Exhibit 1.1
CONTINENTAL BUILDING PRODUCTS, INC.
[13,236,000] Shares
Common Stock
($0.001 par value)
Form of
Underwriting Agreement
New York, New York
February [ ], 2014
Citigroup Global Markets Inc.
Credit Suisse Securities (USA)
LLC
As Representatives of the several Underwriters,
c/o
Citigroup Global Markets Inc.
388 Greenwich Street
New
York, New York 10013
and
c/o Credit Suisse Securities
(USA) LLC
Eleven Madison Avenue
New York, New York 10010
Ladies and Gentlemen:
Continental Building
Products, Inc., a corporation organized under the laws of Delaware (the “Company”), proposes to sell to the several underwriters named in Schedule I hereto (the “Underwriters”), for whom you (the “Representatives”) are
acting as representatives, [11,765,000] shares of common stock, $0.001 par value (“Common Stock”) of the Company and LSF8 Gypsum Holdings, L.P., a Delaware limited partnership (the “Selling Stockholder”), proposes to sell to the
several Underwriters [1,471,000] shares of Common Stock (said shares to be issued and sold by the Company and said shares to be sold by the Selling Stockholder collectively being hereinafter called the “Underwritten Securities”). The
Selling Stockholder also proposes to grant to the Underwriters an option to purchase up to [1,985,400] additional shares of Common Stock to cover over-allotments, if any (the “Option Securities”; the Option Securities, together with the
Underwritten Securities, being hereinafter called the “Securities”). To the extent there are no additional Underwriters listed on Schedule I other than you, the term Representatives as used herein shall mean you, as Underwriters, and the
terms Representatives and Underwriters shall mean either the singular or plural as the context requires. Certain terms used herein are defined in Section 20 hereof.
1.
Representations and Warranties.
(i) The Company represents and warrants to, and agrees with, each Underwriter as set forth below in this Section 1.
(a) The Company has prepared and filed with the Commission a registration
statement (file number 333-193078) on Form S-1, including a related preliminary prospectus, for registration under the Act of the offering and sale of the Securities. Such Registration Statement, including any amendments thereto filed prior to
the Execution Time, has become effective. The Company may have filed one or more amendments thereto, including a related preliminary prospectus, each of which has previously been furnished to you. The Company will file with the Commission a final
prospectus in accordance with Rule 424(b). As filed, such final prospectus shall contain all information required by the Act and the rules thereunder and, except to the extent the Representatives shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the latest
Preliminary Prospectus) as the Company has advised you, prior to the Execution Time, will be included or made therein.
(b)
On the Effective Date, the Registration Statement did, and when the Prospectus is first filed in accordance with Rule 424(b) and on the Closing Date (as defined herein) and on any date on which Option Securities are purchased, if such date is
not the Closing Date (a “settlement date”), the Prospectus (and any supplement thereto) will, comply in all material respects with the applicable requirements of the Act and the rules thereunder; on the Effective Date and at the Execution
Time, the Registration Statement did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, not misleading; and on the
date of any filing pursuant to Rule 424(b) and on the Closing Date and any settlement date, the Prospectus (together with any supplement thereto) will not include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
provided
,
however
, that the Company makes no representations or warranties as to the information contained
in or omitted from the Registration Statement, or the Prospectus (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the Prospectus (or any supplement thereto), it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information described
as such in Section 8(b) hereof.
(c) (i) The Disclosure Package and the price to the public, the number of
Underwritten Securities and the number of Option Securities to be included on the cover page of the Prospectus, when taken together as a whole and (ii) each electronic road show, when taken together as a whole with the Disclosure Package and
the price to the public, the number of Underwritten Securities and the number of Option Securities to be included on the cover page of the Prospectus, does not contain any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Disclosure Package based upon and in
conformity with written information furnished to the
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Company by or on behalf of any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in Section 8(b) hereof.
(d) (i) At the time of filing the
Registration Statement and (ii) as of the Execution Time (with such date being used as the determination date for purposes of this clause (ii)), the Company was not and is not an Ineligible Issuer (as defined in Rule 405), without taking
account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an Ineligible Issuer.
(e) From the time of initial confidential submission of the Registration Statement to the Commission through the Execution
Time, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of the Securities Act (an “Emerging Growth Company”).
(f) The Company (i) has not engaged in any Testing-the-Waters Communication and (ii) has not authorized anyone to
engage in Testing-the-Waters Communications. The Company has not distributed any Written Testing-the-Waters Communications. “Testing-the-Waters Communication” means any oral or written communication with potential investors undertaken in
reliance on Section 5(d) of the Securities Act. “Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act.
(g) Each Issuer Free Writing Prospectus does not include any information that conflicts with the information contained in the
Registration Statement. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter
through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information described as such in Section 8(b) hereof.
(h) Each of the Company and its subsidiaries has been duly incorporated, organized or formed and is validly existing and in
good standing under the laws of the jurisdiction in which it is chartered or organized with full corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Disclosure
Package and the Prospectus, and is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction which requires such qualification, except where the failure to be so qualified or in good standing
could not, in the aggregate, reasonably be expected to have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole (a “Material
Adverse Effect”).
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(i) The subsidiaries listed on Annex A attached hereto are the only significant
subsidiaries of the Company as defined by Rule 1-02 of Regulation S-X.
(j) The Company’s authorized equity
capitalization is as set forth in the Disclosure Package and the Prospectus; the capital stock of the Company conforms in all material respects to the description thereof contained in the Disclosure Package and the Prospectus; the outstanding shares
of Common Stock have been duly and validly authorized and issued and are fully paid and nonassessable; the Securities being sold hereunder by the Company and the Selling Stockholder have been duly and validly authorized, and, when issued and
delivered to and paid for by the Underwriters pursuant to this Agreement, will be fully paid and nonassessable; the Securities being sold by the Company are duly listed, and admitted and authorized for trading, on the New York Stock Exchange
(the “NYSE”), subject to official notice of issuance; the certificates for the Securities are in valid and sufficient form; the Company’s sole stockholder does not have any preemptive rights to subscribe for the Securities; and,
except as set forth in the Disclosure Package, the Registration Statement and the Prospectus, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership interests in the Company are outstanding.
(k) All the outstanding
shares of capital stock or ownership interests of each of the Company’s subsidiaries have been duly and validly authorized and issued and are fully paid and nonassessable, and, except as otherwise set forth in the Disclosure Package, the
Registration Statement and the Prospectus, all outstanding shares of capital stock or ownership interests of the Company’s subsidiaries are owned by the Company, either directly or through wholly owned subsidiaries, free and clear of any
perfected security interest or any other security interests, claims, liens or encumbrances.
(l) There is no franchise,
contract or other document of a character required to be described in the Registration Statement or Prospectus, or to be filed as an exhibit thereto, which is not described or filed as required (and the Preliminary Prospectus contains in all
material respects the same description of the foregoing matters contained in the Prospectus); and the statements in the Preliminary Prospectus and the Prospectus under the headings “U.S. Federal Tax Considerations for Non-U.S. Holders”,
“Certain Relationships and Related Party Transactions”, “Business-Environmental Matters” and “Business–Legal Proceedings” insofar as such statements summarize legal matters, agreements, documents or proceedings
discussed therein, are, in all material respects, accurate and fair summaries of such legal matters, agreements, documents or proceedings.
(m) This Agreement has been duly authorized, executed and delivered by the Company.
(n) The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds
thereof as described in the Disclosure Package and the Prospectus, will not be an “investment company” as defined in the Investment Company Act of 1940, as amended.
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(o) No consent, approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the transactions contemplated herein, except (i) such as have been obtained under the Act, (ii) the approval of the Financial Industry Regulatory Authority, Inc.
(“FINRA”), (iii) such as may be required under the blue sky laws of any jurisdiction in which the Securities are offered and sold and (iv) for such consents that, if not obtained, would not have a Material Adverse Effect and as
would materially adversely affect the ability of the Underwriters to consummate the transactions contemplated by this Agreement.
(p) None of the issue and sale of the Securities, the consummation of any other of the transactions herein contemplated or the
fulfillment of the terms hereof will conflict with, or result in a breach or violation of, or an imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, (i) the charter,
by-laws or similar organizational documents of the Company or any of its subsidiaries, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant
or instrument to which the Company or any of its subsidiaries is a party or bound or to which its or their property is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or any of its subsidiaries or any of their properties, except, in the case of clauses
(ii) and (iii), would not have a Material Adverse Effect and as would materially adversely affect the ability of the Underwriters to consummate the transactions contemplated by this Agreement.
(q) No holders of securities of the Company have rights to the registration of such securities under the Registration
Statement.
(r) The consolidated historical financial statements and schedules of the Company and its consolidated
subsidiaries and the gypsum division of Lafarge North America, Inc. (“North American Gypsum Business”) included in the Preliminary Prospectus, the Prospectus and the Registration Statement present fairly the respective financial condition,
results of operations and cash flows of the Company and the North American Gypsum Business as of the dates and for the periods indicated, comply as to form in all material respects with the applicable accounting requirements of the Act and have been
prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis throughout the periods involved (except as otherwise noted therein). The selected financial data set forth under the caption
“Selected Historical Financial and Operating Data” in the Preliminary Prospectus, the Prospectus and Registration Statement fairly present, on the basis stated in the Preliminary Prospectus, the Prospectus and the Registration Statement,
the information included therein. The pro forma financial statements included in the Preliminary Prospectus, the Prospectus and the Registration Statement under the caption “Unaudited Pro Forma Combined Financial Information” fairly
present, on the basis stated therein, the historical financial information included therein; and the pro forma financial information and the related notes thereto included in the Preliminary Prospectus, the Prospectus and the Registration Statement
have been prepared in accordance with the Commission’s rules
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and guidance with respect to pro forma consolidated financial statements and the assumptions used in the preparation of such pro forma consolidated financial information are reasonable and are
set forth in each of the Preliminary Prospectus, the Prospectus and the Registration Statement.
(s) No action, suit or
proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries or their property is pending or, to the best knowledge of the Company, threatened that (i) would
reasonably be expected to have a material adverse effect on the performance of this Agreement or the consummation of any of the transactions contemplated hereby or (ii) would reasonably be expected to have a Material Adverse Effect, except as
set forth in or contemplated in the Disclosure Package and the Prospectus (exclusive of any supplement thereto).
(t) Each
of the Company and its subsidiaries owns or leases all such properties as are necessary to the conduct of its operations as presently conducted.
(u) None of the Company or any of its subsidiaries is in violation or default of (i) any provision of its charter or
bylaws, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to the Company or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or such subsidiary or any of its properties, as applicable, which violation or default would, in the case of clauses (ii) and (iii) above, either individually or in the aggregate with all other violations and
defaults referred to in this paragraph (u) (if any), have (A) a Material Adverse Effect or (B) materially impair the ability of the Company to perform its obligations in connection with the transactions contemplated herein.
(v) Ernst & Young LLP, who have certified certain financial statements of the Company and its consolidated
subsidiaries and the North American Gypsum Business and delivered their report with respect to the audited consolidated financial statements and schedules included in the Disclosure Package and the Prospectus, are independent public accountants with
respect to the Company within the meaning of the Act and the applicable published rules and regulations thereunder.
(w) To
the best of the Company’s knowledge, there are no transfer taxes or other similar fees or charges under Federal law or the laws of any state, or any political subdivision thereof, required to be paid in connection with the execution and
delivery of this Agreement or the issuance by the Company or sale by the Company of the Securities.
(x) The Company has
filed all applicable tax returns that are required to be filed or has requested extensions thereof (except in any case in which the failure to so file would not have a Material Adverse Effect) and has paid all taxes required to be paid by it and any
other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being contested in good faith or as would not have a Material Adverse
Effect.
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(y) No labor problem or dispute with the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, is threatened or imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or its subsidiaries’ principal suppliers, contractors
or customers, except as would not have a Material Adverse Effect.
(z) The Company and each of its subsidiaries are insured
by insurers of recognized financial responsibility (except with respect to liabilities which the Company self-insures) against such losses and risks and in such amounts as are adequate and customary in the businesses in which they are engaged; all
material policies of insurance and fidelity or surety bonds insuring the Company or any of its subsidiaries or their respective businesses, assets, employees, officers and directors are in full force and effect; the Company and its subsidiaries are
in compliance in all material respects with the terms of such policies and instruments; there are no claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause; none of the Company or any subsidiary has been refused any insurance coverage sought or applied for; and none of the Company or any subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect
(aa) No subsidiary of the Company is currently prohibited, directly or indirectly, from paying any dividends to the Company,
from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s property or assets to the Company
or any other subsidiary of the Company, except as described in or contemplated by the Disclosure Package and the Prospectus (exclusive of any supplement thereto).
(bb) The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by all
applicable authorities necessary to conduct their respective businesses, except for any of the foregoing which, if not obtained, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and none of the
Company or any subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect.
(cc) The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles in the United States and to
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maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and its subsidiaries’ internal controls over financial reporting are effective and the Company and
its subsidiaries are not aware of any material weakness in their internal controls over financial reporting.
(dd) The
Company and its subsidiaries maintain “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) under the Exchange Act); such disclosure controls and procedures are effective.
(ee) The Company has not taken, directly or indirectly, any action designed to or that has constituted or that might reasonably
be expected to cause or result in, under the Exchange Act or otherwise, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
(ff) The Company and its subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received and are in compliance with
all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) have not received notice of any actual or potential liability under any environmental law, except
where such non-compliance with Environmental Laws, failure to receive required permits, licenses or other approvals, or liability would not have a Material Adverse Effect. Except as set forth in the Disclosure Package, the Registration Statement and
the Prospectus, none of the Company or its subsidiaries has been named as a “potentially responsible party” under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended.
(gg) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, there are
no facts, circumstances or conditions that reasonably could give rise to the Company or its subsidiaries incurring costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws, or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) arising under or relating to Environmental Laws.
(hh) Since the time of formation of the Company, (i) none of the Company or any of its subsidiaries has established,
sponsored, maintained, contributed to, or could reasonably be expected to be required to contribute to, a “pension plan” (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”)) that is subject to, or could reasonably be expected to be subject to, the minimum funding requirements of Section 412 or 430 of the Internal Revenue Code of 1986, as amended (the “Code”) or that is subject to, or
could reasonably be expected to be subject to, Title IV of ERISA, or any “multiemployer plan” (as defined in Section 3(37) of ERISA), and (ii) none of the Company or any of its subsidiaries has incurred, or
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could reasonably be expected to incur, any liability under Title IV of ERISA. Except as disclosed in writing to the Underwriters, none of the Company or any of its subsidiaries has established,
sponsored, maintained, contributed to, or could reasonably be expected to be required to contribute to, any retiree medical or retiree welfare benefits arrangement (other than an arrangement that provides “continuation coverage” (as
defined in Section 602 of ERISA or 4980B of the Code) or similar governmental arrangement). Except as could not, individually or in the aggregate, have a Material Adverse Effect, each employee benefit plan which is established, sponsored,
maintained, or contributed to by the Company and/or one or more of its subsidiaries, or to which the Company and/or one or more of its subsidiaries could reasonably be expected to be required to contribute, is currently in compliance, and is
reasonably expected to remain in compliance with the currently applicable provisions of ERISA, the Code and other laws, including but not limited to, the laws regarding tax qualification standards under the Code. None of the following events has
occurred, exists or is reasonably likely to occur: (i) an audit or investigation by the Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation or any other federal or state governmental agency or any
foreign regulatory agency with respect to the employment or compensation of employees by the Company or any of its subsidiaries that could have a Material Adverse Effect; (ii) any breach of any contractual obligation, or any violation of law
with respect to the employment or compensation of employees by the Company or any of its subsidiaries that could have a Material Adverse Effect; (iii) a material increase in the “accumulated post-retirement benefit obligations”
(within the meaning of Statement of Financial Accounting Standards 106), if any, of the Company and its subsidiaries compared to the amount of such obligations, if any, as of the date hereof; and (iv) the filing of a claim by one or more
employees or former employees of the Company or any of its subsidiaries related to their employment that could have a Material Adverse Effect.
(ii) None of the Company or any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee
or affiliate of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the
payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the FCPA; and the Company, its subsidiaries and, to the knowledge of the Company, its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(jj) The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements and the money laundering statutes and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”)
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and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money
Laundering Laws is pending or, to the best knowledge of the Company, threatened.
(kk) None of the Company or any of its
subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries (i) is currently subject to any sanctions administered by the United States (including any
administered or enforced by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”)) or (ii) will, directly or indirectly, use the proceeds of this offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person, in any manner that will result in a violation of any economic sanctions imposed by the United States (including any administered or enforced by OFAC, the U.S. Department of State, or
the Bureau of Industry and Security of the U.S. Department of Commerce), the United Nations Security Council, the European Union, or the United Kingdom (including sanctions administered or controlled by Her Majesty’s Treasury) (collectively,
“Sanctions” and such persons, “Sanction Persons”), by, or that could result in the imposition of Sanctions against, any person (including any person participating in the offering, whether as underwriter, advisor, investor or
otherwise).
(ll) None of the Company or its subsidiaries nor, to the knowledge of the Company, any director, officer,
agent, employee or affiliate of the Company or any of its subsidiaries, is a person that is, or is 50% or more owned or otherwise controlled by a person that is: (i) the subject of any Sanctions; or (ii) located, organized or resident in a
country or territory that is, or whose government is, the subject of Sanctions that broadly prohibit dealings with that country or territory (currently, Cuba, Iran, North Korea, Sudan, and Syria) (collectively, “Sanctioned Countries” and
each, a “Sanctioned Country”).
(mm) Except as has been disclosed to the Underwriters or is not material to the
analysis under any Sanctions, neither the Company nor any of its subsidiaries has engaged in any dealings or transactions with or for the benefit of a Sanctioned Person, or with or in a Sanctioned Country, in the preceding 3 years, nor does the
Company or any of its subsidiaries have any plans to increase its dealings or transactions with Sanctioned Persons, or with or in Sanctioned Countries.
Any certificate signed by any officer of the Company and delivered to the Representatives or counsel for the Underwriters in connection with
the offering of the Securities shall be deemed a representation and warranty by the Company, as to matters covered thereby, to each Underwriter.
(ii) The Selling Stockholder represents and warrants to, and agrees with, each Underwriter that:
(a) The Selling Stockholder has been duly organized and is validly existing and in good standing under the laws of the
jurisdiction in which it is organized. LSF8 GenPar, LLC, as general partner of the Selling Stockholder, has been duly organized and is validly existing and in good standing under the laws of the jurisdiction in which it is organized.
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(b) This Agreement has been duly authorized, executed and delivered by the
Selling Stockholder.
(c) The Selling Stockholder is the record and beneficial owner of the Securities to be sold by it
hereunder free and clear of all liens, encumbrances, equities and claims and has duly endorsed such Securities in blank, and has full power and authority to sell its interest in the Securities, and, assuming that each Underwriter acquires its
interest in the Securities it has purchased from the Selling Stockholder without notice of any adverse claim (within the meaning of Section 8-105 of the New York Uniform Commercial Code (“UCC”)), each Underwriter that has purchased
such Securities delivered on the Closing Date to The Depository Trust Company or other securities intermediary by making payment therefor as provided herein, and that has had such Securities credited to the securities account or accounts of such
Underwriters maintained with The Depository Trust Company or such other securities intermediary will have acquired a security entitlement (within the meaning of Section 8-102(a)(17) of the UCC) to such Securities purchased by such Underwriter,
and no action based on an adverse claim (within the meaning of Section 8-105 of the UCC) may be asserted against such Underwriter with respect to such security entitlement.
(d) The Selling Stockholder has not taken, directly or indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
(e) No consent, approval, authorization or order of any court or governmental agency or body is required for the consummation
by the Selling Stockholder of the transactions contemplated herein, except such as may have been obtained under the Act, such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters, such as would not, individually or in the aggregate, adversely affect the ability of the Selling Stockholder to perform its obligations hereunder and the Underwriters’ ability to consummate the transactions
contemplated by this Agreement, and such other approvals as have been obtained.
(f) Neither the sale of the Securities
being sold by the Selling Stockholder nor the consummation of any other of the transactions herein contemplated by the Selling Stockholder or the fulfillment of the terms hereof by the Selling Stockholder will conflict with, result in a breach or
violation of, or constitute a default under any law or the organizational documents of the Selling Stockholder or the terms of any indenture or other agreement or instrument to which the Selling Stockholder or any of its subsidiaries is a party or
bound, or any judgment, order or decree applicable to the Selling Stockholder or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body or arbitrator having jurisdiction over the Selling Stockholder
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or any of its subsidiaries except, as would not reasonably be expected to materially and adversely affect the ability of the Selling Stockholder to perform its obligations hereunder and the
Underwriters’ ability to consummate the transactions contemplated by this Agreement.
(g) Without having undertaken to
determine independently the accuracy or completeness of either the representations and warranties of the Company contained herein or the information contained in the Registration Statement, the General Disclosure Package and the Prospectus, the
Selling Stockholder has no reason to believe that the representations and warranties of the Company contained in this Section 1 are not true and correct, is familiar with the Registration Statement, Disclosure Package and Prospectus and has no
knowledge of any material fact, condition or information not disclosed in the Disclosure Package and the Prospectus or any supplement thereto, which has had or may have a Material Adverse Effect; and the sale of Securities by the Selling Stockholder
pursuant hereto is not prompted by any information concerning the Company or any of its subsidiaries which is not set forth in the Disclosure Package and the Prospectus.
Any certificate signed by any authorized representative of the Selling Stockholder and delivered to the Representatives or counsel for the
Underwriters in connection with the offering of the Securities shall be deemed a representation and warranty by the Selling Stockholder, as to matters covered thereby, to each Underwriter.
2.
Purchase and Sale.
(a) Subject to the terms and conditions and in reliance upon the representations and warranties herein set
forth, the Company and the Selling Stockholder agree to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company and the Selling Stockholder, at a purchase price of $[•] per share, the
amount of Underwritten Securities set forth opposite such Underwriter’s name in Schedule I hereto.
(b) Subject
to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Selling Stockholder hereby grants an option to the several Underwriters to purchase, severally and not jointly, up to [1,985,400] Option
Securities at the same purchase price per share as the Underwriters shall pay for the Underwritten Securities, less an amount per share equal to any dividends or distributions declared by the Company and payable on the Underwritten Securities but
not payable on the Option Securities. Said option may be exercised only to cover over-allotments in the sale of the Underwritten Securities by the Underwriters. Said option may be exercised in whole or in part at any time on or before the 30th day
after the date of the Prospectus upon written, electronic or telegraphic notice by the Representatives to the Company and such Selling Stockholder setting forth the number of shares of the Option Securities as to which the several Underwriters are
exercising the option and the settlement date. The number of Option Securities to be purchased by each Underwriter shall be the same percentage of the total number of shares of the Option Securities to be purchased by the several Underwriters as
such Underwriter is purchasing of the Underwritten Securities, subject to such adjustments as you in your absolute discretion shall make to eliminate any fractional shares.
12
The Selling Stockholder will pay all applicable state transfer taxes, if any,
involved in the transfer to the several Underwriters of the Securities to be purchased by them from the Selling Stockholder and the respective Underwriters will pay any additional stock transfer taxes involved in further transfers.
The Company and the Selling Stockholder hereby confirm their engagement of Citigroup Global Markets Inc. as, and Citigroup
Global Markets Inc. hereby confirms its agreement with the Company and the Selling Stockholder to render services as, a “qualified independent underwriter” within the meaning of Rule 5121 (“Rule 5121”) of FINRA with respect to
the offering and sale of the Securities. Citigroup Global Markets Inc., in its capacity as qualified independent underwriter and not otherwise, is referred to herein as the “Independent Underwriter.” No compensation will be paid to the
Independent Underwriter for its services as such.
3.
Delivery and Payment.
Delivery of and payment for the Underwritten Securities
and the Option Securities (if the option provided for in Section 2(b) hereof shall have been exercised on or before the third Business Day immediately preceding the Closing Date) shall be made at 10:00 AM, New York City time, on February [
], 2014, or at such time on such later date not more than three Business Days after the foregoing date as the Representatives shall designate, which date and time may be postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the Securities being herein called the “Closing Date”). Delivery of the Securities shall be made to the Representatives for the respective accounts of the
several Underwriters against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company or the Selling Stockholder, as applicable, by wire transfer payable in same-day funds to
an account specified by the Company or the Selling Stockholder, as applicable. Delivery of the Underwritten Securities and the Option Securities shall be made through the facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after the third Business Day immediately
preceding the Closing Date, the Selling Stockholder will deliver the Option Securities to the Representatives through the facilities of The Depository Trust Company, unless the Representatives shall otherwise instruct, on the date specified by the
Representatives (which shall be within three Business Days after exercise of said option) for the respective accounts of the several Underwriters, against payment by the several Underwriters through the Representatives of the purchase price thereof
to or upon the order of the Selling Stockholder by wire transfer payable in same-day funds to an account specified by the Selling Stockholder. If settlement for the Option Securities occurs after the Closing Date, the Company and Selling Stockholder
will deliver to the Representatives on the settlement date for the Option Securities, and the obligation of the Underwriters to purchase the Option Securities shall be conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on the Closing Date pursuant to Section 6 hereof.
4.
Offering by Underwriters.
It is understood that the several Underwriters propose to offer the Securities for sale to the public as set forth in the Prospectus.
13
5.
Agreements.
(i) The Company agrees with the several Underwriters that:
(a) Prior to the termination of the offering of the Securities, the Company will not file any amendment of the Registration
Statement or supplement to the Prospectus or any Rule 462(b) Registration Statement unless the Company has furnished you a copy for your review prior to filing and will not file any such proposed amendment or supplement to which you reasonably
object in a timely manner. The Company will cause the Prospectus, properly completed, and any supplement thereto to be filed in a form reasonably approved by the Representatives with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will provide evidence satisfactory to the Representatives of such timely filing. The Company will promptly advise the Representatives (i) when the Prospectus, and any supplement thereto,
shall have been filed (if required) with the Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement shall have been filed with the Commission, (ii) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been filed or become effective, (iii) of any request by the Commission or its staff for any amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any notice objecting to its use or
the institution or threatening of any proceeding for that purpose and (v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the institution or
threatening of any proceeding for such purpose. The Company will use its reasonable best efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or objection to the use of the Registration Statement and, upon
such issuance, occurrence or notice of objection, to obtain as soon as practicable the withdrawal of such stop order or relief from such occurrence or objection, including, if necessary, by filing an amendment to the Registration Statement or a new
registration statement and using its reasonable best efforts to have such amendment or new registration statement declared effective as soon as practicable.
(b) If, at any time prior to the filing of the Prospectus pursuant to Rule 424(b), any event occurs as a result of which the
Disclosure Package would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made at such time not misleading, the
Company will (i) notify promptly the Representatives so that any use of the Disclosure Package may cease until it is amended or supplemented; (ii) amend or supplement the Disclosure Package to correct such statement or omission; and
(iii) supply any amendment or supplement to you in such quantities as you may reasonably request.
14
(c) If, at any time when a prospectus relating to the Securities is required to
be delivered under the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), any event occurs as a result of which the Prospectus as then supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made or the circumstances then prevailing not misleading, or if it shall be necessary to amend the Registration
Statement or supplement the Prospectus to comply with the Act or the rules thereunder, the Company promptly will (i) notify the Representatives of any such event; (ii) prepare and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement which will correct such statement or omission or effect such compliance; and (iii) supply any supplemented Prospectus to you in such quantities as you may reasonably request.
(d) As soon as practicable, the Company will make generally available to its security holders and to the Representatives
an earnings statement or statements of the Company and its subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158.
(e) The Company will furnish to the Representatives and counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including exhibits thereto) and to each other Underwriter a copy of the Registration Statement (without exhibits thereto) and, so long as delivery of a prospectus by an Underwriter or dealer may be required by the Act
(including in circumstances where such requirement may be satisfied pursuant to Rule 172), as many copies of each Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus and any supplement thereto as the Representatives may
reasonably request.
(f) The Company will arrange, if necessary, for the qualification of the Securities for sale under the
laws of such jurisdictions as the Representatives may reasonably designate and will maintain such qualifications in effect so long as required for the distribution of the Securities; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would subject it to service of process in suits, other than those arising out of the offering or sale of the Securities, in any jurisdiction where
it is not now so subject.
(g) The Company will not, without the prior written consent of the Representatives, offer, sell,
contract to sell, pledge, or otherwise dispose of, (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of the Company or any person in privity with the Company or any affiliate of the Company) directly or indirectly, including the filing (or participation in the filing) of a registration
statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, any other shares of Common Stock or any
securities convertible into, or exercisable, or exchangeable for, shares of Common Stock; or publicly announce an intention to effect any such transaction, for a period of 180 days after the date of this Agreement,
provided
,
however
,
that the Company may (i) issue and sell the Securities to be sold hereunder, (ii)
15
issue and sell Common Stock pursuant to any employee stock option plan, stock incentive plan, stock ownership plan or dividend reinvestment plan of the Company in effect at the Execution Time,
(iii) issue Common Stock issuable upon the conversion of securities or the exercise of warrants outstanding at the Execution Time, (iv) file one or more registration statements on Form S-8, and (v) issue and sell in private placements
without registration under the Act up to the number of shares of Common Stock representing 5% of the total number of outstanding shares of Common Stock (or options, warrants, or other securities convertible into or exercisable, or exchangeable for,
shares of Common Stock) in connection with bona fide mergers or acquisitions, joint ventures, commercial relationships or other strategic transactions, provided that the acquirer of any such shares of Common Stock (or options, warrants or other
securities convertible into or exchangeable for shares of Common Stock) so issued pursuant to this subclause (v) enters into an agreement in the form of Exhibit A hereto with respect to such shares of Common Stock (or options, warrants or other
securities convertible into or exercisable, or exchangeable for, shares of Common Stock) for the remainder of the 180-day restricted period.
(h) If the Representatives in their sole discretion, agree to release or waive the restrictions set forth in a lock-up letter
described in Section 6(j) hereof for an officer or director of the Company and provides the Company with notice of the impending release or waiver at least three Business Days before the effective date of the release or waiver, the Company
agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit B hereto through a major news service at least two Business Days before the effective date of the release or waiver.
(i) The Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably
be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
(j) The Company agrees to pay the costs and expenses relating to the following matters: (i) the preparation, printing or
reproduction and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), each Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus, and each amendment or supplement to
any of them; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, each Preliminary Prospectus, the Prospectus and each
Issuer Free Writing Prospectus, and all amendments or supplements to any of them, as may, in each case, be reasonably requested for use in connection with the offering and sale of the Securities; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Securities, including any stamp or transfer taxes in connection with the original issuance and sale of the Securities; (iv) the printing (or reproduction) and delivery of this Agreement, any blue
sky memorandum and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Securities; (v) the registration of the Securities under the Exchange Act and the listing of the Securities on the
NYSE; (vi) any registration or qualification of the Securities for offer and sale under the securities or blue
16
sky laws of the several states (including filing fees and the reasonable and documented fees and expenses of counsel for the Underwriters relating to such registration and qualification);
(vii) any filings required to be made with FINRA (including filing fees and the reasonable and documented fees and expenses of counsel for the Underwriters relating to such filings), provided that the reasonable fees and expenses of counsel for
the Underwriters relating to subclause (vi) and (vii) of this Section 5(j) shall not exceed $25,000; (viii) the transportation and other expenses incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Securities; (ix) the fees and expenses of the Company’s accountants and the fees and expenses of counsel (including local and special counsel) for the Company and the Selling Stockholder; and
(x) all other costs and expenses incident to the performance by the Company and the Selling Stockholder of their respective obligations hereunder. The Company shall not, however, except as otherwise set forth in Section 7 or 8 hereof, be
required to pay for any of the Underwriters’ expenses (other than those related to qualification under FINRA regulation and state securities or Blue Sky laws described above).
(k) The Company agrees that, unless it has or shall have obtained the prior written consent of the Representatives, and each
Underwriter, severally and not jointly, agrees with the Company that, unless it has or shall have obtained, as the case may be, the prior written consent of the Company, it has not made and will not make any offer relating to the Securities that
would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405) required to be filed by the Company with the Commission or retained by the Company under Rule 433;
provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Free Writing Prospectuses included in Schedule II hereto and any electronic road show. Any such free writing prospectus consented to
by the Representatives or the Company is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (x) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an
Issuer Free Writing Prospectus and (y) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the
Commission, legending and record keeping.
(l) The Company will notify promptly the Representatives if the Company ceases
to be an Emerging Growth Company at any time prior to the later of (a) completion of the distribution of the Securities within the meaning of the Securities Act and (b) completion of the 180-day restricted period referred to in
Section 5(g) hereof.
(ii) The Selling Stockholder agrees with the several Underwriters that:
(a) The Selling Stockholder will not take, directly or indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
17
(b) The Selling Stockholder will advise you promptly, and if requested by you,
will confirm such advice in writing, so long as delivery of a prospectus relating to the Securities by an underwriter or dealer may be required under the Act, of any change in information in the Registration Statement, the Prospectus any Preliminary
Prospectus or any Free Writing Prospectus or any amendment or supplement thereto relating to such Selling Stockholder or any new material information relating to the Company or relating to any matter stated in the Prospectus or any Free Writing
Prospectus which comes to the attention of the Selling Stockholder.
(c) The Selling Stockholder represents that it has not
prepared or had prepared on its behalf or used or referred to, and agrees that it will not prepare or have prepared on its behalf or use or refer to, any Free Writing Prospectus, and has not distributed and will not distribute any written materials
in connection with the offer or sale of the Securities.
6.
Conditions to the Obligations of the Underwriters.
The obligations of
the Underwriters to purchase the Underwritten Securities and the Option Securities, as the case may be, shall be subject to the accuracy of the representations and warranties on the part of the Company and the Selling Stockholder contained herein as
of the Execution Time, the Closing Date and any settlement date pursuant to Section 3 hereof, to the accuracy of the statements of the Company and the Selling Stockholder made in any opinions, certificates and letters pursuant to the provisions
hereof or required to be delivered pursuant to Section 3 hereof, to the performance by the Company and the Selling Stockholder of their respective obligations hereunder and to the following additional conditions as of the Closing Date and any
settlement date pursuant to Section 3 hereof:
(a) The Prospectus, and any supplement thereto, have been filed in the
manner and within the time period required by Rule 424(b); any material required to be filed by the Company pursuant to Rule 433(d) under the Act shall have been filed with the Commission within the applicable time periods prescribed for such
filings by Rule 433; and no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use shall have been issued and no proceedings for that purpose shall have been instituted or threatened.
(b) The Company shall have requested and caused Gibson, Dunn & Crutcher LLP, counsel for the Company, to have
furnished to the Representatives their opinion and letter, dated the Closing Date and addressed to the Representatives, in form and substance satisfactory to the Representatives.
(c) The Selling Stockholder shall have requested and caused Gibson, Dunn & Crutcher LLP, counsel for the Selling
Stockholder, to have furnished to the Representatives their opinion and letter, dated the Closing Date and addressed to the Representatives, in form and substance satisfactory to the Representatives.
(d) The General Counsel of the Company, shall have furnished to the Representatives his opinion letter, dated the Closing Date
and addressed to the Representatives, in form and substance satisfactory to the Representatives.
18
(e) The Representatives shall have received from Baker Botts L.L.P., counsel
for the Underwriters, such opinion or opinions, dated the Closing Date and addressed to the Representatives, with respect to the issuance and sale of the Securities, the Registration Statement, the Disclosure Package, the Prospectus (together with
any supplement thereto) and other related matters as the Representatives may reasonably require.
(f) The Company shall
have furnished to the Representatives a certificate of the Company, signed by the Chief Executive Officer and the Chief Financial Officer of the Company, dated the Closing Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Disclosure Package, the Prospectus and any amendment or supplement thereto, as well as each electronic road show used in connection with the offering of the Securities, and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are true and correct on and as of the Closing Date with
the same effect as if made on the Closing Date and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been
issued and no proceedings for that purpose have been instituted or, to the Company’s knowledge, threatened; and
(iii)
since the date of the most recent financial statements included in the Disclosure Package and the Prospectus (exclusive of any supplement thereto), there has been no Material Adverse Effect, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Disclosure Package and the Prospectus (exclusive of any supplement thereto).
(g) The Company shall have requested and caused Ernst & Young LLP to have furnished to the Representatives, at the
Execution Time and at the Closing Date, a letter, dated respectively as of the Execution Time and as of the Closing Date, containing such statements and information as is ordinarily included in accountants’ “comfort letters” to
underwriters with respect to the financial disclosure contained in the Registration Statement, the General Disclosure Package and the Prospectus, in form and substance satisfactory to the Representatives.
(h) Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of any amendment or supplement thereto), there shall not have been any change, or any development involving a prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Disclosure
19
Package and the Prospectus (exclusive of any supplement thereto) the effect of which is, in the sole judgment of the Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Registration Statement (exclusive of any amendment thereof), the Disclosure Package and the Prospectus (exclusive of any amendment or supplement thereto).
(i) Prior to the Closing Date, the Company and the Selling Stockholder shall have furnished to the Representatives such
further information, certificates and documents as the Representatives may reasonably request.
(j) Subsequent to the
Execution Time, there shall not have been any decrease in the rating of any of the Company’s debt securities by any “nationally recognized statistical rating organization” (as defined in Rule 3(a)(62) under the Securities Exchange Act
of 1934) or any notice given of any intended or potential decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change.
(k) The Securities shall have been listed and admitted and authorized for trading on the NYSE, and satisfactory evidence of
such actions shall have been provided to the Representatives.
(l) At the Execution Time, the Company shall have furnished
to the Representatives a letter substantially in the form of Exhibit A hereto from the Selling Stockholder and each officer and director of the Company named in the Registration Statement addressed to the Representatives.
If any of the conditions specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of
the opinions and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Representatives and counsel for the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the Representatives. Notice of such cancellation shall be given to the Company and the Selling Stockholder in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered at the office of Baker Botts L.L.P., counsel for the
Underwriters, at 2001 Ross Avenue, Suite 1100, Dallas, Texas 75201, on the Closing Date.
7.
Reimbursement of Underwriters’
Expenses.
If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Underwriters set forth in Section 6 hereof is not satisfied, because of any termination pursuant to
Section 10 hereof or because of any refusal, inability or failure on the part of the Company or the Selling Stockholder to perform any agreement herein or comply with any provision hereof other than due primarily to a default by any of the
Underwriters, the Company will reimburse the Underwriters severally through the Representatives on demand for all reasonable and documented out-of-pocket expenses (including reasonable and documented fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale of the Securities.
20
8.
Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the
Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the Registration Statement, or in any Preliminary Prospectus or the Prospectus, or any Issuer Free Writing Prospectus, or in any amendment thereof or supplement thereto,
(ii) with respect to the Registration Statement or in any amendment thereof the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or
(iii) with respect to any Preliminary Prospectus, or the Prospectus, or any Issuer Free Writing Prospectus, or in any amendment thereof or supplement thereto, the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances under which such statements were made, not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action;
provided
,
however
, that the Company will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representatives specifically for inclusion therein. This indemnity agreement will be in addition to any liability which the Company may otherwise have.
(b) The Selling Stockholder severally agrees to indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement and each Underwriter, the directors, officers, employees and agents of each Underwriter to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to
written information furnished to the Company by or on behalf of the Selling Stockholder specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any
Selling Stockholder may otherwise have.
(c) Each Underwriter severally and not jointly agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the Registration Statement, and each person who controls the Company within the meaning of either the Act or the Exchange Act, and the Selling Stockholder and each person
who controls the Selling Stockholder within the meaning of either the Act or the Exchange
21
Act, in each case, to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any Underwriter may
otherwise have. The Company and the Selling Stockholder acknowledge that the statements set forth (i) in the last paragraph of the cover page regarding delivery of the Securities and, under the third, ninth and tenth paragraphs under the
heading “Underwriting”, (ii) the list of Underwriters and their respective participation in the sale of the Securities, (iii) the sentences related to concessions and reallowances and (iv) the paragraph related to
stabilization, syndicate covering transactions and penalty bids in the Preliminary Prospectus and the Prospectus constitute the only information furnished in writing by or on behalf of the several Underwriters for inclusion in the Preliminary
Prospectus, the Prospectus or any Issuer Free Writing Prospectus.
(d) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, promptly notify the indemnifying party in writing of
the commencement thereof; but the failure to so notify the indemnifying party (i) will not relieve it from liability under paragraph (a), (b) or (c) above unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a), (b) or (c) above. The indemnifying party shall be entitled to appoint counsel (including local counsel) of the indemnifying party’s choice at the indemnifying party’s expense to
represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or
parties except as set forth below);
provided
,
however
, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the indemnified
party shall have reasonably concluded that the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of,
any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of
the institution of such action or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim,
22
action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a), (b), (c), (d) or (e) of this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company, the Selling Stockholder and the Underwriters severally agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or defending the same) (collectively “Losses”) to which the Company, the Selling Stockholder and one or more of the Underwriters or, with respect to subsection
(f) below, the Independent Underwriter, as applicable, may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company, by the Selling Stockholder and by the Underwriters or, with respect to
subsection (f) below, the Independent Underwriter, as applicable, from the offering of the Securities;
provided
,
however
, that in no case shall any Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in excess of the underwriting discount or commission applicable to the Securities purchased by such Underwriter hereunder or (ii) the Independent Underwriter solely in
its capacity as “qualified independent underwriter” (within the meaning of Rule 5121) be responsible for any amount in excess of the compensation received by the Independent Underwriter for acting in such capacity. If the allocation
provided by the immediately preceding sentence is unavailable for any reason, the Company, the Selling Stockholder and the Underwriters severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company, of the Selling Stockholder and of the Underwriters or, with respect to subsection (f) below, the Independent Underwriter, as applicable, in connection with the statements or omissions which resulted in
such Losses as well as any other relevant equitable considerations. Benefits received by the Company and by the Selling Stockholder, as applicable, shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses)
received by such party, and benefits received by the Underwriters shall be deemed to be equal to the total underwriting discounts and commissions, in each case as set forth on the cover page of the Prospectus. Benefits received by the Independent
Underwriter solely in its capacity as “qualified independent underwriter” shall be deemed to be equal to the compensation received by the Independent Underwriter for acting in such capacity. Relative fault shall be determined by reference
to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Company, the Selling Stockholder or the Underwriters
or, with respect to subsection (f) below, the Independent Underwriter, as applicable, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The
Company, the Selling Stockholder and the Underwriters and, with respect to subsection (f), the Independent Underwriter, as applicable, agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not
23
take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (e), no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person who controls an Underwriter within the meaning of either the
Act or the Exchange Act and each director, officer, employee and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person who controls the Company or the Selling Stockholder within the meaning of either
the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company or the Selling Stockholder, as applicable, subject
in each case to the applicable terms and conditions of this paragraph (e).
(f) Without limitation of and in addition
to its obligations under the other paragraphs of this Section 8, the Company agrees to indemnify and hold harmless the Independent Underwriter, its directors, officers, employees and agents and each person who controls Independent Underwriter
within the meaning of either the Act or the Securities Exchange Act of 1934 against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject, insofar as such losses, claims, damages or
liabilities (or action in respect thereof) arise out of or are based upon the Independent Underwriter’s acting as a “qualified independent underwriter” (within the meaning of FINRA Rule 5121) in connection with the offering
contemplated by this Agreement, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or
action;
provided
,
however
, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability results from the gross negligence or willful misconduct of the Independent Underwriter.
(g) The Company and the Selling Stockholder may agree, as among themselves and without limiting the rights of the Underwriters
under this Agreement, as to the respective amounts of such liability for which they each shall be responsible.
9.
Default by an
Underwriter.
If any one or more Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance
of its or their obligations under this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions which the amount of Securities set forth opposite their names in Schedule I hereto
bears to the aggregate amount of Securities set forth opposite the names of all the remaining Underwriters) the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase;
provided
,
however
, that in the
event that the aggregate amount of Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate amount of Securities set forth in Schedule I hereto, the remaining Underwriters shall
have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if, within 3 days of such default, such nondefaulting Underwriters do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter, the Selling Stockholder or the
24
Company. In the event of a default by any Underwriter as set forth in this Section 9, the Closing Date shall be postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the Registration Statement and the Prospectus or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting
Underwriter of its liability, if any, to the Company, the Selling Stockholder and any nondefaulting Underwriter for damages occasioned by its default hereunder.
10.
Termination.
This Agreement shall be subject to termination in the absolute discretion of the Representatives, by notice given to
the Company prior to delivery of and payment for the Securities, if at any time prior to such delivery and payment (i) trading in the Company’s Common Stock shall have been suspended by the Commission or the NYSE or trading in securities
generally on the NYSE shall have been suspended or limited or minimum prices shall have been established on such exchange, (ii) a banking moratorium shall have been declared either by Federal or New York State authorities or (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Preliminary Prospectus or the Prospectus (exclusive of any supplement thereto).
11.
Representations and Indemnities to Survive.
The respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers, of the Selling Stockholder and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any
Underwriter, the Selling Stockholder or the Company or any of the officers, directors, employees, agents or controlling persons referred to in Section 8 hereof, and will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this Agreement.
12.
Notices.
All communications
hereunder will be in writing and effective only on receipt, and, if sent to the Representatives, will be mailed, delivered or telefaxed to Citigroup Global Markets Inc. General Counsel (fax no.:
(212) 816-7912) and
confirmed to the General Counsel, Citigroup Global Markets Inc., at 388 Greenwich Street, New York, New York, 10013, Attention: General Counsel and Credit Suisse Securities (USA)
LLC, Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: LCD-IBD; or, if sent to the Company, will be mailed, delivered or telefaxed to Continental Building Products, Inc., fax no. (703) 796-9516, and confirmed to it at Continental
Building Products, Inc., 12018 Sunrise Valley Drive, Suite 600, Reston, VA 20191, attention of the Legal Department; or if sent to the Selling Stockholder, will be mailed, delivered or telefaxed and confirmed to it at Hudson Americas LLC, 2711 N.
Haskell Avenue, Suite 1800, Dallas, Texas 75204, Attention: Legal Department, fax no. (214) 515-6924.
13.
Successors.
This
Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors, employees, agents and controlling persons referred to in Section 8 hereof, and no other person will have
any right or obligation hereunder.
25
14.
No fiduciary duty.
The Company and the Selling Stockholder hereby acknowledge that
(a) the purchase and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Company and the Selling Stockholder, on the one hand, and the Underwriters and any affiliate through which it may
be acting, on the other, (b) the Underwriters are acting as principal and not as an agent or fiduciary of the Company or the Selling Stockholder and (c) the Company’s engagement of the Underwriters in connection with the offering and
the process leading up to the offering is as independent contractors and not in any other capacity. Furthermore, the Company and the Selling Stockholder agree that they are solely responsible for making their own respective judgments in connection
with the offering (irrespective of whether any of the Underwriters has advised or is currently advising the Company or the Selling Stockholder on related or other matters). The Company and the Selling Stockholder agree that they will not claim that
the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company or the Selling Stockholder, in connection with such transaction or the process leading thereto.
15.
Integration.
This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company, the
Selling Stockholder and the Underwriters, or any of them, with respect to the subject matter hereof.
16.
Applicable Law.
This
Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York.
17.
Waiver of Jury Trial.
The Company and the Selling Stockholder hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
18.
Counterparts.
This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
19.
Headings.
The section headings used herein are for convenience only and
shall not affect the construction hereof.
20.
Definitions.
The terms that follow, when used in this Agreement, shall have the
meanings indicated.
“Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission
promulgated thereunder.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on
which banking institutions or trust companies are authorized or obligated by law to close in New York City.
“Commission” shall
mean the Securities and Exchange Commission.
26
“Disclosure Package” shall mean (i) the Preliminary Prospectus that is distributed
to investors and used to offer the Securities, (ii) the Issuer Free Writing Prospectuses, if any, identified in Schedule II hereto, and (iii) any other Free Writing Prospectus that the parties hereto shall hereafter expressly agree in
writing to treat as part of the Disclosure Package.
“Effective Date” shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule 462(b) Registration Statement became or becomes effective.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder.
“Execution Time” shall mean the date and time that this Agreement is executed and delivered by the
parties hereto.
“Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405.
“Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus, as defined in Rule 433.
“Preliminary Prospectus” shall mean any preliminary prospectus referred to in paragraph 1(a) above and any preliminary
prospectus included in the Registration Statement at the Effective Date that omits Rule 430A Information.
“Prospectus”
shall mean the prospectus relating to the Securities that is first filed pursuant to Rule 424(b) after the Execution Time.
“Registration Statement” shall mean the registration statement referred to in paragraph 1(a) above, including exhibits and financial
statements and any prospectus supplement relating to the Securities that is filed with the Commission pursuant to Rule 424(b) and deemed part of such registration statement pursuant to Rule 430A, as amended at the Execution Time and, in the event
any post-effective amendment thereto or any Rule 462(b) Registration Statement becomes effective prior to the Closing Date, shall also mean such registration statement as so amended or such Rule 462(b) Registration Statement, as the case may be.
“Rule 158”, “Rule 163”, “Rule 164”, “Rule 172”, “Rule 405”, “Rule 415”,
“Rule 424”, “Rule 430A” and “Rule 433” refer to such rules under the Act.
“Rule 430A
Information” shall mean information with respect to the Securities and the offering thereof permitted to be omitted from the Registration Statement when it becomes effective pursuant to Rule 430A.
“Rule 462(b) Registration Statement” shall mean a registration statement and any amendments thereto filed pursuant to
Rule 462(b) relating to the offering covered by the registration statement referred to in Section 1(a) hereof
27
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company, the Selling Stockholder and the several Underwriters.
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Very truly yours,
|
|
|
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Continental Building Products, Inc.
|
|
|
|
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By:
|
|
|
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Name:
|
|
Title:
|
|
|
|
|
|
|
|
|
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LSF8 Gypsum Holdings, L.P.
|
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By:
|
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LSF8 GenPar, LLC, its general partner
|
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By:
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|
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Name:
|
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|
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Title:
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28
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA)
LLC
|
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|
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By:
|
|
Citigroup Global Markets Inc.
|
|
|
|
|
By:
|
|
|
|
|
|
Name:
|
|
|
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Title:
|
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By:
|
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Credit Suisse Securities (USA) LLC
|
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By:
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Name:
|
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Title:
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For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
29
SCHEDULE I
|
|
|
|
|
Underwriters
|
|
Number of Underwritten Securities
to be Purchased
|
|
Citigroup Global Markets Inc.
|
|
[•]
|
|
Credit Suisse Securities (USA) LLC
|
|
[•]
|
|
Barclays Capital Inc.
|
|
[•]
|
|
Deutsche Bank Securities Inc.
|
|
[•]
|
|
RBC Capital Markets, LLC
|
|
[•]
|
|
Zelman Partners LLC
|
|
[•]
|
|
SunTrust Robinson Humphrey, Inc.
|
|
[•]
|
|
Stephens Inc.
|
|
[•]
|
|
BB&T Capital Markets, a division of BB&T Securities, LLC
|
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[•]
|
|
|
|
|
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Total
|
|
[13,236,000]
|
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SCHEDULE II
Schedule of Free Writing Prospectuses included in the Disclosure Package
[ ]
2
ANNEX A
Subsidiaries of Continental Building Products, Inc.
Continental Building Products Operating Company, LLC
Continental
Buchanan, LLC
Continental Palatka, LLC
Continental Silver
Grove, LLC
Continental Building Products Canada, Inc.
3
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[Form of Lock-Up Agreement]
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EXHIBIT A
|
[Letterhead of officer, director or major shareholder]
Continental Building Products, Inc.
Public Offering of Common Stock
, 2014
Citigroup Global Markets Inc.
Credit Suisse Securities (USA)
LLC
As Representatives of the several Underwriters,
c/o
Citigroup Global Markets Inc.
388 Greenwich Street
New
York, New York 10013
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed Underwriting Agreement (the “Underwriting Agreement”), between
Continental Building Products, Inc., a Delaware corporation (the “Company”), and each of you as representatives of a group of Underwriters named therein, relating to an underwritten public offering of Common Stock, $0.001 par value (the
“Common Stock”), of the Company (the “Offering”).
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written consent of Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC, offer, sell, contract to sell, pledge or otherwise dispose of, (or enter into any
transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any affiliate of the
undersigned or any person in privity with the undersigned or any affiliate of the undersigned), directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Securities and Exchange Commission in
respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any shares of capital stock of the Company or any securities convertible into, or exercisable or exchangeable for such capital stock, or publicly announce an intention to
effect any such transaction, for a period from the date hereof until 180 days after the date of the Underwriting Agreement (the “Lock-Up Period”). Notwithstanding the foregoing, the undersigned may transfer any or all of the shares of
Common Stock or other Company securities if the transfer does not trigger any public filing or reporting requirement or obligation or result in any other voluntary or mandatory public disclosure, in each case of a reduction in beneficial ownership,
including but not limited to Form 4 of Section 16 of the Securities Exchange Act of 1934, as amended, (other than a filing on a Form 5, Schedule 13D, Schedule 13G or an amendment thereto made after the expiration of the Lock-Up Period) and is
(i) by gift, (ii) by will or intestacy, (iii) a disposition to any trust the beneficiaries of which are the undersigned and/or immediate family members of the undersigned,
or in the case of such a trust, to any beneficiaries of the trust, (iv) to an immediate family member of the undersigned or (v) a distribution to partners, members or shareholders of
the undersigned, or to any corporation, partnership or other entity that is an affiliate of the undersigned; provided, however, it shall be a condition to the transfer that the transferee of shares agrees in writing to be bound by the same
restrictions in place for the undersigned pursuant to this letter for the duration that such restrictions remain in effect at the time of transfer. If the undersigned is an officer or director of the Company, the undersigned further agrees that the
foregoing restrictions shall be equally applicable to any issuer-directed shares of Common Stock the undersigned may purchase in the Offering.
If the undersigned is an officer or director of the Company, (i) Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC
agrees that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of shares of Common Stock, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC
will notify the Company of the impending release or waiver, and (ii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two business days
before the effective date of the release or waiver. Any release or waiver granted by Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC hereunder to any such officer or director shall only be effective two business days after the
publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer not for consideration and (b) the transferee has agreed in writing to be bound by
the same terms described in this letter to the extent and for the duration that such terms remain in effect at the time of the transfer.
If for any reason the Underwriting Agreement shall be terminated prior to the Closing Date (as defined in the Underwriting Agreement), the
agreement set forth above shall likewise be terminated. Notwithstanding anything herein to the contrary, if the Closing Date has not occurred prior to April 30, 2014, this letter shall be of no further force or effect.
Yours very truly,
[Signature of officer, director or major stockholder]
[Name and address of officer, director or major stockholder]
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[Form of Press Release]
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EXHIBIT B
|
Continental Building Products, Inc.
[Date]
Continental Building Products, Inc. (the
“Company”) announced today that Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC, the lead book-running managers in the Company’s recent public sale of shares of
common stock, are [waiving] [releasing] a lock-up restriction with respect to shares of the Company’s common stock held by [certain officers or directors] [an officer or director] of the Company.
The [waiver] [release] will take effect on , 20 , and the shares may be sold on or after such date.
This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such
securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.
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[Form of Waiver of Lock-up]
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ADDENDUM
|
[Letterhead]
Continental Building Products, Inc.
Public Offering of Common Stock
, 20
[Name and Address of
Officer or Director
Requesting Waiver]
Dear Mr./Ms. [Name]:
This letter is being delivered to you in connection with the offering by Continental Building Products, Inc. (the “Company”) of
shares of common stock, $0.001 par value (the “Common Stock”), of the Company and the lock-up letter dated , 2014 (the
“Lock-up Letter”), executed by you in connection with such offering, and your request for a [waiver] [release] dated , 20 , with respect to
shares of Common Stock (the “Shares”).
Citigroup Global Markets Inc. and
Credit Suisse Securities (USA) LLC hereby agree to [waive] [release] the transfer restrictions set forth in the Lock-up Letter, but only with respect to the Shares, effective ,
20 ;
provided
,
however
, that such [waiver] [release] is conditioned on the Company announcing the impending [waiver] [release] by press release through a major news service at least two business days before
effectiveness of such [waiver] [release]. This letter will serve as notice to the Company of the impending [waiver] [release].
Except as
expressly [waived] [released] hereby, the Lock-up Letter shall remain in full force and effect.
Yours very truly,
[Signatures of Representatives]
[Name and title of Representatives]
Exhibit 10.8
CONTINENTAL BUILDING PRODUCTS, INC.
2014 STOCK INCENTIVE PLAN
CONTINENTAL BUILDING PRODUCTS, INC.
2014 STOCK INCENTIVE PLAN
The purpose of the Continental Building Products, Inc. 2014 Stock Incentive Plan (the
“Plan”) is to promote and closely align the interests of employees, non-employee directors, consultants and advisors of Continental Building Products, Inc. (the “Company”) and its stockholders by providing stock-based
compensation and other performance-based compensation. The objectives of the Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Participants and to optimize the
profitability and growth of the Company through incentives that are consistent with the Company’s goals and that link the personal interests of Participants to those of the Company’s stockholders.
The Plan provides for the grant of Options, Stock Appreciation Rights, Restricted Stock Units and Restricted Stock, any of which may be performance-based, and
for Incentive Bonuses, which may be paid in cash or stock or a combination thereof, as determined by the Committee.
As used in the Plan, the following terms shall have the meanings set forth below:
(a) “Affiliate” means any entity in which the Company has a substantial direct or indirect equity interest, as determined by the Committee from time
to time.
(b) “Act” means the Securities Exchange Act of 1934, as amended, or any successor thereto.
(c) “Award” means an Option, Stock Appreciation Right, Restricted Stock Unit, Restricted Stock or Incentive Bonus granted to a Participant pursuant
to the provisions of the Plan, any of which may be subject to performance conditions.
(d) “Award Agreement” means a written or electronic
agreement or other instrument as may be approved from time to time by the Committee and designated as such implementing the grant of each Award. An Award Agreement may be in the form of an agreement to be executed by both the Participant and the
Company (or an authorized representative of the Company) or certificates, notices or similar instruments as approved by the Committee and designated as such.
(e) “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Act.
(f) “Board” means the board of directors of the Company.
(g) “Cause” means a Participant’s Termination of Employment by the Company or an Affiliate by reason of the Participant’s
(i) material breach of his obligations under any agreement, including any employment agreement, that he has entered into with the Company or an Affiliate; (ii) intentional misconduct as an officer, employee, director, consultant or advisor
of the Company or a material violation by the Participant of written
1
policies of the Company; (iii) material breach of any fiduciary duty which the Participant owes to the Company; (iv) commission by the Participant of (A) a felony or
(B) fraud, embezzlement, dishonesty, or a crime involving moral turpitude; (v) the habitual use of illicit drugs or other illicit substances or the addiction to licit drugs or other substances; or (vi) unexplained absence from work or
service for more than ten (10) days in any twelve (12) month period (vacation, reasonable personal leave, reasonable sick leave and disability excepted). A Participant’s employment or service will be deemed to have been terminated for
Cause if it is determined subsequent to his or her termination of employment or service that grounds for termination of his or her employment or service for Cause existed at the time of his or her termination of employment or service.
(h) “Change in Control” means the occurrence of any one of the following:
(1) any Person, other than LSF8 Gypsum Holdings, L.P. or its Affiliates, is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially owned by such Person or any securities acquired directly from the Company or its Affiliates) representing 35% or more of the combined voting power of the Company’s then
outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (A) of paragraph 3 below; or
(2) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the
Effective Date (as defined below), constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least a majority of the
directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or
(3) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other
corporation, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or
consolidation; or
(4) the implementation of a plan of complete liquidation or dissolution of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to (A) an entity, at least
50% of the combined voting power of the voting securities of which is owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale, or (B) LSF8 Gypsum Holdings, L.P.
or its Affiliates.
2
(i) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rulings and
regulations issues thereunder.
(j) “Committee” means the Compensation Committee of the Board (or any successor committee), or such other
committee as designated by the Board to administer the Plan under Section 6.
(k) “Common Stock” means the common stock of the Company, par
value $0.001 a share, or such other class or kind of shares or other securities as may be applicable under Section 15.
(l) “Company” means
Continental Building Products, Inc., a Delaware corporation, and except as utilized in the definition of Change in Control, any successor corporation.
(m) “Dividend Equivalents” mean an amount payable in cash or Common Stock, as determined by the Committee, with respect to a Restricted Stock Unit
Award equal to what would have been received if the shares underlying the Award had been owned by the Participant.
(n) “Effective Date” means
the date on which the Plan takes effect, as defined pursuant to Section 4 of the Plan.
(o) “Eligible Person” any employee or non-employee
director the Company or any of its Subsidiaries; provided however that Incentive Stock Options may only be granted to employees.
(p) “Fair Market
Value” means as of any date, the value of the Common Stock determined as follows: (i) if the Common Stock is listed on any established stock exchange, system or market, its Fair Market Value shall be the closing price for the Common Stock
as quoted on such exchange, system or market as reported in the Wall Street Journal or such other source as the Committee deems reliable; and (ii) in the absence of an established market for the Common Stock, the Fair Market Value thereof shall
be determined in good faith by the Committee by the reasonable application of a reasonable valuation method, taking into account factors consistent with Treas. Reg. § 409A-1(b)(5)(iv)(B) as the Committee deems appropriate.
(q) “Incentive Bonus” means a bonus opportunity awarded under Section 11 pursuant to which a Participant may become entitled to receive an
amount based on satisfaction of such performance criteria established for a specified performance period as specified in the Award Agreement.
(r)
“Incentive Stock Option” means a stock option that is designated as potentially eligible to qualify as an “incentive stock option” within the meaning of Section 422 of the Code.
(s) “Nonqualified Stock Option” means a stock option that is not intended to qualify as an “incentive stock option” within the meaning of
Section 422 of the Code.
(t) “Option” means a right to purchase a number of shares of Common Stock at such exercise price, at such times
and on such other terms and conditions as are specified in or determined pursuant to an Award Agreement. Options granted pursuant to the Plan may be Incentive Stock Options or Nonqualified Stock Options.
3
(u) “Participant” means any individual described in Section 3 to whom Awards have been granted
from time to time by the Committee and any authorized transferee of such individual.
(v) “Person” shall have the meaning given in
Section 3(a)(9) of the Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its Affiliates, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of the Company.
(w) “Plan” means the Continental Building Products,
Inc. 2014 Stock Incentive Plan as set forth herein and as amended from time to time.
(x) “Restricted Stock” means an Award or issuance of
Common Stock the grant, issuance, retention, vesting and/or transferability of which is subject during specified periods of time to such conditions (including continued employment or performance conditions) and terms as the Committee deems
appropriate.
(y) “Restricted Stock Unit” means an Award denominated in units of Common Stock under which the issuance of shares of Common Stock
(or cash payment in lieu thereof) is subject to such conditions (including continued employment or performance conditions) and terms as the Committee deems appropriate.
(z) “Separation from Service” or “Separates from Service” means the termination of Participant’s employment with the Company and all
Subsidiaries that constitutes a “separation from service” within the meaning of Section 409A of the Code.
(aa) “Stock Appreciation
Right” means a right granted that entitles the Participant to receive, in cash or Common Stock or a combination thereof, as determined by the Committee, value equal to the excess of (i) the Fair Market Value of a specified number of shares
of Common Stock at the time of exercise over (ii) the exercise price of the right, as established by the Committee on the date of grant.
(bb)
“Subsidiary” means any business association (including a corporation or a partnership, other than the Company) in an unbroken chain of such associations beginning with the Company if each of the associations other than the last association
in the unbroken chain owns equity interests (including stock or partnership interests) possessing 50% or more of the total combined voting power of all classes of equity interests in one of the other associations in such chain.
(cc) “Substitute Awards” means Awards granted or Common Stock issued by the Company in assumption of, or in substitution or exchange for, awards
previously granted, or the right or obligation to make future awards, by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.
4
(dd) “Termination of Employment” means ceasing to serve as an employee of the Company and its
Subsidiaries or, with respect to a non-employee director or other service provider, ceasing to serve as such for the Company, except that with respect to all or any Awards held by a Participant (i) the Committee may determine that a leave of
absence or employment on a less than full-time basis is considered a “Termination of Employment,” (ii) the Committee may determine that a transition of employment to service with a partnership, joint venture or corporation not meeting
the requirements of a Subsidiary in which the Company or a Subsidiary is a party is not considered a “Termination of Employment,” (iii) service as a member of the Board shall constitute continued employment with respect to Awards
granted to a Participant while he or she served as an employee and (iv) service as an employee of the Company or a Subsidiary shall constitute continued employment with respect to Awards granted to a Participant while he or she served as a
member of the Board or other service provider. The Committee shall determine whether any corporate transaction, such as a sale or spin-off of a division or subsidiary that employs a Participant, shall be deemed to result in a Termination of
Employment with the Company and its Subsidiaries for purposes of any affected Participant’s Awards, and the Committee’s decision shall be final and binding.
Any Eligible Person is eligible to receive an Award.
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4.
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Effective Date and Termination of Plan
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This Plan became effective on
, 2014 (the “Effective Date”). The Plan shall remain available for the grant of Awards until the tenth (10th) anniversary of the Effective Date. Notwithstanding
the foregoing, the Plan may be terminated at such earlier time as the Board may determine. Termination of the Plan will not affect the rights and obligations of the Participants and the Company arising under Awards theretofore granted.
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5.
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Shares Subject to the Plan and to Awards
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(a)
Aggregate Limits
. The aggregate
number of shares of Common Stock issuable under the Plan shall be equal to One Million Six Hundred Fifteen Thousand Two Hundred (1,615,200). The aggregate number of shares of Common Stock available for grant under this Plan and the number of shares
of Common Stock subject to Awards outstanding at the time of any event described in Section 15 shall be subject to adjustment as provided in Section 15. The shares of Common Stock issued pursuant to Awards granted under this Plan may be
shares that are authorized and unissued or shares that were reacquired by the Company, including shares purchased in the open market.
(b)
Issuance of
Shares
. For purposes of Section 5(a), the aggregate number of shares of Common Stock issued under this Plan at any time shall equal only the number of shares of Common Stock actually issued upon exercise or settlement of an Award, and
shares of Common Stock subject to Awards that have been canceled, expired, forfeited or otherwise not issued under an Award and shares of Common Stock subject to Awards
5
settled in cash shall not count as shares of Common Stock issued under this Plan. The aggregate number of shares available for issuance under this Plan at any time shall not be reduced by
(i) shares subject to Awards that have been terminated, expired unexercised, forfeited or settled in cash, (ii) shares subject to Awards that have been retained or withheld by the Company in payment or satisfaction of the exercise price,
purchase price or tax withholding obligation of an Award, or (iii) shares subject to Awards that otherwise do not result in the issuance of shares in connection with payment or settlement thereof. In addition, shares that have been delivered
(either actually or by attestation) to the Company in payment or satisfaction of the exercise price, purchase price or tax withholding obligation of an Award shall be available for issuance under this Plan.
(c)
Tax Code Limits
. The aggregate number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options granted
under this Plan shall be equal to One Million Six Hundred Fifteen Thousand Two Hundred (1,615,200), which number shall be calculated and adjusted pursuant to Section 15 only to the extent that such calculation or adjustment will not affect the
status of any option intended to qualify as an Incentive Stock Option under Section 422 of the Code.
(d)
Substitute Awards
. Substitute Awards
shall not reduce the shares of Common Stock authorized for issuance under the Plan or authorized for grant to a Participant in any calendar year. Additionally, in the event that a company acquired by the Company or any Subsidiary, or with which the
Company or any Subsidiary combines, has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such
pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of
the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the shares of Common Stock authorized for issuance under the Plan; provided that Awards using such available shares shall not be made
after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were employees of such acquired or combined company before such
acquisition or combination.
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6.
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Administration of the Plan
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(a)
Administrator of the Plan
. The Plan shall be
administered by the Committee. The Board shall fill vacancies on, and from time to time may remove or add members to, the Committee. The Committee shall act pursuant to a majority vote or unanimous written consent. Any power of the Committee may
also be exercised by the Board, except to the extent that the grant or exercise of such authority would cause any Award or transaction to become subject to (or lose an exemption under) the short-swing profit recovery provisions of
Section 16 of the Securities Exchange Act of 1934 or cause an Award intended to qualify as performance-based compensation under Section 162(m) of the Code not to qualify for such treatment. To the extent that any permitted action taken by
the Board conflicts with action taken by the Committee, the Board action shall
6
control. To the maximum extent permissible under applicable law, the Committee (or any successor) may by resolution delegate any or all of its authority to one or more subcommittees composed of
one or more directors and/or officers, and any such subcommittee shall be treated as the Committee for all purposes under this Plan. Notwithstanding the foregoing, if the Board or the Committee (or any successor) delegates to a subcommittee
comprised of one or more officers of the Company (who are not also directors) the authority to grant Awards, the resolution so authorizing such subcommittee shall specify the total number of shares of Common Stock such subcommittee may award
pursuant to such delegated authority, and no such subcommittee shall designate any officer serving thereon or any executive officer or non-employee director of the Company as a recipient of any Awards granted under such delegated authority. The
Committee hereby delegates to and designates the senior human resources officer of the Company (or such other officer with similar authority), and to his or her delegates or designees, the authority to assist the Committee in the day-to-day
administration of the Plan and of Awards granted under the Plan, including without limitation those powers set forth in Section 6(b)(4) through (9) and to execute agreements evidencing Awards made under this Plan or other documents entered
into under this Plan on behalf of the Committee or the Company. The Committee may further designate and delegate to one or more additional officers or employees of the Company or any subsidiary, and/or one or more agents, authority to assist the
Committee in any or all aspects of the day-to-day administration of the Plan and/or of Awards granted under the Plan.
(b)
Powers of Committee
.
Subject to the express provisions of this Plan, the Committee shall be authorized and empowered to do all things that it determines to be necessary or appropriate in connection with the administration of this Plan, including, without limitation:
(1) to prescribe, amend and rescind rules and regulations relating to this Plan and to define terms not otherwise defined herein;
(2) to determine which persons are Eligible Persons, to which of such Eligible Persons, if any, Awards shall be granted hereunder and the
timing of any such Awards;
(3) to prescribe and amend the terms of the Award Agreements, to grant Awards and determine the terms and
conditions thereof;
(4) to establish and verify the extent of satisfaction of any performance goals or other conditions applicable to the
grant, issuance, retention, vesting, exercisability or settlement of any Award;
(5) to prescribe and amend the terms of or form of any
document or notice required to be delivered to the Company by Participants under this Plan;
(6) to determine the extent to which
adjustments are required pursuant to Section 15;
(7) to interpret and construe this Plan, any rules and regulations under this Plan
and the terms and conditions of any Award granted hereunder, and to make exceptions to any such provisions if the Committee, in good faith, determines that it is appropriate to do so;
7
(8) to approve corrections in the documentation or administration of any Award; and
(9) to make all other determinations deemed necessary or advisable for the administration of this Plan.
Notwithstanding anything in this Plan to the contrary, with respect to any Award that is “deferred compensation” under Section 409A of the
Code, the Committee shall exercise its discretion in a manner that causes such Awards to be compliant with or exempt from the requirements of such Code section. Without limiting the foregoing, unless expressly agreed to in writing by the Participant
holding such Award, the Committee shall not take any action with respect to any Award which constitutes (i) a modification of a stock right within the meaning of Treas. Reg. Section 1.409A-1(b)(5)(v)(B) so as to constitute the grant of a
new stock right, (ii) an extension of a stock right, including the addition of a feature for the deferral of compensation within the meaning of Treas. Reg. Section 1.409A-1(b)(5)(v)(C), or (iii) an impermissible acceleration of a
payment date or a subsequent deferral of a stock right subject to Section 409A of the Code within the meaning of Treas. Reg. Section 1.409A-1(b)(5)(v)(E).
The Committee may, in its sole and absolute discretion, without amendment to the Plan but subject to the limitations otherwise set forth in Section 19,
waive or amend the operation of Plan provisions respecting exercise after termination of employment or service to the Company or an Affiliate. The Committee or any member thereof may, in its sole and absolute discretion and, except as otherwise
provided in Section 19, waive, settle or adjust any of the terms of any Award so as to avoid unanticipated consequences or address unanticipated events (including any temporary closure of an applicable stock exchange, disruption of
communications or natural catastrophe).
(c)
Determinations by the Committee
. All decisions, determinations and interpretations by the Committee
regarding the Plan, any rules and regulations under the Plan and the terms and conditions of or operation of any Award granted hereunder, shall be final and binding on all Participants, beneficiaries, heirs, assigns or other persons holding or
claiming rights under the Plan or any Award. The Committee shall consider such factors as it deems relevant, in its sole and absolute discretion, to making such decisions, determinations and interpretations including, without limitation, the
recommendations or advice of any officer or other employee of the Company and such attorneys, consultants and accountants as it may select. Members of the Board and members of the Committee acting under the Plan shall be fully protected in relying
in good faith upon the advice of counsel and shall incur no liability except for gross negligence or willful misconduct in the performance of their duties.
(d)
Subsidiary Awards
. In the case of a grant of an Award to any Participant employed by a Subsidiary, such grant may, if the Committee so directs, be
implemented by the Company issuing any subject shares of Common Stock to the Subsidiary, for such lawful consideration as the Committee may determine, upon the condition or understanding that the Subsidiary will transfer the shares of Common Stock
to the
8
Participant in accordance with the terms of the Award specified by the Committee pursuant to the provisions of the Plan. Notwithstanding any other provision hereof, such Award may be issued by
and in the name of the Subsidiary and shall be deemed granted on such date as the Committee shall determine.
(a)
Terms Set Forth in Award Agreement
. Awards may be granted at any time and from
time to time prior to the termination of the Plan to Eligible Persons as determined by the Committee. The terms and conditions of each Award shall be set forth in an Award Agreement in a form approved by the Committee for such Award, which Award
Agreement may contain such terms and conditions as specified from time to time by the Committee, provided such terms and conditions do not conflict with the Plan. The Award Agreement for any Award (other than Restricted Stock awards) shall include
the time or times at or within which and the consideration, if any, for which any shares of Common Stock may be acquired from the Company. The terms of Awards may vary among Participants, and the Plan does not impose upon the Committee any
requirement to make Awards subject to uniform terms. Accordingly, the terms of individual Award Agreements may vary.
(b)
Separation from Service
.
Subject to the express provisions of the Plan, the Committee shall specify before, at, or after the time of grant of an Award the provisions governing the effect(s) upon an Award of a Participant’s Separation from Service.
(c)
Rights of a Stockholder
. A Participant shall have no rights as a stockholder with respect to shares of Common Stock covered by an Award (including
voting rights) until the date the Participant becomes the holder of record of such shares of Common Stock. No adjustment shall be made for dividends or other rights for which the record date is prior to such date, except as provided in
Section 10(b) or Section 15 of this Plan or as otherwise provided by the Committee.
(a)
Grant, Term and Price
. The grant, issuance, retention, vesting
and/or settlement of any Option shall occur at such time and be subject to such terms and conditions as determined by the Committee or under criteria established by the Committee, which may include conditions based on continued employment, passage
of time, attainment of age and/or service requirements, and/or satisfaction of performance conditions. The term of an Option shall in no event be greater than ten years; provided, however, the term of an Option (other than an Incentive Stock Option)
shall be automatically extended if, at the time of its scheduled expiration, the Participant holding such Option is prohibited by law or the Company’s insider trading policy from exercising the Option, which extension shall expire on the
thirtieth (30th) day following the date such prohibition no longer applies. The Committee will establish the price at which Common Stock may be purchased upon exercise of an Option, which, in no event will be less than the Fair Market Value of
such shares on the date of grant; provided, however, that the exercise price per share of Common Stock with respect to an Option that is granted as a Substitute Award may be less than the Fair Market Value of the shares of Common Stock on the date
such Option is granted if such exercise price is based on a
9
formula set forth in the terms of the options held by such optionees or in the terms of the agreement providing for such merger or other acquisition that satisfies the requirements of
(i) Section 409A of the Code, if such options held by such optionees are not intended to qualify as “incentive stock options” within the meaning of Section 422 of the Code, and (ii) Section 424(a) of the Code, if
such options held by such optionees are intended to qualify as “incentive stock options” within the meaning of Section 422 of the Code. The exercise price of any Option may be paid in cash or such other method as determined by the
Committee, including an irrevocable commitment by a broker to pay over such amount from a sale of the Shares issuable under an Option, the delivery of previously owned shares of Common Stock or withholding of shares of Common Stock deliverable upon
exercise.
(b)
No Repricing without Stockholder Approval
. Other than in connection with a change in the Company’s capitalization (as described
in Section 15), the Committee shall not, without stockholder approval, reduce the exercise price of a previously awarded Option and, at any time when the exercise price of a previously awarded Option is above the Fair Market Value of a share of
Common Stock, the Committee shall not, without stockholder approval, cancel and re-grant or exchange such Option for cash or a new Award with a lower (or no) exercise price.
(c)
No Reload Grants
. Options shall not be granted under the Plan in consideration for and shall not be conditioned upon the delivery of shares of
Common Stock to the Company in payment of the exercise price and/or tax withholding obligation under any other employee stock option.
(d)
Incentive
Stock Options
. Notwithstanding anything to the contrary in this Section 8, in the case of the grant of an Option intending to qualify as an Incentive Stock Option, if the Participant owns stock possessing more than 10 percent of the
combined voting power of all classes of stock of the Company (a “10% Stockholder”), the exercise price of such Option must be at least 110 percent of the Fair Market Value of the shares of Common Stock on the date of grant and the Option
must expire within a period of not more than five (5) years from the date of grant. Notwithstanding anything in this Section 8 to the contrary, options designated as Incentive Stock Options shall not be eligible for treatment under the
Code as Incentive Stock Options (and will be deemed to be Nonqualified Stock Options) to the extent that either (a) the aggregate Fair Market Value of shares of Common Stock (determined as of the time of grant) with respect to which
such Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Subsidiary) exceeds $100,000, taking Options into account in the order in which they were granted, or
(b) such Options otherwise remain exercisable but are not exercised within three (3) months (or such other period of time provided in Section 422 of the Code) of separation of service (as determined in accordance with
Section 3401(c) of the Code and the regulations promulgated thereunder).
(e)
No Stockholder Rights
. Participants shall have no voting
rights and will have no rights to receive dividends or Dividend Equivalents in respect of an Option or any shares of Common Stock subject to an Option until the Participant has become the holder of record of such shares.
10
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9.
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Stock Appreciation Rights
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(a)
General Terms
. The grant, issuance, retention, vesting and/or
settlement of any Stock Appreciation Right shall occur at such time and be subject to such terms and conditions as determined by the Committee or under criteria established by the Committee, which may include conditions based on continued
employment, passage of time, attainment of age and/or service requirements, and/or satisfaction of performance conditions. Stock Appreciation Rights may be granted to Participants from time to time either in tandem with or as a component of Options
granted under the Plan (“tandem SARs”) or not in conjunction with other Awards (“freestanding SARs”). Upon exercise of a tandem SAR as to some or all of the shares covered by the grant, the related Option shall be canceled
automatically to the extent of the number of shares covered by such exercise. Conversely, if the related Option is exercised as to some or all of the shares covered by the grant, the related tandem SAR, if any, shall be canceled automatically to the
extent of the number of shares covered by the Option exercise. Any Stock Appreciation Right granted in tandem with an Option may be granted at the same time such Option is granted or at any time thereafter before exercise or expiration of such
Option, provided that the Fair Market Value of Common Stock on the date of the SAR’s grant is not greater than the exercise price of the related Option. All freestanding SARs shall be granted subject to the same terms and conditions applicable
to Options as set forth in Section 8 and all tandem SARs shall have the same exercise price as the Option to which they relate. Subject to the provisions of Section 8 and the immediately preceding sentence, the Committee may impose such
other conditions or restrictions on any Stock Appreciation Right as it shall deem appropriate. Stock Appreciation Rights may be settled in Common Stock, cash, Restricted Stock or a combination thereof, as determined by the Committee and set forth in
the applicable Award Agreement.
(b)
No Repricing without Stockholder Approval
. Other than in connection with a change in the Company’s
capitalization (as described in Section 15), the Committee shall not, without stockholder approval, reduce the exercise price of a previously awarded Stock Appreciation Right and, at any time when the exercise price of a previously awarded
Stock Appreciation Right is above the Fair Market Value of a share of Common Stock, the Committee shall not, without stockholder approval, cancel and re-grant or exchange such Stock Appreciation Right for cash or a new Award with a lower (or no)
exercise price.
(c)
No Stockholder Rights
. Participants shall have no voting rights and will have no rights to receive dividends or Dividend
Equivalents in respect of an Award of Stock Appreciation Rights or any shares of Common Stock subject to an Award of Stock Appreciation Rights until the Participant has become the holder of record of such shares.
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10.
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Restricted Stock and Restricted Stock Units
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(a)
Vesting and Performance Criteria
. The grant,
issuance, retention, vesting and/or settlement of any Award of Restricted Stock or Restricted Stock Units shall occur at such time and be subject to such terms and conditions as determined by the Committee or under criteria established by the
Committee, which may include conditions based on continued employment, passage of time, attainment of age and/or service requirements, and /or satisfaction of performance conditions. In addition, the Committee shall have the
11
right to grant Restricted Stock or Restricted Stock Unit Awards as the form of payment for grants or rights earned or due under other stockholder-approved compensation plans or arrangements of
the Company.
(b)
Dividends and Distributions
. Participants in whose name Restricted Stock is granted shall be entitled to receive
all dividends and other distributions paid with respect to those shares of Common Stock, unless determined otherwise by the Committee. The Committee will determine whether any such dividends or distributions will be automatically reinvested in
additional shares of Restricted Stock and/or subject to the same restrictions on transferability as the Restricted Stock with respect to which they were distributed or whether such dividends or distributions will be paid in cash. Shares underlying
Restricted Stock Units shall be entitled to dividends or distributions only to the extent provided by the Committee. Notwithstanding anything herein to the contrary, in no event will dividends or Dividend Equivalents be paid during the performance
period with respect to unearned Awards of Restricted Stock or Restricted Stock Units that are subject to performance-based vesting criteria. Dividends or Dividend Equivalents accrued on such shares shall become payable no earlier than the date the
performance-based vesting criteria have been achieved and the underlying shares or Restricted Stock Units have been earned.
(a)
Performance Criteria
. The Committee shall establish the performance
criteria and level of achievement versus these criteria that shall determine the amount payable under an Incentive Bonus, which may include a target, threshold and/or maximum amount payable and any formula for determining such achievement, and which
criteria may be based on performance conditions.
(b)
Timing and Form of Payment
. The Committee shall determine the timing of payment of any
Incentive Bonus. Payment of the amount due under an Incentive Bonus may be made in cash or in Common Stock, as determined by the Committee.
(c)
Discretionary Adjustments
. Notwithstanding satisfaction of any performance goals and, the amount paid under an Incentive Bonus on account of either financial performance or personal performance evaluations may be adjusted by the Committee on
the basis of such further considerations as the Committee shall determine.
The Committee may, in an Award Agreement or otherwise, provide for the deferred
delivery of Common Stock or cash upon settlement, vesting or other events with respect to Restricted Stock Units, or in payment or satisfaction of an Incentive Bonus. Notwithstanding anything herein to the contrary, in no event will any election to
defer the delivery of Common Stock or any other payment with respect to any Award be allowed if the Committee determines, in its sole discretion, that the deferral would result in the imposition of the additional tax under
Section 409A(a)(1)(B) of the Code. No Award shall provide for deferral of compensation that does not comply with Section 409A of the
12
Code. The Company, the Board and the Committee shall have no liability to a Participant, or any other party, if an Award that is intended to be exempt from, or compliant with, Section 409A
of the Code is not so exempt or compliant or for any action taken by the Board or the Committee.
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14.
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Conditions and Restrictions Upon Securities Subject to Awards
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The Committee may provide that the Common
Stock issued upon exercise of an Option or Stock Appreciation Right or otherwise subject to or issued under an Award shall be subject to such further agreements, restrictions, conditions or limitations as the Committee in its discretion may specify
prior to the exercise of such Option or Stock Appreciation Right or the grant, vesting or settlement of such Award, including without limitation, conditions on vesting or transferability, forfeiture or repurchase provisions and method of payment for
the Common Stock issued upon exercise, vesting or settlement of such Award (including the actual or constructive surrender of Common Stock already owned by the Participant) or payment of taxes arising in connection with an Award. Without
limiting the foregoing, such restrictions may address the timing and manner of any resales by the Participant or other subsequent transfers by the Participant of any shares of Common Stock issued under an Award, including without limitation
(i) restrictions under an insider trading policy or pursuant to applicable law, (ii) restrictions designed to delay and/or coordinate the timing and manner of sales by the Participant and holders of other Company equity compensation
arrangements, (iii) restrictions as to the use of a specified brokerage firm for such resales or other transfers and (iv) provisions requiring Common Stock be sold on the open market or to the Company in order to satisfy tax withholding or
other obligations.
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15.
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Adjustment of and Changes in the Stock
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(a) The number and kind of shares of Common Stock available for
issuance under this Plan (including under any Awards then outstanding), and the number and kind of shares of Common Stock subject to the limits set forth in Section 5 of this Plan, shall be equitably adjusted by the Committee to reflect any
reorganization, reclassification, combination of shares, stock split, reverse stock split, spin-off, dividend or distribution of securities, property or cash (other than regular, quarterly cash dividends), or any other event or transaction that
affects the number or kind of shares of Common Stock outstanding. Such adjustment may be designed to comply with Section 424 of the Code or may be designed to treat the shares of Common Stock available under the Plan and subject to Awards as if
they were all outstanding on the record date for such event or transaction or to increase the number of such shares of Common Stock to reflect a deemed reinvestment in shares of Common Stock of the amount distributed to the Company’s
securityholders. The terms of any outstanding Award shall also be equitably adjusted by the Committee as to price, number or kind of shares of Common Stock subject to such Award, vesting, and other terms to reflect the foregoing events, which
adjustments need not be uniform as between different Awards or different types of Awards. No fractional shares of Common Stock shall be issued pursuant to such an adjustment.
(b) In the event there shall be any other change in the number or kind of outstanding shares of Common Stock, or any stock or other securities into which such
Common Stock
13
shall have been changed, or for which it shall have been exchanged, by reason of a Change in Control, other merger, consolidation or otherwise, then the Committee shall determine the appropriate
and equitable adjustment to be effected, which adjustments need not be uniform between different Awards or different types of Awards. In addition, in the event of such change described in this paragraph, the Committee may accelerate the time or
times at which any Award may be exercised, consistent with and as otherwise permitted under Section 409A of the Code, and may provide for cancellation of such accelerated Awards that are not exercised within a time prescribed by the Committee
in its sole discretion.
(c) Unless otherwise expressly provided in the Award Agreement or another contract, including an employment agreement, or under
the terms of a transaction constituting a Change in Control, the Committee may provide that any or all of the following shall occur upon a Participant’s Termination of Employment without Cause within twenty-four (24) months following a
Change in Control: (a) in the case of an Option or Stock Appreciation Right, the Participant shall have the ability to exercise any portion of the Option or Stock Appreciation Right not previously exercisable, (b) in the case of any Award
the vesting of which is in whole or in part subject to performance criteria or an Incentive Bonus, all conditions to the grant, issuance, retention, vesting or transferability of, or any other restrictions applicable to, such Award shall immediately
lapse and the Participant shall have the right to receive a payment based on performance through a date determined by the Committee, and (c) in the case of outstanding Restricted Stock and/or Restricted Stock Units (other than those referenced
in subsection (b)), all conditions to the grant, issuance, retention, vesting or transferability of, or any other restrictions applicable to, such Award shall immediately lapse. Notwithstanding anything herein to the contrary, in the event of a
Change in Control in which the acquiring or surviving company in the transaction does not assume or continue outstanding Awards upon the Change in Control, immediately prior to the Change in Control, all Awards that are not assumed or continued
shall be treated as follows effective immediately prior to the Change in Control: (a) in the case of an Option or Stock Appreciation Right, the Participant shall have the ability to exercise such Option or Stock Appreciation Right, including
any portion of the Option or Stock Appreciation Right not previously exercisable, (b) in the case of any Award the vesting of which is in whole or in part subject to performance criteria or an Incentive Bonus, all conditions to the grant,
issuance, retention, vesting or transferability of, or any other restrictions applicable to, such Award shall immediately lapse and the Participant shall have the right to receive a payment based on performance through a date determined by the
Committee, and (c) in the case of outstanding Restricted Stock and/or Restricted Stock Units (other than those referenced in subsection (b)), all conditions to the grant, issuance, retention, vesting or transferability of, or any other
restrictions applicable to, such Award shall immediately lapse. In no event shall any action be taken pursuant to this Section 15(c) that would change the payment or settlement date of an Award in a manner that would result in the imposition of
any additional taxes or penalties pursuant to Section 409A of the Code.
(d) Notwithstanding anything in this Section 15 to the contrary, in the
event of a Change in Control, the Committee may provide for the cancelation and cash settlement of all outstanding Awards upon such Change in Control.
14
(e) The Company shall notify Participants holding Awards subject to any adjustments pursuant to this
Section 15 of such adjustment, but (whether or not notice is given) such adjustment shall be effective and binding for all purposes of the Plan.
(f)
Notwithstanding anything in this Section 15 to the contrary, an adjustment to an Option or Stock Appreciation Right under this Section 15 shall be made in a manner that will not result in the grant of a new Option or Stock Appreciation
Right under Section 409A of the Code.
Each Award may not be sold, transferred for value, pledged, assigned, or otherwise
alienated or hypothecated by a Participant other than by will or the laws of descent and distribution, and each Option or Stock Appreciation Right shall be exercisable only by the Participant during his or her lifetime. Notwithstanding the
foregoing, outstanding Options may be exercised following the Participant’s death by the Participant’s beneficiaries or as permitted by the Committee.
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17.
|
Compliance with Laws and Regulations
|
This Plan, the grant, issuance, vesting, exercise and settlement
of Awards thereunder, and the obligation of the Company to sell, issue or deliver shares of Common Stock under such Awards, shall be subject to all applicable foreign, federal, state and local laws, rules and regulations, stock exchange rules and
regulations, and to such approvals by any governmental or regulatory agency as may be required. The Company shall not be required to register in a Participant’s name or deliver Common Stock prior to the completion of any registration or
qualification of such shares under any foreign, federal, state or local law or any ruling or regulation of any government body which the Committee shall determine to be necessary or advisable. To the extent the Company is unable to or the Committee
deems it infeasible to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any shares of Common Stock hereunder, the Company and
its Subsidiaries shall be relieved of any liability with respect to the failure to issue or sell such shares of Common Stock as to which such requisite authority shall not have been obtained. No Option shall be exercisable and no Common Stock shall
be issued and/or transferable under any other Award unless a registration statement with respect to the Common Stock underlying such Option is effective and current or the Company has determined that such registration is unnecessary.
In the event an Award is granted to or held by a Participant who is employed or providing services outside the United States, the Committee may, in its sole
discretion, modify the provisions of the Plan or of such Award as they pertain to such individual to comply with applicable foreign law or to recognize differences in local law, currency or tax policy. The Committee may also impose conditions on the
grant, issuance, exercise, vesting, settlement or retention of Awards in order to comply with such foreign law and/or to minimize the Company’s obligations with respect to tax equalization for Participants employed outside their home country.
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To the extent required by applicable federal, state, local or foreign law, the Committee
may and/or a Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise with respect to any Award, or the issuance or sale of any shares of Common Stock. The Company shall not
be required to recognize any Participant rights under an Award, to issue shares of Common Stock or to recognize the disposition of such shares of Common Stock until such obligations are satisfied. To the extent permitted or required by the
Committee, these obligations may or shall be satisfied by the Company withholding cash from any compensation otherwise payable to or for the benefit of a Participant, the Company withholding a portion of the shares of Common Stock that otherwise
would be issued to a Participant under such Award or any other award held by the Participant or by the Participant tendering to the Company cash or, if allowed by the Committee, shares of Common Stock.
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19.
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Amendment of the Plan or Awards
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The Board may amend, alter or discontinue this Plan and the Committee
may amend, or alter any agreement or other document evidencing an Award made under this Plan but, except as provided pursuant to the provisions of Section 15, no such amendment shall, without the approval of the stockholders of the Company:
(a) increase the maximum number of shares of Common Stock for which Awards may be granted under this Plan;
(b) reduce the price at which Options may be granted below the price provided for in Section 8(a);
(c) reprice outstanding Options or SARs as described in 8(b) and 9(b);
(d) extend the term of this Plan;
(e) change the class of
persons eligible to be Participants;
(f) increase the individual maximum limits in Section 5(c); or
(g) otherwise amend the Plan in any manner requiring stockholder approval by law or the rules of any stock exchange or market or quotation system on which the
Common Stock is traded, listed or quoted.
No amendment or alteration to the Plan or an Award or Award Agreement shall be made which would impair the
rights of the holder of an Award, without such holder’s consent, provided that no such consent shall be required if the Committee determines in its sole discretion and prior to the date of any Change in Control that such amendment or alteration
either (i) is required or advisable in order for the Company, the Plan or the Award to satisfy any law or regulation or to meet the requirements of or avoid adverse financial accounting consequences under any accounting standard, or
(ii) is not reasonably likely to significantly diminish the benefits provided under such Award, or that any such diminishment has been adequately compensated.
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20.
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No Liability of Company
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The Company, any Subsidiary or Affiliate which is in existence or hereafter
comes into existence, the Board and the Committee shall not be liable to a Participant or any other person as to: (a) the non-issuance or sale of shares of Common Stock as to which the Company has been unable to obtain from any regulatory body
having jurisdiction the authority deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any shares of Common Stock hereunder; and (b) any tax consequence expected, but not realized, by any Participant or other
person due to the receipt, exercise or settlement of any Award granted hereunder.
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21.
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Non-Exclusivity of Plan
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Neither the adoption of this Plan by the Board nor the submission of this Plan
to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or the Committee to adopt such other incentive arrangements as either may deem desirable, including without limitation, the
granting of Restricted Stock or stock options otherwise than under this Plan or an arrangement not intended to qualify under Code Section 162(m), and such arrangements may be either generally applicable or applicable only in specific cases.
This Plan and any agreements or other documents hereunder shall be interpreted and
construed in accordance with the laws of the State of Delaware and applicable federal law. Any reference in this Plan or in the agreement or other document evidencing any Awards to a provision of law or to a rule or regulation shall be deemed to
include any successor law, rule or regulation of similar effect or applicability.
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23.
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No Right to Employment, Reelection or Continued Service
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Nothing in this Plan or an Award Agreement
shall interfere with or limit in any way the right of the Company, its Subsidiaries and/or its Affiliates to terminate any Participant’s employment, service on the Board or service for the Company at any time or for any reason not prohibited by
law, nor shall this Plan or an Award itself confer upon any Participant any right to continue his or her employment or service for any specified period of time. Neither an Award nor any benefits arising under this Plan shall constitute an employment
contract with the Company, any Subsidiary and/or its Affiliates. Subject to Sections 4 and 19, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Board without giving rise to any
liability on the part of the Company, its Subsidiaries and/or its Affiliates.
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24.
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Specified Employee Delay
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To the extent any payment under this Plan is considered deferred compensation
subject to the restrictions contained in Section 409A of the Code, such payment may not be made to a specified employee (as determined in accordance with a uniform policy adopted by the Company with respect to all arrangements subject to
Section 409A of the Code) upon Separation from Service before the date that is six months after the specified employee’s
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Separation form Service (or, if earlier, the specified employee’s death). Any payment that would otherwise be made during this period of delay shall be accumulated and paid on the sixth
month plus one day following the specified employee’s Separation from Service (or, if earlier, as soon as administratively practicable after the specified employee’s death).
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25.
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No Liability of Committee Members
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No member of the Committee shall be personally liable by reason of
any contract or other instrument executed by such member or on his behalf in his capacity as a member of the Committee nor for any mistake of judgment made in good faith, and the Company shall indemnify and hold harmless each member of the Committee
and each other employee, officer or director of the Company to whom any duty or power relating to the administration or interpretation of the Plan may be allocated or delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or omission to act in connection with the Plan unless arising out of such person’s own fraud or willful bad faith; provided, however, that approval of the Board shall be
required for the payment of any amount in settlement of a claim against any such person. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the
Company’s Articles of Incorporation or By-laws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
If any provision of the Plan or any Award is or becomes or is deemed to be invalid,
illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable
laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder
of the Plan and any such Award shall remain in full force and effect.
The Plan is intended to be an unfunded plan. Participants are and shall at all times be
general creditors of the Company with respect to their Awards. If the Committee or the Company chooses to set aside funds in a trust or otherwise for the payment of Awards under the Plan, such funds shall at all times be subject to the claims of the
creditors of the Company in the event of its bankruptcy or insolvency.
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