Looking for an agreement? Search from over 1 million agreements now.

Management Stockholder S Agreement

This is an actual contract by Accellent.
Browse the agreement preview below and buy the entire agreement for $35
Search This Document
Exhibit 10.8


FORM OF

MANAGEMENT STOCKHOLDER' S AGREEMENT


This Management Stockholder' s Agreement (this " Agreement" ) is entered into as of November , 2005 (the " Effective Date" ) between Accellent Holdings Corp., a Delaware corporation (" Accellent Holdings" ), and the undersigned person (the " Management Stockholder" ) (Accellent Holdings and the Management Stockholder being hereinafter collectively referred to as the " Parties" ). All capitalized terms not immediately defined are hereinafter defined in Section 7(c) of this Agreement.


WHEREAS, on October 7, 2005, Accellent Acquisition Corp. (" AAC" ), a Delaware corporation, and Accellent Inc., a Maryland corporation (the " Company" ), entered into an Agreement and Plan of Merger, as amended on October 18, 2005 (the " Merger Agreement" ), pursuant to which Accellent Merger Sub Inc., a Maryland corporation and wholly-owned subsidiary of AAC, will merge with and into the Company (the " Merger" ) with the Company continuing as the surviving corporation (the date of such Merger, the " Closing Date" ).


WHEREAS, in connection with the Merger, the Management Stockholder has entered into a Rollover Agreement with Accellent Holdings, such agreement dated as of the date hereof (the " Rollover Agreement" ), pursuant to which the Management Stockholder and Accellent Holdings agreed that certain options to acquire shares of common stock, par value $0.01 per share, of the Company held by the Management Stockholder and granted pursuant to the Amended and Restated Accellent Inc. 2000 Stock Option and Incentive Plan (the " Existing Accellent Plan" ), will be converted into options to acquire (the " Rollover Option" ) shares of common stock, par value $0.01 per share, of Accellent Holdings (the " Common Stock" );


WHEREAS, in connection with the Merger, in addition to entering into the Rollover Agreement, the Management Stockholder has agreed to purchase shares of Common Stock;


WHEREAS, the Management Stockholder has been selected by Accellent Holdings to receive an option to purchase shares of Common Stock (the " New Option" , together with the Rollover Option, an " Option ," or collectively the " Options" ) pursuant to the terms set forth below and the terms of the 2005 Equity Plan for Key Employees of Accellent Inc. and Its Subsidiaries and Affiliates (the " Option Plan" ) and the Stock Option Agreement dated as of the date hereof, entered into by and between Accellent Holdings and the Management Stockholder (the " Stock Option Agreement" ); and


WHEREAS, this Agreement is one of several other agreements (" Other Management Stockholders' Agreements" ) which have been, or which in the future will be, entered into between Accellent Holdings and other individuals who are or will be key employees of Accellent Holdings or one of its Subsidiaries or Affiliates (collectively, the " Other Management Stockholders" ).


NOW THEREFORE, to implement the foregoing and in consideration of the grant of the Options and of the mutual agreements contained herein, the Parties agree as follows:


1. Issuance of Purchased Stock; New Options; Rollover Options . (a) The Management Stockholder hereby subscribes for and shall purchase, as of the Effective Date, and the Company shall issue and deliver to the Management Stockholder, as of the Effective Date, shares of Common Stock, at a purchase price of $5.00 (the " Base Price" ) (all such shares acquired by the Management Stockholder, the " Purchased Stock" ). The aggregate purchase price for all shares of Purchased Stock is $ . For purposes of clarification, if a Management Stockholder does not purchase any shares of Purchased Stock, all references to Purchased Stock shall be null and void with respect to such Management Stockholder for all purposes of this Agreement. (b) Subject to the terms and conditions hereinafter set forth and as set forth in the Option Plan, as of the Effective Date, Accellent Holdings will issue to the Management Stockholder a New Option to acquire shares of Common Stock at an exercise price equal to the Base Price, and the Parties shall execute and deliver to each other copies of the Stock Option Agreement concurrently with the issuance of the New Option. (c) Pursuant to the terms of the Rollover Agreement, the Rollover Option held by the Management Stockholder shall be governed by the terms of the Existing Accellent Plan and the applicable option agreement thereunder, as modified as described in the Rollover Agreement. The Management Stockholder hereby agrees that the Management Stockholder shall retain the Rollover Option (which shall hereafter be subject to the terms and conditions of this Agreement) and that the Management Stockholder is not entitled to receive, in connection with the Merger, the amount that would otherwise be payable to the Management Stockholder in respect of such Rollover Option by operation of the provisions of Section 3.3 of the Merger Agreement. (d) Accellent Holdings shall have no obligation to issue any Purchased Stock or New Options to, or enter into a Rollover Agreement with, any person who (i) is a resident or citizen of a state or other jurisdiction in which the sale of the Common Stock to him or her would constitute a violation of the securities or " blue sky" laws of such jurisdiction or (ii) is not an employee of Accellent Holdings or any of its Subsidiaries or Affiliates, including the Company, on the date hereof. 2. Management Stockholder' s Representations, Warranties and Agreements . (a) In addition to agreeing to and acknowledging the restrictions on the transfer of the Stock (as defined in Section 3) set forth in Sections 3 and 4, if the Management Stockholder is an Affiliate, the Management Stockholder also agrees and acknowledges that he will not transfer any shares of the Stock unless: (i) the transfer is pursuant to an effective registration statement under the Securities Act of 1933, as amended, and the rules and regulations in effect thereunder (the " Act" ), and in compliance with applicable provisions of state securities laws or (ii) (A) counsel for the Management Stockholder (which counsel shall be reasonably acceptable to Accellent Holdings) shall have furnished Accellent Holdings with an opinion, satisfactory in form and substance to Accellent Holdings, that no such registration is required because of the availability of an exemption from registration under the Act and (B) if the Management Stockholder is a citizen or

2


resident of any country other than the United States, or the Management Stockholder desires to effect any transfer in any such country, counsel for the Management Stockholder (which counsel shall be reasonably satisfactory to Accellent Holdings) shall have furnished Accellent Holdings with an opinion or other advice reasonably satisfactory in form and substance to Accellent Holdings to the effect that such transfer will comply with the securities laws of such jurisdiction. Notwithstanding the foregoing, Accellent Holdings acknowledges and agrees that any of the following transfers are deemed to be in compliance with the Act and this Agreement (including without limitation any restrictions or prohibitions herein) and no opinion of counsel is required in connection therewith: (x) a transfer permitted by or made pursuant to Sections 3, 4, 5, 6 or 9 hereof, (y) a transfer upon the death or Permanent Disability of the Management Stockholder to the Management Stockholder' s Estate or a transfer to the executors, administrators, testamentary trustees, legatees or beneficiaries of a person who has become a holder of Stock in accordance with the terms of this Agreement; provided that it is expressly understood that any such transferee shall be bound by the provisions of this Agreement, and (z) a transfer made after the Effective Date in compliance with the federal securities laws to a Management Stockholder' s Trust, provided that such transfer is made expressly subject to this Agreement and that the transferee agrees in writing to be bound by the terms and conditions hereof.


(b) The certificate (or certificates) representing the Stock shall bear the following legend: " THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF THE MANAGEMENT STOCKHOLDER' S AGREEMENT DATED AS OF NOVEMBER 22, 2005 BETWEEN ACCELLENT HOLDINGS CORP. (THE " COMPANY" ) AND THE MANAGEMENT STOCKHOLDER NAMED ON THE FACE HEREOF (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY)."


(c) The Management Stockholder acknowledges that he has been advised that (i) a restrictive legend in the form heretofore set forth shall be placed on the certificates representing the Stock and (ii) a notation shall be made in the appropriate records of Accellent Holdings indicating that the Stock is subject to restrictions on transfer and appropriate stop transfer restrictions will be issued to Accellent Holdings' transfer agent with respect to the Stock. If the Management Stockholder is an Affiliate, the Management Stockholder also acknowledges that (1) the Stock must be held indefinitely and the Management Stockholder must continue to bear the economic risk of the investment in the Stock unless it is subsequently registered under the Act or an exemption from such registration is available, (2) when and if shares of the Stock may be disposed of without registration in reliance on Rule 144 of the rules and regulations promulgated under the Act, such disposition can be made only in limited amounts in accordance with the terms and conditions of such rule and (3) if the Rule 144 exemption is not available, public sale without registration will require compliance with some other exemption under the Act.

3


(d) If any shares of the Stock are to be disposed of in accordance with Rule 144 under the Act or otherwise, the Management Stockholder shall promptly notify Accellent Holdings of such intended disposition and shall deliver to Accellent Holdings at, or prior to, the time of such disposition such documentation as Accellent Holdings may reasonably request in connection with such sale and, in the case of a disposition pursuant to Rule 144, shall deliver to Accellent Holdings an executed copy of any notice on Form 144 required to be filed with the SEC. (e) The Management Stockholder agrees that, if any shares of the Stock are offered to the public pursuant to an effective registration statement under the Act (other than registration of securities issued under an employee plan), the Management Stockholder will not effect any public sale or distribution of any shares of the Stock not covered by such registration statement from the time of the receipt of a notice from Accellent Holdings that Accellent Holdings has filed or imminently intends to file such registration statement to, or within 180 days after, the effective date of such registration statement, unless otherwise agreed to in writing by Accellent Holdings. (f) The Management Stockholder represents and warrants that (i) with respect to the Stock, he has received and reviewed the available information relating to the Stock, including having received and reviewed the documents comprising the Information Memorandum, dated November 18, 2005, relating to the Options and the documents referred to therein, certain of which documents set forth the rights, preferences and restrictions relating to the Options and the Stock underlying the Options and (ii) he has been given the opportunity to obtain any additional information or documents and to ask questions and receive answers about such information, Accellent Holdings and the business and prospects of Accellent Holdings which he deems necessary to evaluate the merits and risks related to his investment in the Stock and to verify the information contained in the information received as indicated in this Section 2(f), and he has relied solely on such information. (g) The Management Stockholder further represents and warrants that (i) his financial condition is such that he can afford to bear the economic risk of holding the Stock for an indefinite period of time and has adequate means for providing for his current needs and personal contingencies, (ii) he can afford to suffer a complete loss of his or her Options and investment in the Stock, (iii) he understands and has taken cognizance of all risk factors related to the Options and investment in the Stock and (iv) his knowledge and experience in financial and business matters are such that he is capable of evaluating the merits and risks of his purchase of the Stock as contemplated by this Agreement. 3. Transferability of Stock . The Management Stockholder agrees that he will not directly or indirectly, offer, transfer, sell, assign, pledge, hypothecate or otherwise dispose of (any of the foregoing acts being referred to herein as a " transfer" ) any shares of Purchased Stock, Option Stock, Net Settled Stock (as defined in Section 5(f)(i)) and any other Common Stock otherwise acquired and/or held by the Management Stockholder Entities (collectively referred to as " Stock" ) at any time during the period commencing on the Effective Date and ending on the fifth anniversary of the Effective Date; provided , however , that the Management Stockholder may transfer shares of Stock during such time pursuant to one of the following exceptions: (a) transfers permitted by Section 5, 6 or 9; (b) transfers permitted by clauses (y) and (z) of Section 2(a); (c) a sale of shares of Common Stock pursuant to an effective registration statement under the Act filed by Accellent Holdings, including without limitation pursuant to Section 9 (excluding any registration on Form S-8, S-4 or any successor or similar form); (d) transfers permitted pursuant to the Sale Participation

4


Agreement; or (e) other transfers permitted by the Board. No transfer of any such shares in violation hereof shall be made or recorded on the books of Accellent Holdings and any such transfer shall be void ab initio and of no effect; and provided , however , that if a Section 5(a) Put Event occurs following a Public Offering and prior to the fifth anniversary of the Effective Date, Accellent Holdings shall immediately waive the restrictions on transfer that would otherwise be imposed on the Management Stockholder pursuant to this Section 3 solely with respect to the Management Stockholder' s Purchased Stock and Option Stock; and provided , further , that (1) if a Section 5(b) Put Event occurs following a Public Offering and prior to the fifth anniversary of the Effective Date, Accellent Holdings shall immediately waive the restrictions on transfer that would otherwise be imposed on the Management Stockholder pursuant to this Section 3 solely with respect to a number of shares of Purchased Stock and Option Stock (rounded up to the nearest whole number) which when multiplied by the Fair Market Value Per Share on the date of such Section 5(b) Put Event is as equal as possible to the remaining tax liability (above the minimum required withholding tax liability) that would be incurred by the Management Stockholder upon the exercise of the Management Stockholder' s Rollover Options; (2) if a Section 5(c) Put Event occurs following a Public Offering and prior to the fifth anniversary of the Effective Date, Accellent Holdings shall immediately waive the restrictions on transfer that would otherwise be imposed on a Management Stockholder pursuant to this Section 3 if the Statutory Withholding (as defined in Section 5(e)(i)) on such Management Stockholder' s Rollover Options is less than or equal to $[ ](1) (the " Original Liability Amount ) and then solely with respect to a number of shares of Purchased Stock and Option Stock (rounded up to the nearest whole number) which when multiplied by the Fair Market Value Per Share on the date of such Section 5(c) Put Event is as equal as possible to the difference between the Original Liability Amount and the Statutory Withholding that has been withheld by Accellent Holdings and (3) if a Section 5(d) Put Event occurs following a Public Offering and prior to the fifth anniversary of the Effective Date, Accellent Holdings shall immediately waive the restrictions on transfer that would otherwise be imposed on the Management Stockholder pursuant to this Section 3 solely with respect to a number of shares of Purchased Stock and Option Stock (rounded up to the nearest whole number) which when multiplied by the Fair Market Value Per Share on the date of such Section 5(d) Put Event is as equal as possible to the Rollover Tax Liability (as defined in Section 5(d)). Notwithstanding anything in this Agreement to the contrary, this Section 3 shall terminate and be of no further force or effect upon the occurrence of a Change in Control.

4. Right of First Refusal . (a) If, at any time after the fifth anniversary of the Effective Date and prior to the date of consummation of a Qualified Public Offering, the Management Stockholder receives a bona fide offer to purchase any or all of his Stock (the " Third Party Offer" ) from a third party (the " Offeror" ), which the Management Stockholder wishes to accept, the Management Stockholder shall cause the Third Party Offer to be reduced to writing and shall notify Accellent Holdings in writing of his wish to accept the Third Party Offer. The Management Stockholder' s notice to Accellent Holdings shall contain an irrevocable offer to sell such Stock to Accellent Holdings (in the manner set forth below) at a purchase price equal to the price contained in, and on the same terms and conditions of, the Third Party Offer, and shall be accompanied by a copy of the Third Party Offer (which shall identify the Offeror). At any time within 15 days after the date of the receipt by

(1) Note: this amount will be equal to the actual tax liability, as calculated by Deloitte & Touche LLP, on the original value of the Rollover Options received by the Management Stockholders.


5


Accellent Holdings of the Management Stockholder' s notice, Accellent Holdings shall have the right and option to purchase, or to arrange for a third party to purchase, all (but not less than all) of the shares of Stock covered by the Offer, pursuant to Section 4(b). (b) Accellent Holdings shall have the right and option to purchase, or to arrange for a third party to purchase, all of the shares of Stock covered by the Third Party Offer at the same price and on substantially the same terms and conditions as the Third Party Offer (or, if the Third Party Offer includes any consideration other than cash, then at the sole option of Accellent Holdings, at the equivalent all cash price, determined in good faith by the Board), by delivering a certified bank check or checks in the appropriate amount (or by wire transfer of immediately available funds, if the Management Stockholder Entities provide to Accellent Holdings wire transfer instructions) (and any such non-cash consideration to be paid) to the Management Stockholder at the principal office of Accellent Holdings against delivery of certificates or other instruments representing the shares of Stock so purchased, appropriately endorsed by the Management Stockholder. If at the end of the 15-day period, Accellent Holdings has not tendered the purchase price for such shares in the manner set forth above, the Management Stockholder may, during the succeeding 60-day period, sell not less than all of the shares of Stock covered by the Third Party Offer, to the Offeror on terms no less favorable to the Management Stockholder than those contained in the Third Party Offer. Promptly after such sale, the Management Stockholder shall notify Accellent Holdings of the consummation thereof and shall furnish such evidence of the completion and time of completion of such sale and of the terms thereof as may reasonably be requested by Accellent Holdings. If, at the end of 60 days following the expiration of the 15-day period during which Accellent Holdings is entitled hereunder to purchase the Stock, the Management Stockholder has not completed the sale of such shares of the Stock as aforesaid, all of the restrictions on sale, transfer or assignment contained in this Agreement shall again be in effect with respect to such shares of the Stock. (c) Notwithstanding anything in this Agreement to the contrary, this Section 4 shall terminate and be of no further force or effect upon the occurrence of a Change in Control. 5. The Management Stockholder' s Right to Resell Stock and Options to Accellent Holdings . (a) Except as otherwise provided herein, if, prior to a Public Offering, the Management Stockholder is still in the employ of Accellent Holdings (and/or, if applicable, its Subsidiaries or Affiliates) and the Management Stockholder' s employment is terminated as a result of the death or Permanent Disability of the Management Stockholder (the " Section 5(a) Put Event" ), then with respect to the Purchased Stock and Option Stock, the applicable Management Stockholder Entity shall, for one hundred and eighty (180) days (the " Put Period" ) following the date of such death or Permanent Disability, have the right to sell to Accellent Holdings, and Accellent Holdings shall be required to purchase, on one occasion, all of the shares of Purchased Stock and Option Stock then held by the applicable Management Stockholder Entities, at a per share price equal to the Fair Market Value Per Share on the applicable repurchase date (the " Section 5 Repurchase Price" ). (b) Except as otherwise provided herein, if, prior to the Public Offering, the Management Stockholder is still in the employ of Accellent Holdings (and/or, if applicable, its Subsidiaries or Affiliates) and (x) the Management Stockholder' s employment is terminated by (i) the Accellent Holdings (or its Subsidiaries or Affiliates) without Cause or

6


(ii) by the Management Stockholder for Good Reason (collectively, a " Section 5(b) Put Event" ), and (y) Accellent Holdings has not exercised its rights pursuant to Section 6(d), then the applicable Management Stockholder Entity shall have 30 days from the end of the Call Period (as defined below) (the " Rollover Put Period" ) to exercise its rights pursuant to the Rollover Options through the use of the Modified Option Put Right (as defined in Section 5(e)(ii)). (c) Except as otherwise provided herein, if, prior to a Public Offering, the Management Stockholder is still in the employ of Accellent Holdings (and/or, if applicable, its Subsidiaries or Affiliates) and (x) the Management Stockholder' s employment is terminated by the Management Stockholder without Good Reason (and other than on account of death or Permanent Disability) (the " Section 5(c) Put Event" ) and (y) Accellent Holdings has not exercised its rights pursuant to Section 6(d), then, during the Rollover Put Period, the applicable Management Stockholder Entity shall have the ability to exercise its rights pursuant to the Rollover Options through the use of the Modified Option Put Right. (d) Except as otherwise provided herein, if, prior to a Public Offering, the Management Stockholder is still in the employ of Accellent Holdings (and/or, if applicable, its Subsidiaries or Affiliates) and a Management Stockholder Entity receives a notice (a " Tax Notice" ) from the Internal Revenue Service that taxes are due and payable in connection with the Rollover Options (other than in connection with the exercise or lapse of restrictions thereof) (the " Rollover Tax Liability" ) (the " Section 5(d) Put Event" ), the applicable Management Stockholder Entity shall have a period of 30 days following the notification to Accellent Holdings of the receipt of the Tax Notice (the " Tax Put Period" ), to exercise its rights with respect to the Rollover Options through the use of the Modified Option Put Right. (e) (i) Prior to a Public Offering and during (x) the Put Period following a Section 5(a) Put Event, with respect to vested New Options and all Rollover Options, (y) the Rollover Put Period, following a Section 5(b) Put Event, or a Section 5(c) Put Event, with respect to the Rollover Options, or (z) the Tax Put Period, following a Section 5(d) Put Event, with respect to the Rollover Options, the applicable Management Stockholder Entities have the right to receive from Accellent Holdings, on one occasion, in exchange for all of the exercisable Options or Rollover Options, as applicable, then held by the applicable Management Stockholder Entities, if any, a number of shares of Stock equal to the quotient of (x) the product of (A) the excess, if any, of the Section 5 Repurchase Price over the Option Exercise Price and (B) the number of Exercisable Option Shares, divided by (y) the Section 5 Repurchase Price, which Options shall be terminated in exchange for such payment in shares (the " Net Settled Stock" ). Such number of shares of Net Settled Stock shall be further reduced by the number of shares equal in Fair Market Value Per Share to the amount of the applicable withholding taxes which Accellent Holdings is required to withhold in respect of the income recognized as a consequence of the exercise of the Options or Rollover Options, as applicable (the " Statutory Withholding" ); provided , however , that the value of the Net Settled Stock for this purpose will be determined using the Section 5 Repurchase Price. In the event the foregoing Option Excess Price is zero or a negative number, such outstanding exercisable Options shall be automatically terminated without any payment in respect thereof. In the event that the applicable Management Stockholder Entity does not exercise the foregoing rights, all exercisable but unexercised Options shall terminate pursuant to the applicable terms of the Stock Option Agreement. All unexercisable Options held by the applicable Management Stockholder Entities shall terminate without payment immediately upon termination of employment; and

7


(ii) For 30 days following the receipt by the applicable Management Stockholder Entities of the Net Settled Stock (the " Settled Stock Put Period" ) (which period may, for the avoidance of doubt, extend after the expiration of the applicable put period), the applicable Management Stockholder Entities shall have the right to sell to Accellent Holdings, and Accellent Holdings shall be required to purchase, on one occasion, all such Net Settled Stock held by the applicable Management Stockholder Entity, at a per share price equal to the applicable Section 5 Repurchase Price (the right set forth herein, the " Modified Option Put Right" ); provided , however , (x) for Net Settled Stock received by the applicable Management Stockholder Entities pursuant to a Section 5(b) Put Event, Accellent Holdings shall only be required to purchase a number of shares of Net Settled Stock equal to the remaining tax liability (above the minimum required withholding tax liability) incurred by each such Management Stockholder Entity upon such exercise; (y) for Net Settled Stock received by the Management Stockholder Entity pursuant to a Section 5(c) Put Event, Accellent Holdings will only be required to purchase shares of Net Settled Stock if the amount of the Statutory Withholding is less than or equal to the Original Liability Amount and then only up to the Statutory Withholding that has been withheld by Accellent Holdings and (z) for Net Settled Stock received by the applicable Management Stockholder Entities pursuant to a Section 5(d) Put Event, Accellent Holdings will only be required to purchase a number of shares of Net Settled Stock equal to the Rollover Tax Liability. (f) In the event the applicable Management Stockholder Entities intend to exercise their rights pursuant to Sections 5(a) (d), such Management Stockholder Entities shall send written notice to Accellent Holdings, (i) at any time during the Put Period, of their intention to sell shares of Stock in exchange for the payment referred to in Section 5(a) or (ii) at any time during the Settled Stock Put Period, Rollover Put Period or Tax Put Period, as applicable, of their intention to sell the Net Settled Stock or Option Stock, as applicable, in exchange for the payment referred to in Sections 5(a) (d) (the " Redemption Notice" ). The completion of the applicable purchases or exchanges shall take place at the principal office of Accellent Holdings on the tenth business day after the giving of the applicable Redemption Notice. The applicable Repurchase Price shall be paid by delivery to the applicable Management Stockholder Entities of a certified bank check or checks in the appropriate amount payable to the order of each of the applicable Management Stockholder Entities (or by wire transfer of immediately available funds, if the Management Stockholder Entities provide to Accellent Holdings wire transfer instructions) and the Net Settled Stock shall be delivered to the applicable Management Stockholder Entities, both against delivery of cert
-- End of Preview --
Home| About Us| FAQ| Subscription | Contact Us |