participant’s death or Disability, the Restriction Period shall immediately end and the Participant’s Restricted Stock Units shall become fully vested immediately. |
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(d) |
Termination of Service for Reasons other than Death or Disability . In the event the Participant’s Service terminates other than by reason of the Participant’s death or Disability prior to a Change in Control, then notwithstanding any provision in the Plan or these Terms and Conditions to the contrary, the Restricted Stock Units granted to the Participant shall become fully vested immediately except that all Restricted Stock Units granted within one year prior to the date of termination of the Participant’s Service shall become fully vested with respect to the Applicable Fraction of the Restricted Stock Units and shall be immediately forfeited and canceled with respect to the remaining Restricted Stock Units. The “ Applicable Fraction ” means a fraction, the numerator of which is the number of days elapsed from the first day of the fiscal year of the Company in which the Participant’s Service terminated and the denominator of which is 365. |
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3. |
Nontransferability. |
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(a) |
Except as provided in Section 3(b), during the Restriction Period, (i) no Restricted Stock Units granted under the Plan may be sold, transferred, pledged, assigned, or |
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otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution and (ii) all rights with respect to Restricted Stock Units shall be available during the Participant’s lifetime only to the Participant or the Participant’s guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant. |
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(b) |
Subject to applicable law, Restricted Stock Units may be transferred to a Successor. Such transferred Restricted Stock Units may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with the terms of this Section 3, and shall be subject in all respects to the terms of these Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan. |
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4. |
Settlement of Restricted Stock Units. Within fifteen (15) days after the end of the Restriction Period for Restricted Stock Units, the Company shall deliver to the Participant for each Restricted Stock Unit one Share (thereafter an Owned Share) and the amount of dividends, dividend equivalents and other distributions paid with respect to a Share during the vesting period beginning on the Grant Date. |
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5. |
Securities Law Requirements. |
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(a) |
If at any time the Committee determines that issuing Shares would violate applicable securities laws, the Company will not be required to issue such Shares. The Committee may declare any provision of these Terms and Conditions or action of its own null and void, if it determines the provision or action fails to comply with the short-swing trading rules. As a condition to exercise, the Company may require the Participant to make written representations it deems necessary or desirable to comply with applicable securities laws. |
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(b) |
No Person who acquires Shares under these Terms and Conditions may sell the Shares, unless they make the offer and sale pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “ Securities Act ”), which is current and includes the Shares to be sold, or an exemption from the registration requirements of the Securities Act. |
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6. |
No Limitation on Rights of the Company. The grant of the Restricted Stock Units does not and will not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets. |
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7. |
Participant to Have No Rights as a Shareholder. Before the date as of which the Participant is recorded on the books of the Company as the holder of any Shares, the Participant will have no rights as a shareholder with respect to those Shares. |
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8. |
Notice. Any notice or other communication required or permitted under these Terms and Conditions must be in writing and must be delivered personally, sent by certified, registered or express mail, or sent by overnight courier, at the sender’s expense. Notice will be deemed given when delivered personally or, if mailed, three (3) days after the date of deposit in the United States mail or, if sent by overnight courier, on the regular business day following the date sent. Notice to the Company should be sent to: |
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Coty Inc. |
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Two Park Avenue |
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17 th Floor |
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New York, New York 10016 |
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Attention: General Counsel |
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Notice to the Participant should be sent to the address on file with the Company. Either party may change the Person and/or address to which the other party must give notice under this Section 8 by giving such other party written notice of such change, in accordance with the procedures described above. |
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9. |
Successors. All obligations of the Company under these Terms and Conditions will be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the business of the Company, or a merger, consolidation, or otherwise. |
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10. |
Governing Law. To the extent not preempted by federal law, these Terms and Conditions will be construed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction. |
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11. |
Plan Document Controls. The rights granted under these Terms and Conditions are in all respects subject to the provisions set forth in the Plan to the same extent and with the same effect as if set forth fully in these Terms and Conditions. If the terms of these Terms and Conditions conflict with the terms of the Plan document, the Plan document will control. |
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12. |
Amendment of these Terms and Conditions. These Terms and Conditions may be amended unilaterally by the Committee to the extent provided under the Plan, or by a written instrument signed by both parties. |
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13. |
Entire Agreement. These Terms and Conditions, together with the Plan, constitutes the entire obligation of the parties with respect to the subject matter of these Terms and Conditions and supersedes any prior written or oral expressions of intent or understanding with respect to such subject matter. |
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14. |
Administration. The Committee administers the Plan and these Terms and Conditions. The Participant’s rights under these Terms and Conditions are expressly subject to the terms and conditions of the Plan, including any guidelines the Committee adopts from time to time. The Participant hereby acknowledges receipt of a copy of the Plan. |
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15. |
Section 409A. The Restricted Stock Units awarded pursuant to these Terms and Conditions are intended to comply with or, in the alternative, be exempt from Section 409A. Any reference to a termination of Service shall be construed as a “separation from service” for purposes of Section 409A. |
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COTY INC. |
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By: |
/s/ Jules Kaufman |
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Name: Jules Kaufman |
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Title: SVP, General Counsel and Secretary |
4
Exhibit 10.42
COTY INC.
STOCK PURCHASE PROGRAM FOR DIRECTORS
(amended and restated as of April 8, 2013)
SECTION 1
PURPOSE AND DURATION
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1.1 |
The purpose of this Coty Inc. Stock Purchase Program for Directors is to promote the interests of the Company and its shareholders by enabling Directors to acquire an increased stake in the Company through purchases of Shares. The original effective date of the Program was September 23, 2011, and the Program shall remain in effect until the date the Program is terminated by action of the Board. The effective date of this amended and restated program document is the Effective Date. |
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SECTION 2 |
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DEFINITIONS |
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Whenever used in the Program, the following terms have the meanings set forth below. Terms not otherwise defined herein have the meanings given those terms in the Coty Inc. Executive Ownership Plan, as amended from time to time. |
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2.1 |
“Company” means Coty Inc., a Delaware corporation, and any successor thereto as provided in Section 8.1. |
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2.2 |
“Director” means a member of the Board. |
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2.3 |
“Effective Date” means the means the day immediately prior to the date of the underwritten initial public offering of the Company’s common stock pursuant to a registration statement that is declared effective by the Securities and Exchange Commission. |
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2.4 |
“Participant” means a Director or a former Director holding Purchased Shares. |
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2.5 |
“Program” means this Coty Inc. Stock Purchase Program for Directors, as amended from time to time. |
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2.6 |
“ Purchased Shares ” means Shares purchased by a Participant under the Program. |
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2.7 |
“Share” means a share of Class A Common Stock, par value $0.01, of the Company. |
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SECTION 3 |
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Administration |
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3.1 |
The Program shall be administered by the Committee, which shall have full power and discretion to construe and interpret the Program. All determinations and decisions made by the Committee shall be final, conclusive and binding on all Persons. |
SECTION
4
Shares Subject to the Program
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4.1 |
An aggregate of 10,000,000 Shares shall be available for purchase under the Program, subject to the Company’s Articles of Incorporation and Bylaws, as in effect from time to time. Such Shares may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares. |
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4.2 |
As of the Effective Date, no new Shares may be purchased under the Program. |
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SECTION 5 |
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Share Purchase Opportunity |
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5.1 |
Any Participant who is a Director on an Exercise Date may elect on or before such Exercise Date to purchase on such Exercise Date such number of Shares as the Director may specify on such election form as the Committee shall provide, subject to the overall limitation set forth in Section 4.1. |
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5.2 |
The purchase price for such Shares shall be their Fair Market Value as of such Exercise Date. The Participant shall pay the full amount of such purchase price in cash or by check no later than the Exercise Date, whereupon certificates for Shares shall be issued in the Participant’s name. |
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5.3 |
By making a purchase of Shares under this Program, a Participant agrees to be bound by the terms of the Program. |
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SECTION 6 |
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Purchase and Sale Rights |
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6.1 |
Restrictions. The Committee may impose such restrictions on any Purchased Shares as it deems necessary or advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which the Shares are then listed and/or traded, and under any blue sky or state securities laws. |
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6.2 |
Additional Conditions of Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or transferred, or (ii) to treat as owner of such Shares, to accord the right to vote as such owner, or to pay dividends to any transferee to whom such Shares have been transferred in violation of the Program. |
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SECTION 7 |
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Amendment, Modification and Termination |
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7.1 |
Amendment, Modification and Termination . The Board may at any time and from time to time alter, amend, modify or terminate the Program in whole or in part, without the approval of the Company’s shareholders, except to the extent such approval is required by law. |
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SECTION 8 |
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Miscellaneous Provisions |
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8.1 |
Successors. All obligations of the Company under the Program shall be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the Company’s stock, or a merger or consolidation, or otherwise. |
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8.2 |
Requirements of Law. The issuance of Shares under the Program shall be subject to all applicable laws, rules and regulations, and to any approvals by governmental agencies or national securities exchanges as may be required. |
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8.3 |
Governing Law. To the extent not preempted by Federal law, the Program shall be construed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction. |
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Exhibit 10.43
COTY INC.
EQUITY AND LONG-TERM INCENTIVE PLAN
(as amended and restated on April 8, 2013)
SECTION 1
PURPOSE AND
DURATION
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1.1 |
Purpose . The purpose of this Coty Inc. Equity and Long-Term Incentive Plan is to promote the interests of Coty Inc. and its shareholders by (i) attracting and retaining exceptional executive personnel and other key employees of the Company and its Affiliates; (ii) motivating such employees by means of performance-related incentives to achieve long-range performance goals; and (iii) enabling such employees to participate in the long-term growth and financial success of the Company. |
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1.2 |
Effective Date and Term of the Plan . |
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(a) |
The original effective date of the Plan is November 8, 2012. The effective date of this amended and restated plan document is the Effective Date. |
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(b) |
The Plan will terminate upon the earlier of (i) the date on which all Shares available for issuance under the Plan have been issued pursuant to the exercise of Stock Options or the Award of Shares under the Plan, or (ii) the date specified by action of the Board. Upon such Plan termination, all Awards outstanding under the Plan will continue to have full force and effect in accordance with the terms of the Terms and Conditions evidencing each Award. |
SECTION
2
DEFINITIONS
Whenever used in the Plan, the following terms have the meanings set forth below:
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2.1 |
“Affiliate” means any entity (i) that, directly or indirectly, is controlled by the Company, or in which the Company has a significant equity interest, and (ii) as to which the Company is an “eligible issuer of service recipient stock” within the meaning of Treas. Reg. 1.409A-1(b)(5)(iii)(E), in any such case as determined by the Committee. |
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2.2 |
“Applicable Fraction” means a fraction, the numerator of which is the number of days elapsed from the Grant Date of an Award to the date of the Participant’s termination of Service and the denominator of which is the number of days between the Grant Date and the date the Award was scheduled to become exercisable or otherwise vest. |
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2.3 |
“Award” means a grant under the Plan to a Participant of a Stock Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit, Performance Award, or Other Stock-Based Award. |
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2.4 |
“Board” means the Board of Directors of the Company. |
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2.5 |
“Business Day” means any day other than a Saturday, Sunday, or legal holiday, or a day on which the national securities exchange that constitutes the principal market for the Shares is closed. |
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2.6 |
“Cause” has the meaning set forth in any employment, severance or other agreement between the Company or an Affiliate and the Participant. If there is no employment, severance or other agreement between the Company or an Affiliate and the Participant, or if such agreement does not define “Cause,” then “Cause” shall mean the occurrence of any of the following, as determined by the Committee in its sole discretion: |
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(a) |
a Participant’s willful and continued failure substantially to perform his or her duties (other than as a result of total or partial incapacity due to physical or mental illness or as a result of termination by such Participant for Good Reason), which failure continues for more than 30 days after receipt by the Participant of written notice setting forth the facts and circumstances identified by the Company as constituting adequate grounds for termination under this clause (a); |
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(b) |
any willful act or omission by a Participant constituting dishonesty, fraud or other malfeasance, and any act or omission by a Participant constituting immoral conduct, which in any such case is injurious to the financial condition or business reputation of the Company or any of its Affiliates; |
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(c) |
a Participant’s indictment for a felony under the laws of the United States or any state thereof or any other jurisdiction in which the Company conducts business; or |
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(d) |
a Participant’s breach of any nonsolicitation, noncompetition, confidentiality, or other restrictive covenant by which he or she is bound. |
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For purposes of this definition, no act or failure to act shall be deemed “willful” unless effected by a Participant not in good faith and without a reasonable belief that such action or failure to act was in or not opposed to the Company’s best interests. |
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2.7 |
“Change in Control” means the occurrence of any of the following: |
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(a) |
Any Person or “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) that is not the Majority Shareholder is or becomes the “beneficial owner” (as defined below), directly or indirectly, of securities representing either (i) more than 50% of the combined voting power of the Company’s then |
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outstanding securities, or (ii) 20% or more of the combined voting power of the Company’s then outstanding securities at a time when the Majority Shareholder hold less than 30% of such combined voting power. For purposes of this clause (a), “beneficial owner” has the meaning given that term in Rule 13d-3 under the Exchange Act, except that a Person shall be deemed to be the “beneficial owner” of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants, options or otherwise, without regard to the 60-day period referred to in such Rule; |
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(b) |
Individuals who constitute the Board on the Effective Date (the “ Incumbent Board ”) cease for any reason to constitute at least a majority thereof, provided, that any Person becoming a director subsequent to such date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least three-quarters of the directors then comprising the Incumbent Board shall be, for purposes of this clause (b), considered as though such Person were a member of the Incumbent Board; and provided , further , that this clause (b) shall not apply as long as the Majority Shareholder is the beneficial owner of a majority of voting power the Company’s outstanding securities; |
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(c) |
The Majority Shareholder enters into any joint venture, joint operating arrangement, partnership, standstill agreement or other arrangement similar to any of the foregoing with any other Person or group, pursuant to which such Person or group assumes significant operational or managerial control of the Company; or |
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(d) |
The shareholders of the Company approve a plan or agreement providing (i) for a merger or consolidation of the Company other than with a wholly owned subsidiary and other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 51% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (ii) for a sale, exchange or other disposition of all or substantially all of the business or assets of the Company. If any of the events enumerated in this clause (d) occurs, the Board shall determine the effective date of the Change in Control resulting therefrom for purposes of this Plan. |
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2.8 |
“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time. |
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2.9 |
“Committee” means the Remuneration and Nominating Committee of the Board or any successor committee with responsibility for compensation, or any subcommittee, as long as the number of Committee members and their qualifications shall at all times be sufficient to meet the independence requirements of the New York Stock Exchange, Inc. |
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or any other applicable exchange on which the Company’s common equity is at the time listed and, as applicable, the requirements for “outside directors” under Section 162(m) and the regulations thereunder, as in effect from time to time. |
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2.10 |
“Company” means Coty Inc., a Delaware corporation, and any successor thereto as provided in Section 16.1. |
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2.11 |
“Designated Beneficiary” means the Person or Persons the Participant designates from time to time on a signed form prescribed by the Committee, properly filed with the Committee during the Participant’s lifetime, as the beneficiary of any amounts or benefits the Participant owns or is to receive under the Plan, in accordance with Section 12.1. A properly filed beneficiary designation will revoke all prior designations by the same Participant. If no such form has been filed with the Committee, the Designated Beneficiary shall be the beneficiary named by the Participant in the Company’s qualified 401(k) savings plan or, if none, the Beneficiary’s estate. |
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2.12 |
“Director” means a member of the board of directors of the Company or an Affiliate. |
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2.13 |
“Disability” means either (i) disability as defined for purposes of the Company’s disability benefit plan, or (ii) a Participant’s inability, as a result of physical or mental incapacity, to perform the duties of his or her position(s) for a period of six consecutive months or for an aggregate of six months in any consecutive 12-month period. Any question as to the existence of the Disability of a Participant as to which the Participant and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to the Participant and the Company. If the Participant and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and the Participant shall be final and conclusive for all purposes of the Plan. Following a Change in Control, the Company shall pay all expenses incurred in the determination of whether a Participant is disabled. |
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2.14 |
“Effective Date” means the date on which the Amended and Restated Certificate of Incorporation of the Company that is contemplated to be adopted by the Company in connection with the first underwritten public offering of the Company’s common stock is filed with the Secretary of State of the State of Delaware. |
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2.15 |
“Employee” means an employee of the Company or an Affiliate (that is not a Joint Venture). |
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2.16 |
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto. |
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2.17 |
“Executive Officer” means any Company employee who is an “executive officer” as defined in Rule 3b-7 promulgated under the Exchange Act. |
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2.18 |
“ Exercise Date ” shall mean any Business Day. |
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2.19 |
“Exercise Price” means the price at which a Participant may purchase a Share pursuant to a Stock Option or Stock Appreciation Right. |
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2.20 |
“Fair Market Value” as it relates to a Share means, unless otherwise determined by the Committee, the most recent closing price of a Share on the principal national securities exchange on which the Shares are then listed, or if there were no sales on such date, on the next preceding day on which there were sales, or if such Shares are not listed on a national securities exchange, the last reported bid price in the over-the-counter market. |
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2.21 |
“Good Reason” shall have the meaning set forth in any employment, severance or other agreement between the Company or an Affiliate and the Participant. If there is no employment, severance or other agreement between the Company or an Affiliate and the Participant, or if such agreement does not define “Good Reason,” then “Good Reason” shall mean the occurrence of any of the following: |
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(a) |
Before a Change in Control: |
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(i) |
A Participant’s removal from, or the Company’s failure to reelect or reappoint the Participant to, his or her positions at the Company (other than as a result of a promotion). For purposes of this clause (i), a mere change of title shall not constitute removal from, or non-reelection to, such position, provided that a Participant’s new title is substantially equivalent to the Participant’s title as of the Grant Date and his or her position is otherwise not adversely affected; or |
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(ii) |
The relocation of a Participant’s principal workplace without his or her consent to a location more than 25 miles distant from its current location. |
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(b) |
Following a Change in Control: |
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(i) |
Any of the events described in clause (a) above; |
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(ii) |
A material diminution in a Participant’s title, position, duties or responsibilities, or the assignment to a Participant of duties that are inconsistent, in a material respect, with the scope of duties and responsibilities associated with his or her position as of the Grant Date; or |
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(iii) |
The failure of the Company to continue a Participant’s participation in the Company’s Annual Performance Plan and in this Plan on a basis that is commensurate with his or her position. |
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2.22 |
“Grant Date” means the date on which an Award is granted. |
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2.23 |
“Joint Venture” has the meaning given that term in Section 6.9. |
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2.24 |
“Majority Shareholder” means (i) the Company’s majority shareholder as of the Effective Date or (ii) a Benckiser Permitted Holder as defined in the Company’s Certificate of Incorporation effective on the Effective Date or any other similarly situated Person as determined by the Committee. |
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2.25 |
“Original Effective Date” means November 8, 2012. |
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2.26 |
“Other Stock-Based Awards” has the meaning given that term in Section 10. |
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2.27 |
“Owned Shares” means Shares that a Participant has acquired through the exercise of a Stock Option or a Stock Appreciation Right, the vesting of Restricted Stock, the settlement of a Restricted Stock Unit or a distribution of Shares in connection with an Other Stock-Based Award. |
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2.28 |
“Participant” means an Employee selected by the Committee to receive an Award under the Plan pursuant to Section 5.2, or who has an outstanding Award granted under the Plan. |
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2.29 |
“Performance Award” means a right to receive cash or Shares (as determined by the Committee) upon the achievement, in whole or in part, of the applicable Performance Criteria pursuant to Section 9. A grant of Restricted Stock, Restricted Stock Units, or Other Stock Awards may be designed to qualify as Performance Awards. |
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2.30 |
“Performance-Based Exception” means the performance-based exception from the tax deductibility limitations of Code Section 162(m) and any regulations promulgated thereunder. |
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2.31 |
“Performance Criteria” means the objectives established by the Committee for a Performance Period for the purpose of determining the extent to which an Award of Performance Awards has been earned. “Performance Criteria” may be based on the relative or comparative attainment of one or more of the following criteria during a Performance Period, whether in absolute terms or relative to the performance of one or more similarly situated companies or a published index covering the performance of a number of companies: total stockholder return (inclusive or exclusive of dividends paid); stock price; gross, operating or net earnings or margins; approved rate increases; earnings |
-6-
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before interest and taxes; earnings before interest, taxes, depreciation and amortization (“EBITDA”); EBITDA excluding traditional working media; earnings per share; economic value added; ratio of operating earnings to capital spending; net sales; sales growth; return on assets, capital or equity; income; market share; level of expenses; revenue; revenue growth; cash flow; increases in customer base; capital expenditures; cost reductions and expense control objectives; compliance with environmental or regulatory goals or requirements; conservation; budget objectives; working capital; mergers, acquisitions and divestitures; attainment of objectives measured in terms of quality or safety; customer complaints or customer satisfaction; and improvements in financial controls; and, in the case of persons who are not Executive Officers, such other criteria as may be determined by the Committee. Performance Criteria may be established on a Company-wide basis or with respect to one or more business units, divisions, subsidiaries, or geographic locations, or on an individual basis. |
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At the time the Committee establishes Performance Criteria for a Performance Period, the Committee may exclude any or all “extraordinary items” as determined under U.S. generally accepted accounting principles including, without limitation, the charges or costs associated with restructurings of the Company or any subsidiary, discontinued operations, other unusual or non-recurring items, the cumulative effects of accounting changes or such other objective factors as the Committee deems appropriate. Unless otherwise explicitly stated by the Committee at the time Performance Criteria are established, each applicable performance goal shall be appropriately adjusted for one or more of the following items: (i) asset impairments or write downs; (ii) litigation judgments or claim settlements; (iii) the effect of changes in tax law, accounting principles or such laws or provisions affecting reported results; (iv) accruals for reorganization and restructuring programs; (v) any extraordinary nonrecurring items as described in Accounting Standards Codification (ASC) 225-20 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable year; (vi) the operations of any business acquired by the Company or any affiliate or of any joint venture in which the Company or affiliate participates; (vii) the divestiture of one or more business operations or the assets thereof; or (viii) the costs incurred in connection with such acquisitions or divestitures; and (ix) charges for stock based compensation. |
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Except in the case of Awards to Executive Officers intended to qualify for the Performance-Based Exception, the Committee may at any time adjust the Performance Criteria for any Performance Period as it deems equitable. The Committee shall have no obligation to treat Participants uniformly. |
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2.32 |
“Performance Period” means the 12-month time period during which Performance Criteria must be met in order for a Participant to earn Performance Awards granted under Section 9. |
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2.33 |
“Person” means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization and any other entity, whether foreign or domestic, including any governmental entity or any department, agency or political subdivision thereof. |
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2.34 |
“Plan” means this Coty Inc. Equity and Long-Term Incentive Plan, as amended from time to time. |
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2.35 |
“Prior Plans” means the Coty Inc. Long-Term Incentive Plan and the Coty Inc. Executive Ownership Plan, each as in effect immediately prior to the Original Effective Date and as may be amended from time to time. |
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2.36 |
“Restricted Stock” means a contingent grant of Shares awarded to a Participant pursuant to Section 8. |
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2.37 |
“Restricted Stock Unit” means a Restricted Stock Unit granted to a Participant, as described in Section 8. |
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2.38 |
“Restriction Period” means the period during which the transfer of Restricted Stock is limited in some way (based on the passage of time, the achievement of performance objectives, or the occurrence of other events as the Committee determines, in its sole discretion) and, except as provided in the Terms and Conditions, during which the Restricted Stock and any Restricted Stock Unit is not vested. |
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2.39 |
“Retirement” means a termination of Service (other than a termination of Service for Cause): |
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(a) |
after attaining age 60, but only if the Company or the employing Affiliate consents to the treatment of such termination as a “Retirement” for purposes of this Plan; or |
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(b) |
qualifying as a retirement at normal retirement age under the laws and/or arrangements applicable to the Participant, as reasonably determined by the Committee. |
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2.40 |
“Section 162(m)” means Section 162(m) of the Code and the applicable regulations and other legal authority promulgated thereunder. |
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2.41 |
“Section 409A” means Section 409A of the Code and the applicable regulations and other legal authority promulgated thereunder. |
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2.42 |
“Service” means the provision of services in the capacity of an Employee or Continuing Director of the Company or an Affiliate. A transfer of Service from the Company to an |
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Affiliate or from an Affiliate to the Company or another Affiliate shall not constitute a termination of Service under the Plan or any Terms and Conditions. All determinations regarding Service, including whether any leave of absence is a termination of Service, shall be made by the Committee in its sole discretion. For purposes of this paragraph, a “Continuing Director” shall mean any individual who, upon his or her termination of employment with the Company or an Affiliate, continues to serve as a member of the Board or the board of directors of an Affiliate. The Service of a Continuing Director shall terminate when he or she ceases to serve as a member of the Board or on the board of directors of an Affiliate. |
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2.43 |
“Share” means a share of the Class A Common Stock, par value $.01 per share, of the Company, or such other securities of the Company as may be designated by the Committee from time to time. |
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2.44 |
“Stock Appreciation Right” or “SAR” means an Award consisting of a right to receive any excess in value of shares of common stock over the exercise price and designated as an SAR pursuant to the terms of Section 7. |
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2.45 |
“Stock Appreciation Right Spread” means the amount by which the Fair Market Value, as of the Exercise Date, of the Shares as to which a Stock Appreciation Right is exercised exceeds the aggregate Exercise Price with respect to such Stock Appreciation Right. |
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2.46 |
“Stock Option” means a nonqualified stock option, as described in Section 6, that is not intended to meet the requirements of Code Section 422. |
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2.47 |
“Stock Option Spread” means the amount by which the Fair Market Value, as of the Exercise Date, of the Shares as to which a Stock Option is exercised exceeds the aggregate Exercise Price with respect to such Shares. |
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2.48 |
“Successor” means the Participant’s spouse, the Participant’s lineal descendants, any trust the beneficiaries of which consist only of the Participant, the Participant’s spouse and/or the Participant’s lineal descendants, or to a corporation in which the Participant, the Participant’s spouse and/or the Participant’s lineal descendants own 100% of the economic interest and has the unfettered right to prevent further transfer or disposition of the Restricted Stock, Stock Option, Stock Appreciation Right, Restricted Stock Unit or Owned Shares, applicable. The Committee may, in its discretion, deem other parties to qualify as a Successor for purposes of this Plan. |
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2.49 |
“Terms and Conditions” means any electronic or written agreement or other instrument or document evidencing an Award. |
-9-
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2.50 |
“Valuation Date” means any Business Day. A Valuation Date shall also occur upon the consummation of a transaction constituting a Change in Control. |
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2.51 |
“Withholding Tax” means the aggregate federal, state and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising under the Plan. |
SECTION
3
Administration
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3.1 |
Plan Administration . The Plan shall be administered by the Committee. |
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3.2 |
Authority of the Committee . Except as limited by law or the by-laws of the Company, and subject to the provisions of the Plan, the Committee shall have full power and discretion to: (a) select eligible Employees to participate in the Plan; (b) determine the size and type of Awards; (c) determine the terms and conditions of Awards in a manner consistent with the Plan; (d) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in Shares, and the method or methods by which Awards may be settled or exercised; (e) determine the Fair Market Value of a Share; (f) construe and interpret the Plan and any agreement or instrument entered into under the Plan; (g) establish, amend or waive rules and regulations for the Plan’s administration; (h) specify the Exercise Price; and (i) subject to the provisions of Section 15.1, amend the terms and conditions of any outstanding Award to the extent the amended terms are within the Committee’s authority under the Plan. Further, the Committee shall make all other determinations that may be necessary or advisable to administer the Plan. The Committee may delegate some or all of its authority under the Plan to officers or employees of the Company or other Persons, except with respect to Awards to Executive Officers. |
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3.3 |
Decisions Binding . All determinations and decisions made by the Committee or by a Person or Persons delegated authority by the Committee pursuant to the provisions of the Plan shall be final, conclusive and binding on all Persons, including, without limitation, the Company, its shareholders, all Affiliates, Employees, Participants and their estates and beneficiaries. |
SECTION
4
Shares
Subject to the Plan
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4.1 |
Number of Shares Available for Grants . Subject to adjustment as provided in Sections 4.2 and 4.3, the number of Shares that may be issued or transferred to Participants under the Plan is 18,000,000. No additional awards shall be made under the Prior Plans on or |
-10-
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after the Original Effective Date. Subject to adjustment as provided in Section 4.3, to the extent necessary to comply with Section 162(m), the maximum number of Shares or Share equivalent units that may be granted during any fiscal year to any one Participant under Options, SARs, Restricted Stock, Restricted Stock Units, Performance Awards or other Stock-Based Awards is $25,000,000, which limit will apply regardless of whether the compensation is paid in Shares or in cash. To the extent necessary to comply with Code Section 162(m) the maximum aggregate dollar amount that may be paid to any one Participant during any fiscal year under Performance Awards or any cash-based Award under Section 9 is $25,000,000. |
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4.2 |
Lapsed Awards . If any Award granted under this Plan or a Prior Plan is canceled, terminates, expires or lapses for any reason, any Shares subject to such award will again be available for the grant of an Award under the Plan. Common Stock issued through the assumption or substitution of outstanding grants from an acquired company shall not reduce the shares available for Awards under the Plan. In addition, if a Share subject to an Award is not delivered because the award is settled in cash, then that Share will thereafter be deemed to be available for grant. If a Share subject to an Award is not delivered because it is used to satisfy a tax withholding obligation or used to pay the Exercise Price of an Option, then that share will not thereafter be deemed to be available for grant. |
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4.3 |
Adjustments in Authorized Shares . If the Shares, as currently constituted, are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether because of a merger, consolidation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise, but not including a capital infusion from any source) or if the number of Shares is increased through the payment of a stock dividend, then the Committee shall substitute for or add to each Share that may become subject to an Award the number and kind of shares of stock or other securities into which each outstanding Share was changed, for which each such Share was exchanged, or to which each such Share is entitled, as the case may be. |
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4.4 |
Sources of Shares Deliverable under Awards . Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares. |
SECTION 5
Eligibility and
Participation
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5.1 |
Eligibility . Any Employee, including any officer or employee-director of the Company or an Affiliate, shall be eligible to be designated a Participant. To be eligible, a |
-11-
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Participant shall have signed and delivered to the Company the Confidentiality and Non-Competition Agreement delivered by the Company to the Participant. |
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5.2 |
Actual Participation . The Committee shall determine the eligible Employees to whom it will grant Awards. |
SECTION
6
Stock Options
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6.1 |
Grant of Stock Options . |
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(a) |
Subject to the terms and provisions of the Plan, the Committee may grant Stock Options to any Participant in the number, and upon the terms, and at such time or times, as the Committee determines and sets forth in the Terms and Conditions. |
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(b) |
Each Stock Option grant shall be evidenced by the Terms and Conditions that specifies the duration of the Stock Option, the number of Shares to which the Stock Option pertains, the manner, time, and rate of exercise and vesting of the Stock Option, and such other provisions as the Committee determines. Vesting conditions may include, but not be limited to, the achievement of specific performance objectives (Company-wide, business unit, and/or individual) or continued Service. |
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6.2 |
Exercise Price . The Terms and Conditions shall specify the Stock Option’s Exercise Price, which shall be not less than the Fair Market Value of a Share on the Grant Date. |
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6.3 |
Duration of Stock Options . Each Stock Option will expire at the time determined by the Committee at the time of grant and set forth in the Terms and Conditions. |
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6.4 |
Exercise of Stock Options . |
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(a) |
Stock Options shall become exercisable at such times and be subject to such vesting and other restrictions and conditions as the Committee in each instance approves and sets forth in each Terms and Conditions. Restrictions and conditions on the exercise of a Stock Option need not be the same for each Award or for each Participant. |
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(b) |
The holder of a Stock Option may exercise the Stock Option only by delivering a written notice of exercise to the Company setting forth the number of Shares as to which the Stock Option is to be exercised. Upon the Exercise Date, the holder shall pay or provide for the Exercise Price and applicable Withholding Tax in full, |
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pursuant to such procedures established by the Committee from time to time after giving consideration to applicable tax, securities and accounting rules |
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(c) |
Any exercisable Stock Option that has not been exercised by its holder shall be automatically exercised in accordance with subsection (b) hereof on the Exercise Date immediately prior to its expiration if, on such Exercise Date, there is a Stock Option Spread with respect to such Stock Option. |
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6.5 |
Termination of Service . Except as otherwise provided in the Terms and Conditions: |
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(a) |
In the event a Participant’s Service terminates by reason of death, Disability, or Retirement: |
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(i) |
The Applicable Fraction of the portion of any Stock Option held by such Participant which has not theretofore become exercisable shall immediately become vested and exercisable. |
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(ii) |
All Stock Options held by the Participant, to the extent exercisable (including by application of clause (i) above) as of the Participant’s termination of Service shall remain exercisable through the second anniversary of the date of termination of Service and shall thereafter expire. |
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(iii) |
Any unvested portion of the Participant’s Stock Options as of the date of termination (other than any portion thereof that becomes vested pursuant to clause (i) above) shall be forfeited and canceled, without consideration, on the date of termination. |
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(b) |
Except as provided in Section 6.8, in the event a Participant’s Service terminates other than by reason of death, Disability, or Retirement: |
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(i) |
Any unvested portion of the Participant’s Stock Options as of the date of termination shall be forfeited and canceled on the date of termination, and |
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(ii) |
The vested portion, if any, of the Participant’s Stock Options shall remain exercisable through the ninetieth (90th) day after the Participant’s termination of Service. Any vested Stock Option remaining outstanding after such date shall thereafter expire. |
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(c) |
Notwithstanding the foregoing, the Committee may, in its sole discretion, accelerate the vesting and exercisability, and/or extend the period of exercisability, of all or a portion of a Stock Option at any time as permitted by Section 409A. |
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(d) |
In no event shall a Stock Option be exercisable following its expiration date. |
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6.6 |
Nontransferability of Stock Options . |
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(a) |
Except as otherwise provided in Section 6.6(b), a Participant’s Terms and Conditions, or the Plan, during the Restriction Period, (i) no Stock Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and (ii) all Stock Options shall be exercisable during the Participant’s lifetime only by the Participant or his or her guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with the evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant. |
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(b) |
Subject to applicable law, vested Stock Options may be transferred to a Successor. Such transferred Stock Options may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 6.6, and shall be subject in all respects to the terms of the Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan. |
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6.7 |
Dividend Equivalents and Other Distributions . The Committee may, in its sole discretion, provide under an agreement for payments in connection with Stock Options that are equivalent to dividends or other distributions declared and paid on the Shares underlying the Stock Options prior to the date of exercise. Such dividend equivalent agreement, if any, shall be separate and apart from the Terms and Conditions and shall be designed to comply separately with Section 409A. |
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6.8 |
Change in Control . If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, the unvested portion of any then outstanding Stock Option shall vest and become exercisable. |
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6.9 |
Employment in a Joint Venture . If a Participant becomes an employee of certain joint ventures of the Company, as determined by the Board from time to time (a “ Joint Venture ”), during the Restriction Period, vesting of the Participant’s Stock Options shall be tolled beginning on the date such Participant becomes an employee of the Joint Venture until the date such Participant again becomes an Employee. Accordingly, the |
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Restriction Period for such Participant’s Stock Options shall be extended by the number of days the Participant was an employee of the Joint Venture. |
SECTION 7
Stock Appreciation Rights
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7.1 |
Grant of Stock Appreciation Rights . |
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(a) |
Subject to the terms and provisions of the Plan, the Committee may grant Stock Appreciation Rights to any Participant in the number, and upon the terms, and at such time or times, as the Committee determines and sets forth in the Terms and Conditions. |
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(b) |
Each Stock Appreciation Right grant shall be evidenced by the Terms and Conditions that specifies the duration of the Stock Appreciation Right, the number of Shares to which the Stock Appreciation Right pertains, the manner, time, and rate of exercise and vesting of the Stock Appreciation Right, and such other provisions as the Committee determines. Vesting conditions may include, but not be limited to, the achievement of specific performance objectives (Company-wide, business unit, and/or individual) or continued Service. |
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7.2 |
Exercise Price . The Terms and Conditions shall specify the Stock Appreciation Right’s Exercise Price, which shall be not less than the Fair Market Value of a Share on the Grant Date. |
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7.3 |
Duration of Stock Appreciation Rights . Each Stock Appreciation Right will expire at the time determined by the Committee at the time of grant and set forth in the Terms and Conditions. |
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7.4 |
Exercise of Stock Appreciation Rights . |
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(a) |
Stock Appreciation Rights shall become exercisable at such times and be subject to such vesting and other restrictions and conditions as the Committee in each instance approves and sets forth in each Terms and Conditions. Restrictions and conditions on the exercise of a Stock Appreciation Right need not be the same for each Award or for each Participant. |
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(b) |
The holder of a Stock Appreciation Right may exercise the Stock Appreciation Right only by delivering a written notice of exercise to the Company setting forth the number of Stock Appreciation Rights to be exercised. The Stock Appreciation Right Spread may be settled, as set forth in the Terms and Conditions, by delivery by the Company of the number of Shares equal to the |
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Stock Appreciation Right Spread, in which case the Participant shall on or before the Exercise Date pay or provide for the applicable Withholding Tax in full, pursuant to such exercise procedures established by the Committee from time to time after giving consideration to applicable tax, securities and accounting rules. Any exercisable Stock Appreciation Right that has not been exercised by its holder shall be automatically exercised in accordance with subsection (b) hereof on the Exercise Date immediately prior to its expiration if, on such Exercise Date, there is a Stock Appreciation Right Spread with respect to such Stock Appreciation Right. |
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7.5 |
Termination of Service . Except as otherwise provided in the Terms and Conditions: |
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(a) |
In the event a Participant’s Service terminates by reason of death, Disability, or Retirement: |
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(i) |
The Applicable Fraction of the portion of any Stock Appreciation Right held by such Participant which has not theretofore become exercisable shall immediately become vested and exercisable. |
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(ii) |
All Stock Appreciation Rights held by the Participant, to the extent exercisable (including by application of clause (i) above) as of the Participant’s termination of Service shall remain exercisable through the second anniversary of the date of termination of Service and shall thereafter expire. |
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(iii) |
Any unvested portion of the Participant’s Stock Appreciation Rights as of the date of termination (other than any portion thereof that becomes vested pursuant to clause (i) above) shall be forfeited and canceled, without consideration, on the date of termination. |
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(b) |
Except as provided in Section 7.8, in the event a Participant’s Service terminates other than by reason of death, Disability, or Retirement: |
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(i) |
Any unvested portion of the Participant’s Stock Appreciation Rights as of the date of termination shall be forfeited and canceled on the date of termination, and |
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(ii) |
The vested portion, if any, of the Participant’s Stock Appreciation Rights shall remain exercisable through the ninetieth (90th) day after the Participant’s termination of Service. Any vested Stock Appreciation Right remaining outstanding after such date shall thereafter expire. |
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(c) |
Notwithstanding the foregoing, the Committee may, in its sole discretion, accelerate the vesting and exercisability, and/or extend the period of exercisability, of all or a portion of a Stock Appreciation Right at any time as permitted by Section 409A. |
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(d) |
In no event shall a Stock Appreciation Right be exercisable following its expiration date. |
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7.6 |
Nontransferability of Stock Appreciation Rights . |
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(a) |
Except as otherwise provided in Section 7.6(b), a Participant’s Terms and Conditions, or the Plan, during the Restriction Period, (i) no Stock Appreciation Right granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and (ii) all Stock Appreciation Rights shall be exercisable during the Participant’s lifetime only by the Participant or his or her guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with the evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant. |
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(b) |
Subject to applicable law, vested Stock Appreciation Rights may be transferred to a Successor. Such transferred Stock Appreciation Rights may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 7.6, and shall be subject in all respects to the terms of the Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan. |
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7.7 |
Dividend Equivalents and Other Distributions . The Committee may, in its sole discretion, provide under an agreement for payments in connection with Stock Appreciation Rights that are equivalent to dividends and other distributions declared and paid on the Shares underlying the Stock Appreciation Rights prior to the date of exercise. Such dividend equivalent agreement, if any, shall be separate and apart from the Terms and Conditions and shall be designed to comply separately with Section 409A. |
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7.8 |
Change in Control . If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, the unvested portion of any then outstanding Stock Appreciation Right shall vest and become exercisable. |
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7.9 |
Employment in a Joint Venture . If a Participant becomes an employee of certain joint ventures of the Company, as determined by the Board from time to time (a “ Joint Venture ”), during the Restriction Period, vesting of the Participant’s Stock Appreciation Rights shall be tolled beginning on the date such Participant becomes an employee of the Joint Venture until the date such Participant again becomes an Employee. Accordingly, the Restriction Period for such Participant’s Stock Appreciation Rights shall be extended by the number of days the Participant was an employee of the Joint Venture. |
SECTION 8
Restricted Stock and
Restricted Stock Units
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8.1 |
Grant of Restricted Stock and Restricted Stock Units . Subject to the terms and provisions of the Plan, the Committee may, at any time and from time to time, grant Restricted Stock or Restricted Stock Units to any Participant in such amounts as it determines and sets forth in the Terms and Conditions. |
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8.2 |
Terms and Conditions . Each grant of Restricted Stock or Restricted Stock Units shall be evidenced by the Terms and Conditions that specifies the Restriction Period, the number of Shares or Restricted Stock Units granted, the purchase price, if any, and such other provisions as the Committee determines. |
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8.3 |
Nontransferability . |
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(a) |
Except as provided in Section 8.3(b), during the Restricted Period, (i) no Restricted Stock or Restricted Stock Unit granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution and (ii) all rights with respect to Restricted Stock or Restricted Stock Units shall be available during the Participant’s lifetime only to the Participant or the Participant’s guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant. |
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(b) |
Subject to applicable law, Restricted Stock may be transferred to a Successor. Such transferred Restricted Stock may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 8.3, and shall be subject in all respects to the terms of the Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the |
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Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan. |
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8.4 |
Termination of Service . Except as provided in Section 8.5, if a Participant’s Service terminates, then except as otherwise provided in the Terms and Conditions all unvested Restricted Stock and Restricted Stock Units held by such Participant will be forfeited and any vested Restricted Stock and Restricted Stock Units shall continue to be subject to the terms of the Plan and any applicable Award. |
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8.5 |
Change in Control . If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, all then outstanding Restricted Stock and Restricted Stock Units shall vest and become nonforfeitable. |
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8.6 |
Other Conditions . The Committee may impose such other conditions and restrictions on any Restricted Stock and Restricted Stock Units as it deems advisable and sets forth in the Terms and Conditions, including, without limitation, vesting restrictions based upon the achievement of specific performance objectives (Company-wide, business unit, and/or individual) or continued Service, and/or restrictions under applicable federal or state securities laws. The Committee may provide that restrictions established under this Section 8.6 as to any given Award will lapse all at once or in installments. |
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8.7 |
Voting Rights . Except as otherwise provided in the Terms and Conditions, and subject to Section 13.1(c), a Participant holding Shares of Restricted Stock may exercise any voting rights that apply to those Shares during the Restriction Period. |
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8.8 |
Dividends and Other Distributions . During the Restriction Period, a Participant holding Shares of Restricted Stock or Restricted Stock Units shall be credited with regular dividends or dividend equivalents and other distributions paid on those Shares. Such dividends or dividend equivalents and other distributions shall be subject to the same vesting conditions as the underlying Shares or Restricted Stock Units, and shall be paid within 30 days following the end of the Restriction Period. |
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8.9 |
Section 83(b) Elections on Restricted Stock . The Participant, if subject to taxation in the United States with respect to any compensation derived under the Plan, shall indicate to the Company whether the Participant intends to make an election under Code Section 83(b) with respect to the Restricted Stock. |
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8.10 |
Employment in a Joint Venture . If a Participant becomes an employee of a Joint Venture during the Restriction Period, vesting of the Participant’s Restricted Stock and Restricted Stock Units shall be tolled beginning on the date such Participant becomes an employee of the Joint Venture and shall recommence on the date such Participant again becomes an Employee. Accordingly, the Restriction Period for such Participant’s |
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Restricted Stock and Restricted Stock Units shall be extended by the number of days the Participant was an employee of the Joint Venture. |
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8.11 |
Payment of Restricted Stock Units . Each Restricted Stock Unit shall be payable to the Participant in such form provided in the Terms and Conditions following the last day of the Restriction Period, or on such later date provided in the Terms and Conditions or pursuant to a deferral agreement between the Participant and the Company. |
SECTION
9
Performance
Awards
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9.1 |
Grant of Performance Awards. The Committee shall have the authority to determine (i) the Participants who shall receive Performance Awards, (ii) the size, number, amount or value, as applicable, of Performance Awards, and (iii) the Performance Criteria applicable in respect of such Performance Awards for each Performance Period. The Committee shall determine the duration of each Performance Period (which may differ from each other), and there may be more than one Performance Period in existence at any one time as to any Participant or all or any class of Participants. Each grant of Performance Awards shall be evidenced by the Terms and Conditions that shall specify the Performance Criteria applicable thereto and such other terms and conditions not inconsistent with the Plan as the Committee shall determine. |
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9.2 |
Earning of Performance Awards. The grant and/or vesting of Performance Awards shall be contingent, in whole or in part, upon the attainment of specified Performance Criteria or the occurrence of any event or events involving a Change in Control, death or Disability, as the Committee shall determine. In addition to the achievement of the specified Performance Criteria, the Committee may, at the grant date, condition earning of Performance Awards on the Participant completing a minimum period of service following the Grant Date or on such other conditions as the Committee shall specify. |
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9.3 |
Performance Awards and Code Section 162(m) . The provisions of this Section 9.3 shall apply with respect to any Performance Award that is intended to meet the Performance-Based Exception. |
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(a) |
Establishment of Performance Criteria . The Committee shall establish the Performance Criteria for the applicable Performance Period no later than the 90 th day after the Performance Period begins (or by such other date as may be required under Section 162(m)) but in any event at a time when achievement of the Performance Criteria is substantially uncertain. The Committee may not in any event increase the amount of compensation payable to an Executive Officer upon attainment of the Performance Criteria above the maximum amount approved by the Committee at the time the Performance Criteria is established. |
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(b) |
Certification of Attainment of Performance Criteria . As soon as practicable after the end of a Performance Period and prior to any payment in respect of such Performance Period, the Committee shall certify in writing the amount, number or value, as applicable, of the Performance Awards that have been earned on the basis of performance in relation to the established Performance Criteria. |
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(c) |
Payment of Awards . Earned Performance Awards shall be distributed to the Participant or, if the Participant has died, to the Participant’s Designated Beneficiary as soon as practicable after the expiration of the Performance Period and the Committee’s certification under Section 9.3(b) above, provided that , unless the payment of a Performance Award has been deferred in accordance with Section 409A of the Code, distributions of a Performance Award shall be made no later than March 15 of the year following the year in which the amount is earned. |
SECTION
10
Other Stock-Based Awards
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10.1 |
The Committee shall have authority to grant to eligible Participants an “ Other Stock-Based Award ,” which shall consist of any right which (i) is not a Stock Option, Stock Appreciation Right, Restricted Stock Unit or Restricted Stock and (ii) is an Award of Shares or an Award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as deemed by the Committee to be consistent with the purposes of the Plan. Subject to the terms of the Plan and any applicable Terms and Conditions, the Committee shall determine the terms and conditions of any such Other Stock-Based Award. |
SECTION
11
Share Restrictions and Purchase and Sale Rights
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11.1 |
Restrictions. The Committee may impose such restrictions on any Shares as it deems necessary or advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which the Shares are then listed and/or traded, and under any blue sky or state securities laws. |
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11.2 |
Additional Conditions of Transfer . The Company shall not be required (i) to transfer on its books any Shares that have been sold or transferred, or (ii) to treat as owner of such Shares, to accord the right to vote as such owner, or to pay dividends to any transferee to whom such Shares have been transferred in violation of the Plan or any Terms and Conditions. |
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SECTION
12
Beneficiary Designation
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12.1 |
Each Participant may, from time to time, name any Designated Beneficiary (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case the Participant should die before receiving any or all of his or her benefits under the Plan. Each beneficiary designation shall revoke all prior designations by the same Participant, must be in a form prescribed by the Committee and must be made during the Participant’s lifetime. |
SECTION
13
Breach of Restrictive Covenants
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13.1 |
The Terms and Conditions may provide that if the Participant breaches, whether during or after termination of Service, a nonsolicitation, noncompetition, confidentiality, or other restrictive covenant by which he or she is bound, then in addition to any other penalties or restrictions that may apply under any such agreement, state law, or otherwise, the Participant shall forfeit: |
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(a) |
Any Awards granted to him or her under the Plan, including Awards that have become exercisable; |
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(b) |
The profit the Participant realized from the exercise of any Stock Options or Stock Appreciation Rights that the Participant exercised after terminating Service and within the six-month period immediately preceding the Participant’s termination of Service, which is the Stock Option Spread or Stock Appreciation Right Spread associated with any Shares acquired by the Participant upon his or her exercise of such Stock Options or such Stock Appreciation Rights; and |
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(c) |
The Fair Market Value, as determined on the vesting date, of any Restricted Stock that vested or Restricted Stock Unit that was settled within the six-month period immediately preceding the Participant’s termination of Service. |
SECTION
14
Rights of Participants
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14.1 |
Service . Nothing in the Plan shall interfere with or limit in any way the right of the Company or any Affiliate to terminate any Participant’s Service at any time, or confer |
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upon any Participant any right to continue in the Service of the Company or any Affiliate. The grant of any Award under the Plan shall not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets. |
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14.2 |
Participation . No Employee shall have the right to receive an Award under the Plan, or, having received any Award, to receive a future Award. |
SECTION
15
Amendment, Modification, Termination and Change in Control
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15.1 |
Amendment, Modification and Termination . The Board may at any time and from time to time alter, amend, modify or terminate the Plan in whole or in part, without the approval of the Company’s shareholders, except to the extent such approval is required by law. Subject to the terms and conditions of the Plan, the Committee may modify, extend or renew outstanding Awards under the Plan, or accept the surrender of outstanding Awards (to the extent not already exercised) and grant new Awards in substitution of them (to the extent not already exercised), in order to comply with the requirements of applicable law or otherwise. Notwithstanding the foregoing, no modification of an Award shall, without the prior written consent of the Participant, materially alter or impair any rights or obligations under any Award already granted under the Plan, except such an amendment made to comply with the requirements of applicable law. |
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15.2 |
Adjustment of Awards upon the Occurrence of Certain Events . |
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(a) |
In General . If the Shares, as currently constituted, are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether because of a merger, consolidation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise, but not including a capital infusion from any source) or if the number of Shares is increased through the payment of a stock dividend, then the Committee shall substitute for or add to each Share underlying an Award the number and kind of shares of stock or other securities into which each outstanding Share was changed, for which each such Share was exchanged, or to which each such Share is entitled, as the case may be, which shares or other securities shall be subject to the same terms and conditions as the underlying Award. Any such adjustment in an outstanding Stock Option or Stock Appreciation Right shall be |
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made with a corresponding adjustment in the Exercise Price for each Share or other unit of any security covered by such Stock Option or Stock Appreciation Right but without change in the aggregate purchase price applicable to the unexercised portion of such Stock Option. |
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(b) |
Reciprocal Transactions . The Committee may, but shall not be obligated to, make an appropriate and proportionate adjustment to an Award or to the Exercise Price of any outstanding Award, and/or grant an additional Award to the holder of any outstanding Award, to compensate for the diminution in the intrinsic value of the Shares resulting from any reciprocal transaction. |
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(c) |
Certain Unusual or Nonrecurring Events . In recognition of unusual or nonrecurring events affecting the Company or its financial statements, or in recognition of changes in applicable laws, regulations, or accounting principles, and, whenever the Committee determines that adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, the Committee may, using reasonable care, make adjustments in the terms and conditions of, and the criteria included in, Awards. In no event will the Committee, unless otherwise approved by shareholders, be permitted (i) to reduce the Exercise Price of any outstanding Stock Option or Stock Appreciation Right, (ii) cancel a Stock Option or Stock Appreciation Right in exchange for cash or other Awards (except as provided in Section 15.4), (iii) exchange or replace an outstanding Stock Option or Stock Appreciation Right with a new Stock Option or Stock Appreciation Right with a lower Exercise Price, or (iv) take any other action that would be a “repricing” of Stock Options or Stock Appreciation Rights. |
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(d) |
Notice . The Committee shall give notice of any adjustment to each Participant who holds an Award that has been adjusted and the adjustment (whether or not such notice is given) shall be effective and binding for all Plan purposes. |
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(e) |
Section 409A . Notwithstanding any provision herein to the contrary, no adjustment shall be made under this Section 15.2 to the extent it would give rise to adverse tax consequences under Section 409A. |
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15.3 |
Fractional Shares . Fractional Shares, whether resulting from any adjustment in Awards pursuant to Section 15.2 or otherwise, may be settled in cash or otherwise as the Committee determines. |
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15.4 |
Change in Control . |
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(a) |
If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) |
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without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, all then outstanding Awards shall become fully vested. |
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(b) |
Any Award that has not been fully exercised before the date of a Change in Control may be settled or otherwise terminated on such date in the discretion of the Committee, unless a provision has been made in writing in connection with such transaction for the assumption of all Awards theretofore granted, or the substitution for such Awards of awards to acquire the stock of the surviving, resulting or acquiring corporation, with any adjustments as the Committee determines appropriate, in which event the Awards theretofore granted shall continue in the manner and under the terms so provided. Notwithstanding anything in the Plan to the contrary, any underwater Award that has not been fully exercised, and any Award that the Committee determines cannot become vested, before the date of consummation of the Change in Control may be canceled without consideration in the discretion of the Committee. |
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15.5 |
Tax Withholding . The Company shall have the right to deduct or withhold, or require a Participant to remit to the Company, an amount (either in cash or Shares) sufficient to satisfy any Withholding Tax. |
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SECTION
16
Miscellaneous Provisions
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16.1 |
Successors . All obligations of the Company under the Plan or any Terms and Conditions shall be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the Company’s stock, or a merger or consolidation, or otherwise. |
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16.2 |
Legal Construction . |
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(a) |
Number . Except where otherwise indicated by the context, any plural term used in the Plan includes the singular and any singular term includes the plural. |
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(b) |
Severability . If any provision of the Plan is held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. |
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16.3 |
Business Day . In the event the day prescribed for the performance of any act under the Plan, or deadline by which such act must be performed, shall fall on a day other than a |
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Business Day, such day or deadline shall be extended until the close of business on the next succeeding Business Day. |
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16.4 |
Requirements of Law . The granting of Awards, the issuance of Shares and the payment of cash under the Plan shall be subject to all applicable laws, rules and regulations, and to any approvals by governmental agencies or national securities exchanges as may be required. |
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16.5 |
Rights of a Shareholder . A Participant shall not be, nor shall a Participant have any of the rights and privileges of, a shareholder until certificates for the underlying Shares have been issued or the underlying Shares have been registered as a book-entry in the name of the Participant. |
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16.6 |
Securities Law Compliance . |
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(a) |
As to any individual who is, on the relevant date, an officer, director or greater than 10% percent beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange Act, transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 under the Exchange Act, or any successor rule. To the extent any provision of the Plan or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee. |
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(b) |
To the extent the Committee deems it necessary, appropriate or desirable to comply with state securities laws or practice and to further the purposes of the Plan, the Committee may, without amending the Plan, (i) establish rules applicable to Awards granted to Participants, including rules that differ from those set forth in the Plan, and (ii) grant Awards to such Participants in accordance with those rules that would require the application of the securities laws of any state. |
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16.7 |
Unfunded Status of the Plan . The Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments or deliveries of Shares not yet made to a Participant by the Company, the Participant’s rights are no greater than those of a general creditor of the Company. The Committee may authorize the establishment of trusts or other arrangements to meet the obligations created under the Plan, so long as the arrangement does not cause the Plan to lose its legal status as an unfunded plan. |
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16.8 |
Non-U.S. Based Participant . Notwithstanding any other provision of the Plan to the contrary, the Committee may make Awards to Participants who are not citizens or residents of the United States, or to Participants outside the United States, on terms and conditions that are different from those specified in the Plan as may, in the Committee’s judgment, be necessary or desirable to foster and promote achievement of the Plan’s |
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Exhibit 10.44
Restricted Stock Unit Award
Terms and Conditions
Under
COTY INC. EQUITY AND LONG-TERM INCENTIVE PLAN
(as amended and restated April 8, 2013 and effective as of the Effective Date)
This instrument (the “ Terms and Conditions ”) evidences the grant effective on the date set forth in your total compensation letter (the “ Grant Date ”) of an award of Restricted Stock Units (the “Restricted Stock Units” ) by Coty Inc., a Delaware corporation (the “ Company ”). Any term capitalized but not defined in these Terms and Conditions will have the meaning set forth in the Coty Inc. Equity and Long-Term Incentive Plan, as amended and restated April 8, 2013 (the “ Plan ”).
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1. |
Restricted Stock Unit Grant. The Participant is hereby granted the Restricted Stock Units as of the Grant Date. The Restricted Stock Units, and any Shares acquired upon settlement thereof, are subject to the following terms and conditions and to the provisions of the Plan, the terms of which are incorporated by reference herein. This award is subject to cancellation unless the Participant executes and returns to the Company the Coty Inc. Confidentiality and Non-Competition Agreement by December 31 of the calendar year in which the Restricted Stock Units were granted. |
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2. |
Vesting Period. |
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(a) |
In General . The Restricted Stock Units shall vest on the fifth anniversary of the Grant Date provided the Participant has remained in continuous Service through such date. |
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(b) |
Change in Control . If, within twelve months following a Change in Control, (i) the Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) the Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, the Restricted Stock Units shall vest immediately. |
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(c) |
Joint Venture . If the Participant becomes an employee of a Joint Venture before the fifth anniversary of the Grant Date, vesting of the Restricted Stock Units shall be tolled beginning on the date the Participant becomes an employee of the Joint Venture and shall recommence on the date the Participant again becomes an Employee. Accordingly, the vesting period shall be extended by the number of days the Participant was an employee of the Joint Venture. |
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(d) |
Retirement, Death or Disability . In the Participant’s Service terminates due to Retirement, death or Disability before the Restricted Stock Units have otherwise become vested, then the number of Restricted Stock Units that shall become vested is multiplied by a fraction, the numerator of which is the number of days elapsed from the Grant Date to the date of the Participant’s termination of Service and the denominator of which is the number of days between the Grant Date and the date the Award was scheduled to become exercisable or otherwise vest. |
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(e) |
Forfeiture . In the event the Participant’s Service terminates for any reason not provided in Section 2(b) or 2(d) above, then notwithstanding any provision in the Plan or these Terms and Conditions to the contrary any unvested Restricted Stock Units granted to the Participant shall be immediately forfeited. |
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3. |
Nontransferability . |
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(a) |
Except as provided in Section 3(b), no Restricted Stock Units granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent or distribution and all rights with respect to the Restricted Stock Units shall be available during the Participant’s lifetime only to the Participant or the Participant’s guardian or legal representative. The Committee may, in its sole discretion, require the Participant’s guardian or legal representative to supply it with evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant. |
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(b) |
Subject to applicable law, Restricted Stock Units may be transferred to a Successor. Such transferred Restricted Stock Units may not be further sold, transferred, pledged, assigned or otherwise alienated by the Successor, and shall be subject in all respects to the terms of these Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan. |
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4. |
Settlement of Restricted Stock Units. Within fifteen (15) days after the Restricted Stock Units become vested according to the terms of Section 2, the Company shall deliver to the Participant for each Restricted Stock Unit one Share (thereafter an Owned Share) and the amount of dividends, dividend equivalents and other distributions paid with respect to a Share during the vesting period beginning on the Grant Date. |
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5. |
Securities Law Requirements. |
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(a) |
If at any time the Committee determines that issuing Shares would violate applicable securities laws, the Company will not be required to issue such Shares. The Committee may declare any provision of these Terms and Conditions or action of its own null and void, if it determines the provision or action fails to comply with the short-swing trading rules. As a condition to exercise, the Company may require the Participant to make written representations it deems necessary or desirable to comply with applicable securities laws. |
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(b) |
No Person who acquires Shares under these Terms and Conditions may sell the Shares, unless they make the offer and sale pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “ Securities Act ”), which is current and includes the Shares to be sold, or an exemption from the registration requirements of the Securities Act. |
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6. |
No Limitation on Rights of the Company. The grant of the Restricted Stock Units does not and will not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets. |
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7. |
Participant to Have No Rights as a Shareholder. Before the date as of which the Participant is recorded on the books of the Company as the holder of any Shares, the Participant will have no rights as a shareholder with respect to those Shares. |
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8. |
Notice. Any notice or other communication required or permitted under these Terms and Conditions must be in writing and must be delivered personally, sent by certified, registered or express mail, or sent by overnight courier, at the sender’s expense. Notice will be deemed given when delivered personally or, if mailed, three (3) days after the date of deposit in the United States mail or, if sent by overnight courier, on the regular business day following the date sent. Notice to the Company should be sent to: |
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Coty Inc. |
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Two Park Avenue |
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17 th Floor |
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New York, New York 10016 |
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Attention: General Counsel |
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Notice to the Participant should be sent to the address on file with the Company. Either party may change the Person and/or address to which the other party must give notice under this Section 13 by giving such other party written notice of such change, in accordance with the procedures described above. |
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9. |
Successors. All obligations of the Company under these Terms and Conditions will be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the business of the Company, or a merger, consolidation, or otherwise. |
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10. |
Governing Law. To the extent not preempted by federal law, these Terms and Conditions will be construed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction. |
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11. |
Plan and Terms and Conditions Not a Contract of Employment or Service. Neither the Plan nor these Terms and Conditions are a contract of employment or Service, and no terms of the Participant’s employment or Service will be affected in any way by the Plan, these Terms and Conditions or related instruments, except to the extent specifically expressed therein. Neither the Plan nor these Terms and Conditions will be construed as conferring any legal rights on the Participant to continue to be employed or remain in Service with the Company, nor will it interfere with any Company Party’s right to discharge the Participant or to deal with him or her regardless of the existence of the Plan, these Terms and Conditions or the Award. |
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12. |
Plan Document Controls. The rights granted under these Terms and Conditions are in all respects subject to the provisions set forth in the Plan to the same extent and with the same effect as if set forth fully in these Terms and Conditions. If the terms of these Terms and Conditions conflict with the terms of the Plan document, the Plan document will control. |
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13. |
Amendment of the Agreement. These Terms and Conditions may be amended unilaterally by the Committee to the extent provided under the Plan, or by a written instrument signed by both parties. |
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14. |
Entire Agreement. These Terms and Conditions, together with the Plan, constitutes the entire obligation of the parties with respect to the subject matter of these Terms and Conditions and supersedes any prior written or oral expressions of intent or understanding with respect to such subject matter. |
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15. |
Administration. The Committee administers the Plan and these Terms and Conditions. The Participant’s rights under these Terms and Conditions are expressly subject to the terms and conditions of the Plan, including any guidelines the Committee adopts from time to time. The Participant hereby acknowledges receipt of a copy of the Plan. |
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16. |
Section 409A. The Restricted Stock Units awarded pursuant to these Terms and Conditions are intended to comply with or, in the alternative, be exempt from Section 409A. Any reference to a termination of Service shall be construed as a “separation from service” for purposes of Section 409A. |
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COTY INC. |
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By: |
/s/ Jules Kaufman |
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Name: Jules Kaufman |
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Title: SVP, General Counsel and Secretary |
Exhibit 10.45
Restricted Stock and Restricted Stock Unit Tandem
Award
Terms and Conditions
Under
COTY INC. EQUITY AND LONG-TERM INCENTIVE PLAN
(As Amended and Restated April 8, 2013 and Effective as of the
Effective Date)
This instrument (the “Terms and Conditions” ) evidences the purchase by you (the “Participant” ) from Coty Inc., a Delaware corporation (the “Company” ), of shares of Restricted Stock and the grant to you by the Company of Restricted Stock Units pursuant to your proper election to participate in the Coty Platinum Plan in accordance with the election materials provided to you by the Company (the “Platinum Election” ). The purchase of that number of shares of Restricted Stock set forth in your Platinum Election (the “Restricted Shares” ) and the grant of Restricted Stock Units pursuant to your purchase of the Restricted Shares (the “Restricted Stock Units” and, together with the Restricted Shares, the “Award” ), is effective on the first Exercise Date following your Platinum Election (the “Grant Date” ). Any term capitalized but not defined in these Terms and Conditions will have the meaning set forth in the Coty Inc. Equity and Long-Term Incentive Plan, as amended and restated effective April 8, 2013 (the “Plan” ). The Award and any Shares acquired hereunder are subject to the following terms and conditions:
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1. |
Restricted Stock Investment . Subject to the terms herein, the Participant hereby purchases as of the Grant Date the Restricted Shares at the Fair Market Value per Share. Such purchase shall be null and void and have no further effect unless full payment for the Restricted Shares has been delivered to the Company no later than the Grant Date. |
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(a) |
Section 83(b) Election . As a condition to this purchase, the Participant, if a United States taxpayer, shall no later than thirty (30) days after the Grant Date file with the Internal Revenue Service an election under Section 83(b) of the Internal Revenue Code on the form provided to the Participant for this purpose and deliver a copy of such election to the Company. |
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(b) |
Restriction Period . The Restricted Period for Restricted Shares is the five-year period commencing on the Investment Date; provided , that a Participant’s Restriction Period shall immediately end upon the Participant’s termination of Service for any reason. After the Restriction Period, the Restricted Shares are referred to the Plan and this Agreement as the “ Owned Shares. ” |
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(c) |
Transferability. The Restricted Shares may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated by the Participant at any time. |
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(d) |
Custody of Restricted Stock. During the Restricted Period, the Shares of Restricted Stock shall be held for the benefit of the Participant in an account as may be designated by the Committee and monitored by the Company in accordance with the procedures designated by the Committee. |
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(e) |
Dividends and Other Distributions . The Participant shall receive regular dividends, dividend equivalents and other distributions paid on the Restricted Shares. |
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(f) |
Voting Rights . The Participant may exercise all voting rights with respect to the Restricted Shares. |
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2. |
Restricted Stock Unit Grant. Subject to the terms herein, the Participant hereby is granted the Restricted Stock Units as of the Grant Date. |
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(a) |
Settlement of Restricted Stock Units . Within fifteen (15) days after the Restricted Stock Units become vested pursuant to Section 2(b), the Company shall deliver to the Participant for each Restricted Stock Unit one Share (thereafter, an Owned Share). |
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(b) |
Restriction Period. |
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(i) |
In General . Except as otherwise provided in Section 2(b)(ii), 2(b)(iii) or 2(c), the Restricted Stock Unit shall become fully vested upon the expiration of the Restricted Period so long as the Participant has not sold, transferred, pledged, assigned or otherwise alienated or hypothecated any underlying Restricted Shares during the Restricted Period. |
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(ii) |
Change in Control . The Restriction Period shall immediately end and the Restricted Stock Units shall become fully vested if, within twelve months following a Change in Control, (i) the Participant is terminated by the Company or an employing Affiliate without Cause or (ii) the Participant resigns for Good Reason. |
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(iii) |
Retirement, Death or Disability . If the Participant’s Service terminates due to Retirement, Disability or death, the Restriction Period shall immediately end and the Restricted Stock Units shall become vested with respect to the Applicable Fraction, and any remaining Restricted Stock Units will be forfeited and canceled. The “Applicable Fraction” means a fraction, the numerator of which is the number of complete days elapsed from the Grant Date of an Award to the date of the Participant’s termination of Service and the denominator of which is the number of days between the Grant Date and the date the Award was scheduled to become exercisable or otherwise vest. |
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(c) |
Forfeiture . In the event the Participant’s Service terminates other than as provided in Section 2(b) above, then notwithstanding any provision in the Plan or these Terms and Conditions to the contrary any unvested Restricted Stock Units granted to the Participant shall be immediately forfeited. |
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(d) |
Dividend Equivalents . During the Restriction Period, Restricted Stock Units shall be credited with regular dividend equivalents, dividend equivalents and other distribution equivalents paid on the underlying Shares. Such dividend |
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equivalents, dividend equivalents and other distribution shall be subject to the same vesting conditions as the underlying Restricted Stock Units, and shall be paid within 30 days following the end of the Restriction Period. |
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(e) |
Voting Rights . The Participant shall have no voting rights with respect to Restricted Stock Units unless and until such Restricted Stock Units are settled in delivery of Shares. |
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(f) |
Nontransferability. |
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(i) |
Awards . Except as provided in Section 2(f)(i), during the Restricted Period, (i) no Restricted Stock Unit granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and (ii) all rights with respect to Restricted Stock Units shall be available during the Participant’s lifetime only to the Participant or the Participant’s guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant. |
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(ii) |
Successors. Subject to applicable law, Restricted Stock Units may be transferred to a Successor. Such transferred Restricted Stock Units may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 2(f)(ii), and shall be subject in all respects to these Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan. |
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3. |
Securities Law Requirements. |
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(a) |
If at any time the Committee determines that issuing Shares would violate applicable securities laws, the Company will not be required to issue such Shares. The Committee may declare any provision of these Terms and Conditions or action of its own null and void, if it determines the provision or action fails to comply with the short-swing trading rules. As a condition to exercise, the Company may require the Participant to make written representations it deems necessary or desirable to comply with applicable securities laws. |
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(b) |
No Person who acquires Shares under these Terms and Conditions may sell the Shares, unless they make the offer and sale pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “ Securities Act ”), which is current and includes the Shares to be sold, or an exemption from the registration requirements of the Securities Act. |
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4. |
No Limitation on Rights of the Company. The grant of the Award does not and will not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets. |
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5. |
Participant to Have No Rights as a Shareholder. Before the date as of which the Participant is recorded on the books of the Company as the holder of any Shares, the Participant will have no rights as a shareholder with respect to those Shares. |
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6. |
Notice . Any notice or other communication required or permitted under these Terms and Conditions must be in writing and must be delivered personally, sent by certified, registered or express mail, or sent by overnight courier, at the sender’s expense. Notice will be deemed given when delivered personally or, if mailed, three (3) days after the date of deposit in the United States mail or, if sent by overnight courier, on the regular business day following the date sent. Notice to the Company should be sent to: |
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Coty Inc. |
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Two Park Avenue |
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17 th Floor |
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New York, New York 10016 |
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Attention: General Counsel |
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Notice to the Participant should be sent to the address on file with the Company. Either party may change the Person and/or address to which the other party must give notice under these Terms and Conditions by giving such other party written notice of such change, in accordance with the procedures described above. |
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7. |
Successors . All obligations of the Company under these Terms and Conditions will be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the business of the Company, or a merger, consolidation, or otherwise. |
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8. |
Governing Law . To the extent not preempted by federal law, these Terms and Conditions will be construed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction. |
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9. |
Plan and Terms and Conditions Not a Contract of Employment or Service . Neither the Plan nor these Terms and Conditions are a contract of employment or Service, and no terms of the Participant’s employment or Service will be affected in any way by the Plan, these Terms and Conditions or related instruments, except to the extent specifically expressed therein. Neither the Plan nor these Terms and Conditions will be construed as conferring any legal rights on the Participant to continue to be employed or remain in Service with the Company, nor will it interfere with any Company Party’s right to discharge the Participant or to deal with him or her regardless of the existence of the Plan, these Terms and Conditions or the Award. |
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10. |
Plan Document Controls . The rights granted under these Terms and Conditions are in all respects subject to the provisions set forth in the Plan to the same extent and with the same effect as if set forth fully in these Terms and Conditions. If the terms of these Terms and Conditions conflict with the terms of the Plan document, the Plan document will control. |
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11. |
Amendment of the Agreement . These Terms and Conditions may be amended unilaterally by the Committee to the extent provided under the Plan, or by a written instrument signed by both parties. |
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12. |
Entire Agreement . These Terms and Conditions, together with the Plan, constitutes the entire obligation of the parties with respect to the subject matter of these Terms and Conditions and supersedes any prior written or oral expressions of intent or understanding with respect to such subject matter. |
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13. |
Administration . The Committee administers the Plan and these Terms and Conditions. The Participant’s rights under these Terms and Conditions are expressly subject to the terms and conditions of the Plan, including any guidelines the Committee adopts from time to time. The Participant hereby acknowledges receipt of a copy of the Plan. |
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14. |
Section 409A . The Award pursuant to these Terms and Conditions are intended to comply with or, in the alternative, be exempt from Section 409A. Any reference to a termination of Service shall be construed as a “separation from service” for purposes of Section 409A. |
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COTY INC. |
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By: |
/s/ Jules Kaufman |
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Name: Jules Kaufman |
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Title: SVP, General Counsel and Secretary |