Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1 Gerber Childrenswear, Inc. 131 744K
2: EX-4.2 Credit Agreement 108 427K
3: EX-10.1 Stock Purchase Agreement 51 215K
11: EX-10.10 Subordination and Interceditor Agreement 17 68K
12: EX-10.11 Junior Subordinated Note 25 100K
13: EX-10.13 License Agreement 28 91K
14: EX-10.14 License Agreement 31 73K
15: EX-10.15 Trademark License Agreement 33 127K
16: EX-10.16 Lease Agreement 7 31K
17: EX-10.17 Lease Agreement 6 28K
18: EX-10.18 Lease Agreement 6 28K
19: EX-10.19 Lease Agreement 11 37K
4: EX-10.2 Form of Executive Stock Purchase Agreement 21 90K
20: EX-10.20 Lease Agreement 40 120K
21: EX-10.21 Severance Agreement 2 14K
5: EX-10.3 Form of Manager Securities Purchase Agreement 17 69K
6: EX-10.4 Securities Purchase Agreement 13 60K
7: EX-10.5 Form of Director Stock Purchase Agreement 12 44K
8: EX-10.7 Stock Purchase Agreement 54 224K
9: EX-10.8 Share Purchase Agreement 52 242K
10: EX-10.9 Amended and Restated Credit Agreement 54 238K
22: EX-21.1 Subsidiaries of the Registrant 1 8K
23: EX-23.1 Consent of Ernst & Young LLP 1 10K
24: EX-23.2 Consent of Jc Holland & Co Psc 1 8K
25: EX-23.3 Consent Price Waterhouse 1 8K
26: EX-27.1 Financial Data Schedule 1 10K
EX-10.2 — Form of Executive Stock Purchase Agreement
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Exhibit 10.2
FORM OF EXECUTIVE STOCK PURCHASE AGREEMENT
EXECUTIVE STOCK PURCHASE AGREEMENT dated as of January 22, 1996, by
and among GCIH, INC., a Delaware corporation (the "Company"), Gerber
Childrenswear, Inc., a Delaware corporation ("GCI"), ______________ (the
"Executive") and Citicorp Venture Capital, Ltd., a New York corporation ("CVC").
The Company and the Executive desire to enter into an agreement that
will provide for (i) the employment of the Executive as ___________________ of
the Company, (ii) the acquisition by the Executive of ________ shares of the
Company's Class B Common Stock, par value $0.01 per share (the "Class B Common",
and (iii) the acquisition by the Executive of _______ shares of the Company's
Series A Preferred Stock, par value $0.01 per share (the "Series A Preferred")
upon the terms and conditions set forth herein. All of such shares of Class B
Common, Series A Preferred and all shares of capital stock hereafter acquired by
the Executive are referred to herein as "Executive Stock."
WHEREAS, the Company was formed for the purpose of acquiring all of
the outstanding capital stock of GCI, pursuant to the terms of that certain
stock purchase agreement ("Stock Purchase Agreement"), dated as of December 14,
1995, by and among the Company and Gerber Products Company, a Michigan
corporation (the "Seller").
The execution and delivery of this Agreement by the Company and the
Executive is a condition to the purchase of certain securities of the Company by
Citicorp Venture Capital, Ltd., a New York corporation ("CVC"), pursuant to a
securities purchase agreement, dated as of the date hereof (the "CVC Securities
Purchase Agreement"). Certain provisions of this Agreement are intended for the
benefit of, and will be enforceable by, CVC.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. As used herein, the following terms shall have the
following meanings.
"Affiliate" shall mean, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with its correlative meanings, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
"Board" means the Company's board of directors.
"Book Value" of each share of Vesting Executive Stock shall be equal
to the quotient determined by dividing (A) the excess of Company's consolidated
assets over its consolidated liabilities as of the end of the fiscal quarter
immediately preceding the date of Executive's Termination, determined on a
consolidated basis in accordance with GAAP less the liquidation value of all of
the Company's outstanding preferred stock, if any by (B) the total number of
shares of Common Stock outstanding on a fully-diluted basis (including in such
calculation the aggregate
conversion price an exercise price of all outstanding convertible securities,
options and warrants).
"Business Day" means any day other than a Saturday or Sunday or a
day on which commercial banks are required or authorized to close in New York,
New York.
"Cause" means (i) a material breach of this Agreement by the
Executive that is not susceptible to remedy or cure, or if susceptible to remedy
or cure, is not cured or remedied and continues for fifteen (15) Business Days
after the Board has given written notice to Executive specifying in reasonable
detail the manner in which Executive has breached this Agreement, (ii) the
determination by the Board, in the exercise of its reasonable judgment, that the
Executive committed a felony, a crime involving moral turpitude or other act
causing material harm to the standing and reputation of the Company or its
Subsidiaries in each case after notice to Executive and reasonable procedure for
Executive to state his case to the Board, (iii) the determination by the Board,
in the exercise of its reasonable judgment, that the Executive breached his duty
of loyalty to the Company and its Subsidiaries after notice to Executive and
reasonable procedure for Executive to state his case to the Board, or (iv) the
Executive's continued failure to perform his duties to the Company and its
Subsidiaries after written notice and, if susceptible to remedy or cure is not
cured or remedied and continues for fifteen (15) Business Days after the Board
has given written notice to the Executive specifying in reasonable detail the
manner in which the Executive has continued to fail to perform his duties.
"Common Stock" means the Class A Common, the Class B Common, the
Class C Common, and the Class D Common, as adjusted for any stock split, stock
dividend, share combination, share exchange, recapitalization, merger,
consolidation or other reorganization.
"Executive Stock" is defined in the preamble hereto and will include
shares of the Company's capital stock issued with respect to Executive Stock by
way of a stock split, stock dividend or other recapitalization. Executive Stock
will cease to be Executive Stock when transferred pursuant to a Qualified Public
Offering or Sale of the Company. Executive Stock will continue to be Executive
Stock in the hands of any holder other than the Executive, including all
transferees of the Executive (except for the Company and CVC (or its designee)),
and except as otherwise provided herein, each such other holder of Executive
Stock will succeed to all rights and obligations attributable to the Executive
as a holder of Executive Stock hereunder.
"GAAP" means U.S. generally accepted accounting principles, as in
effect from time to time and as adopted by the Company with the consent of its
independent public accountants, consistently applied.
"Original Cost" of each share Vesting Executive Stock purchased on
the date hereof will be equal to $1.00 per share.
"Permanent Disability" means Executive is unable to perform, by
reason of physical or mental incapacity, his duties or obligation under this
Agreement, for a period of ninety (90) consecutive days or a total period of one
hundred twenty (120) days in any three hundred sixty (360) day period.
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"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or political
subdivision thereof.
"Qualified Public Offering" means the sale, in an under-written
public offering registered under the Securities Act, of shares of the Company's
Common Stock having an aggregate value of at least $30 million.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date hereof, by and among the Company, CVC and the
Executives and others, as in effect from time to time.
"Sale of the Company" means the sale of the Company, in a single
transaction or a series of related transactions, to a third party (which is not
an Affiliate of the Approving Stockholders) (a) pursuant to which such third
party proposes to acquire all or substantially all of the outstanding Common
Stock (whether by merger, consolidation, recapitalization, reorganization,
purchase of the outstanding Common Stock or otherwise) or all or substantially
all of the consolidated assets of the Company, (b) which has been approved by
the Board and holders of a majority of the outstanding shares of Common Stock
issued to CVC and its Affiliates, other than Citicorp Mezzanine Partners, L.P.,
a Delaware limited partnership ("CMP"), voting together as a single class (the
"Approving Stockholders"), and (c) pursuant to which all holders of Common Stock
receive with respect thereto (whether in such transaction or, with respect to an
asset sale, upon a subsequent liquidation) the same form and amount of
consideration per share of Common Stock or, if any holders are given an option
as to the form and amount of consideration to be received, all holders are given
the same option.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Stockholders Agreement" means the Stockholders Agreement, dated as
of the date hereof, by and among the Company, the Executives, CVC and others, as
in effect from time to time.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a partnership, association or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a partnership, association or other business entity if
such Person or Persons shall be allocated a majority of partnership, association
or other business entity gains or losses or shall be or control the managing
director or general partner of such partnership, association or other business
entity.
"Termination Year" means that fiscal year of the Company during
which the Employment Period ends pursuant to the terms of Section 7(d) hereof.
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"Vesting Executive Stock" means the _______ shares of Class B Common
subject to vesting and stock issued in connection therewith, as adjusted for any
stock split, stock dividend, share combination, share exchange,
recapitalization, merger, consolidation or other reorganization. Vesting
Executive Stock will cease to be Vesting Executive Stock when transferred
pursuant to a Public Sale or Sale of the Company. Vesting Executive Stock will
continue to be Vesting Executive Stock in the hands of any holder other than the
Executive, including all transferees of the Executive (except for the Company
and CVC (or its designees)), and except as otherwise provided herein, each such
other holder of Vesting Executive Stock will succeed to all rights and
obligations attributable to the Executive as a holder of Executive Stock
hereunder.
2. Purchase and Sale of Executive Securities.
(a) Upon execution of this Agreement, the Executive will purchase,
and the Company will sell (i) ________ shares of Class B Common at a price of
$1.00 per share, (ii) ______ shares of Class B Common at a price of $__ per
share and (iii) _______ shares of Series A Preferred at a price of $100.00 per
share, for a total purchase price of $__________ (the "Purchase Price"). The
Company will deliver to the Executive certificates representing such shares, and
on the date hereof (the "Purchase Date"), the Executive will deliver to the
Company (or its designee) a check or wire transfer of immediately available
funds in an amount equal to the Purchase Price less the $______ partial payment
previously made by the Executive to the Company. The Purchase Date may be
extended at the option of the Company and CVC.
(b) Upon execution of this Agreement, the Executive shall execute
and deliver the Stockholders Agreement.
(c) With respect to the Vesting Executive Stock, within 30 days
after the Executive purchases any Vesting Executive Stock from the Company, the
Executive will make an effective election with the Internal Revenue Service
under Section 83(b) of the Internal Revenue Code and the regulations promulgated
thereunder in the form of Exhibit A attached hereto.
(d) In connection with the purchase and sale of the Executive Stock
hereunder, the Executive represents and warrants to the Company that:
(i) The Executive Stock to be acquired by the Executive
pursuant to this Agreement will be acquired for the Executive's own account and
not with a view to, or intention of, distribution thereof in violation of the
Securities Act, or any applicable state securities laws, and the Executive Stock
will not be disposed of in contravention of the Securities Act or any applicable
state securities laws.
(ii) No commission, fee or other remuneration is to be paid or
given, directly or indirectly, to any Person for soliciting the Executive to
purchase the Executive Stock.
(iii) The Executive is an executive officer of the Company, is
sophisticated in financial matters and is able to evaluate the risks and
benefits of the investment in the Executive Stock and has determined that such
investment in the Executive Stock is suitable for the Executive, based upon the
Executive's financial situation and needs, as well as the Executive's other
securities holdings.
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(iv) The Executive qualifies an "accredited investor" within
the meaning of Rule 501(a) of Regulation D under the Securities Act.
(v) The Executive:
(A) has not filed a registration statement which is the
subject of a currently effective registration stop order entered pursuant to any
state's securities law within the last five years;
(B) has not been convicted within the last five years of
any felony or misdemeanor in connection with the offer, purchase or sale of any
security or any felony involving fraud or deceit, including, but not limited to,
forgery, embezzlement, obtaining money under false pretenses, larceny or
conspiracy to defraud;
(C) is not currently subject to any state administrative
enforcement order or judgment entered by the state securities administrator
within the last five years or is subject to any state's administrative
enforcement order or judgment in which fraud or deceit, including, but not
limited to, making untrue statements of material facts and omitting to state
material facts, was found and the order or judgment was entered within the last
five years;
(D) is not subject to any state's administrative
enforcement order or judgment which prohibits, denies or revokes the use of any
exemption from registration in connection with the offer, purchase or sale of
securities; or
(E) is not currently subject to any order, judgment or
decree of any court of competent jurisdiction, entered within the last five
years, temporarily or preliminarily restraining or enjoining such party from
engaging in or continuing any conduct or practice in connection with the
purchase or sale of any security or involving the making of any false filing
with the state.
(vi) The Executive is able to bear the economic risk of the
Executive's investment in the Executive Stock for an indefinite period of time
and the Executive understands that the Executive Stock has not been registered
under the Securities Act and cannot be sold unless subsequently registered under
the Securities Act or an exemption from such registration is available.
(vii) The Executive has had an opportunity to ask questions
and receive answers concerning the terms and conditions of the offering of
Executive Stock and has had full access to such other information concerning the
Company as the Executive has requested. The Executive has reviewed, or has had
an opportunity to review, the following documents: (A) the Stock Purchase
Agreement; (B) the Company's Certificate of Incorporation and Bylaws; (C) the
loan agreements, notes and related documents with the Company's senior lenders;
(D) the loan agreement, notes and related documents with the Company's senior
subordinated lender; and (E) all of the materials provided by the Company to any
Person providing financing to the Company, including, but not limited to, the
Company's pro forma balance sheet, as well as financial projections, estimates,
forecasts, budgets, summaries, reports and other related documents.
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(viii) This Agreement constitutes the legal, valid and binding
obligation of the Executive, enforceable in accordance with its terms, and the
execution, delivery and performance of this Agreement by the Executive does not
and will not conflict with, violate or cause a breach of any agreement, contract
or instrument to which the Executive is a party or any judgment, order or decree
to which the Executive is subject.
(e) As an inducement to the Company to issue the Executive Stock to
the Executive, and as a condition thereto, the Executive acknowledges and agrees
that neither the issuance of the Executive Stock to the Executive nor any
provision contained herein shall entitle the Executive to remain in the
employment of the Company and its Subsidiaries or affect the right of the
Company to terminate the Executive's employment at any time for any reason.
3. Vesting of Executive Stock. (a) (i) ________ shares of the Class B
Common evidenced by certificates and stock issued in connection therewith and
acquired by the Executive hereunder and (ii) 1,188.4 shares of Series A
Preferred evidenced by certificates and stock issued in connection therewith are
fully vested as of the date hereof and are not subject to the terms of Section 4
below. The Vesting Executive Stock originally acquired by the Executive will
become vested in accordance with the following schedule if, as of each such
date, the Executive is still employed by the Company or its Subsidiaries.
Cumulative Percentage of Shares
of Vesting Executive
Date Stock Which Will Vest
------------------------------------------------ -------------------------------
First anniversary of the date hereof ("Year 1") 20%
Second anniversary of the date hereof ("Year 2") 40%
Third anniversary of the date hereof ("Year 3") 60%
Fourth anniversary of the date hereof ("Year 4") 80%
Fifth anniversary of the date hereof ("Year 5") 100%
If after the first anniversary of the date hereof, the Executive
ceases to be employed by the Company or its Subsidiaries for any reason,
including the death or permanent disability of the Executive, the cumulative
percentage of the Vesting Executive Stock to become vested will be determined on
a pro rata basis according to the number of days elapsed since the prior
anniversary date.
(b) Shares of Vesting Executive Stock which have become vested are
referred to herein as "Vested Shares," and all other shares of Vesting Executive
Stock are referred to herein as "Unvested Shares."
4. Repurchase Option on Vesting Executive Stock. In the event the
Executive ceases to be employed by the Company and its Subsidiaries for any
reason (the "Termination"), the Vesting Executive Stock (whether held by the
Executive or one or more of the Executive's transferees) will be subject to
repurchase by the Company and CVC (or its designees) pursuant to the terms and
conditions set forth in this Section 4 (the "Repurchase Option").
(a) (i) The purchase price for each Unvested Share of Vesting
Executive Stock will be the Executive's Original Cost for such share; (ii) the
purchase price for each Vested Share
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of Vesting Executive Stock will be the Book Value for such share; and (iii)
notwithstanding the foregoing, if the Executive's Termination was for Cause,
then the purchase price for each Vested Share and each Unvested Share will be
the Executive's Original Cost.
(b) In the event that the Company or CVC exercises the Repurchase
Option and an Approved Sale or Qualified Public Offering (each a "Qualified
Transfer") occurs within one (1) year following the Executive's Termination, the
purchase price received by the Executive pursuant to the terms of Section
4(a)(ii) above shall be increased (but not decreased) by an amount (the
"Repurchase Price Adjustment") equal to (i), in the case of an Approved Sale,
the difference between the Book Value received for each share and the price per
share which the Executive would have received had the Executive held such shares
at the time of the Qualified Transfer and (ii) in the case of a Qualified Public
Offering, the net price received by the Company in connection therewith assuming
(for purposes of this calculation only) that as of such date Executive's Vesting
Executive Stock remained outstanding. The Repurchase Price Adjustment shall be
payable by the Company to the Executive upon consummation of a Qualified
Transfer.
(c) The Board may elect to cause the Company to purchase (i) all or
a portion of the Unvested Shares and/or, (ii) all or a portion of the Vested
Shares by delivering written notice (the "Repurchase Notice") to the holder or
holders of the Vesting Executive Stock within 90 days after the Termination. The
Repurchase Notice will set forth the number of Unvested Shares and Vested Shares
to be acquired from each holder, the aggregate consideration to be paid for such
securities and the time and place for the closing of the transaction. The number
of shares of Vesting Executive Stock to be repurchased by the Company shall
first be satisfied to the extent possible from the Vesting Executive Stock held
by the Executive at the time of delivery of the Repurchase Notice. If the shares
of Vesting Stock then held by the Executive are less than the total number of
shares of Vesting Executive Stock the Company has elected to purchase the
Company shall purchase the remaining Vesting Executive Stock elected to be
purchased from the other holder(s) of Executive Stock, pro rata according to the
amount of such Vesting Executive Stock held by such other holder(s) at the time
of delivery of such Repurchase Notice (determined as nearly as practicable to
the nearest share). The number of Unvested Shares and Vested Shares to be
repurchased hereunder will be allocated among the Executive and the other
holders of Vesting Executive Stock (if any) pro rata according to the number of
shares of Vesting Executive Stock to be purchased from such Persons.
(d) If for any reason the Company does not elect to purchase all of
the shares of Vesting Executive Stock that are subject to such Repurchase
Option, pursuant to the Repurchase Option, CVC (or its designees) shall be
entitled to exercise the Repurchase Option for the Vesting Executive Stock the
Company has not elected to purchase (the "Available Securities"). Of the
Available Securities, the Vested Shares are referred to herein as "Available
Vested Shares" and Unvested Shares are referred to herein as "Available Unvested
Shares". As soon as practicable after the Company has determined that there will
be Available Securities, but in any event within 180 days after the Termination,
the Company shall give written notice (the "Option Notice") to CVC (or its
designees) setting forth the number of Available Vested Shares, Available
Unvested Shares, and the purchase price for each of such Available Securities.
CVC (or its designees) may elect to purchase all or a portion of (i) Available
Vested Shares, and/or (ii) all or a portion of the Available Unvested Shares by
giving written notice to the Company within 90 days after the Option Notice has
been given by the Company. As soon as practicable, and in any event within ten
days after the
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expiration of the 90-day period set forth above, the Company shall notify each
holder of Vesting Executive Stock as to the number of Vested Shares or Unvested
Shares being purchased from such holder by CVC (or its designees) (the
"Supplemental Repurchase Notice"). At the time the Company delivers the
Supplemental Repurchase Notice to the holder(s) of such Vesting Executive Stock,
the Company shall also deliver written notice to CVC (or its designees) setting
forth the number of Vested Shares and Unvested Shares which CVC (or its
designees) is entitled to purchase, the aggregate purchase price and the time
and place of the closing of the transaction.
(e) The closing of the purchase of the Vesting Executive Stock
pursuant to the Repurchase Option shall take place on the date designated by the
Company in the Repurchase Notice or Supplemental Repurchase Notice, which date
shall not be later than the 60th day after the delivery of the later of such
notices to be delivered (or, if later, the 15th day after the Book Value is
finally determined) nor earlier than the fifth day after such delivery. The
Company and/or CVC (or its designee) will pay for the Vesting Executive Stock to
be purchased pursuant to the Repurchase Option by delivery of a certified or
cashier's check or wire transfer of funds. The purchasers of Vesting Executive
Stock hereunder will be entitled to receive customary representations and
warranties from the sellers as to title, authority and capacity to sell and to
require all sellers' signatures to be guaranteed.
(f) Notwithstanding anything to the contrary contained in this
Agreement, all repurchases of Vesting Executive Stock by the Company shall be
subject to applicable restrictions contained in the Delaware General Corporation
Law. If any such restrictions prohibit the repurchase of Vesting Executive Stock
hereunder which the Company is otherwise entitled to make, the Company may make
such repurchases as soon as it is permitted to do so under such restrictions.
5. Restrictions on Transfer.
(a) The Executive Stock will bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMP TION FROM
REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER,
CERTAIN REPURCHASE OPTIONS AND CERTAIN OTHER AGREEMENTS SET FORTH IN
AN EXECUTIVE STOCK PURCHASE AGREEMENT BETWEEN THE COMPANY AND THE
SIGNATORY THERETO DATED AS OF JANUARY 22, 1996. A COPY OF SUCH
AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY'S
PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."
(b) No holder of Executive Stock may sell, transfer or dispose of
any shares of Executive Stock (except pursuant to an effective registration
statement under the Securities Act) without first delivering to the Company an
opinion of counsel (reasonably acceptable in form and
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substance to the Company) that neither registration nor qualification under the
Securities Act and applicable state securities laws is required in connection
with such transfer.
(c) Each holder of Executive Stock agrees not to effect any public
sale or distribution of any Executive Stock or other equity securities of the
Company, or any securities convertible into or exchangeable or exercisable for
any of the Company's equity securities, during the seven days prior to and the
180 days after the effectiveness of any underwritten public offering, except as
part of such underwritten public offering or if otherwise permitted by the
Company.
6. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Executive that:
(a) Immediately following the consummation of the transactions
contemplated hereby, the authorized capital stock of the Company shall consist
of (i) 661,655.1 shares of Class A Common Stock, par value $0.01 per share (the
"Class A Common") of which 661,655.1 shares shall be issued and outstanding,
(ii) 144,594.9 shares of Class B Common, of which 144,594.9 shares shall be
issued and outstanding, (iii) 2,500.0 shares of Class C Common Stock, par value
$0.01 per share (the "Class C Common") of which 2,500.0 shares shall be issued
and outstanding, (iv) 191,250.0 shares of Class D Common Stock, par value $0.01
per share (the "Class D Common") of which 191,250.0 shares shall be reserved for
issuance upon exercise of the Warrant held by Citicorp Mezzanine Partners, L.P.,
a Delaware limited partnership, and (v) 117,402.5 shares of Series A Preferred
of which 117,402.5 shares shall be issued and outstanding. Except as set forth
in this Section 6(a) and except for capital stock of the Company's Subsidiaries
owned directly or indirectly by the Company, as of immediately following the
consummation of the transactions contemplated hereby, neither the Company nor
any Subsidiary shall have outstanding any stock or securities convertible or
exchangeable for any shares of its capital stock or containing any profit
participation features, nor shall it have outstanding any rights or options to
subscribe for or to purchase its capital stock or any stock or securities
convertible into or exchangeable for its capital stock or any stock appreciation
rights or phantom stock plans. As of immediately following the consummation of
the transactions contemplated hereby, all of the outstanding shares of the
Company's capital stock shall be validly issued, fully paid and nonassessable.
(b) There are no statutory or contractual stockholders preemptive
rights or rights of refusal with respect to the issuance of the Executive Stock
hereunder. The Company has not violated any applicable federal or state
securities laws in connection with the offer, sale or issuance of any of its
capital stock, and the offer, sale and issuance of the Executive Stock hereunder
do not require registration under the Securities Act or any applicable state
securities laws. To the best of the Company's knowledge, there are no agreements
between the Company's stockholders with respect to the voting or transfer of the
Company's capital stock or with respect to any other aspect of the Company's
affairs, except for (i) the Stockholders Agreement, (ii) the Registration Rights
Agreement and (iii) the Executive Stock Purchase Agreements dated as of the date
hereof by and between the Company and certain employees of the Company.
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7. Employment.
(a) Employment. The Company agrees to employ the Executive, and the
Executive hereby accepts employment with the Company, upon the terms and
conditions set forth in this Agreement for the period beginning on the Purchase
Date and ending as provided in Section 7(d) (the "Employment Period").
(b) Position and Duties.
(i) Commencing on the Closing Date and continuing during the
Employment Period, Executive shall serve as ___________ of the Company under the
supervision and direction of the Company's and GCI's respective boards of
directors.
(ii) The Executive shall devote his best efforts and his full
business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity which does not constitute
Permanent Disability) to the business and affairs of the Company, GCI and its
Subsidiaries. The Executive shall perform his duties and responsibilities to the
best of his abilities in a diligent, trustworthy, businesslike and efficient
manner. The Executive shall not be required to change his principal residence
from the New York metropolitan area.
(c) Base Salary and Benefits.
(i) In order to induce the Executive to enter this Agreement
and commence employment hereunder, the Company shall pay to the Executive a
bonus payment of $______ (the "Signing Bonus") on the Purchase Date. The Signing
Bonus shall be payable in a single installment, and shall be subject to
customary withholding.
(ii) During the Employment Period, Executive's base salary
shall be $_______ per annum (the "Base Salary"), which salary shall be payable
in regular installments in accordance with the Company's general payroll
practices and shall be subject to customary withholding.
(iii) Executive Bonus. (A) As soon as practicable following
the execution of this Agreement, the Board shall, in good faith, adopt an
incentive performance plan based on discussions with the Executive and
management and based upon the pro forma plans and projections which management
has previously submitted to the Company (the "1996 Plan"). If the criteria of
the 1996 Plan are completely achieved, the Executive's bonus (in any year, the
"Bonus") for the fiscal year ended December 31, 1996 (the "1996 Bonus") shall be
determined in accordance with the provisions of the 1996 Plan, and shall not be
less than $148,000.
(B) Thereafter during the Employment Period and promptly
following the end of each fiscal year, the Board will engage in similar
discussions with the Executive and management and shall in good faith, adopt
annual incentive performance plans.
(iv) In addition to the Base Salary and any Bonuses payable to
the Executive pursuant to Section 7(c), Executive shall be entitled, during the
Employment Period, to the following benefits (collectively, "Benefits"):
-10-
(A) The Executive shall be entitled to participate in
all of the Company's or the Subsidiaries' employee benefit programs for which
senior executive employees of the Company or its Subsidiaries are generally
eligible on the same terms and conditions as such senior executive employees;
(B) The Company will pay the premiums on a term life
insurance policy in the amount of $625,000, to be obtained by the Executive for
the benefit of the Executive or such other beneficiary as the Executive shall
name therein; and
(C) The Company will pay the dues of the Executive for
the Executive's membership in the Harmonie Club and any reasonable business
expenses related thereto.
(v) The Company shall reimburse the Executive for all
reasonable expenses incurred by him in the course of performing his duties under
this Agreement which are consistent with the Company's and its Subsidiaries'
policies in effect from time to time with respect to travel, entertainment and
other business expenses, subject to the Company and its Subsidiaries'
requirements with respect to reporting and documentation of such expenses.
(d) Term.
(i) The Employment Period shall end on January 22, 2001,
subject to earlier termination (A) by reason of the Executive's death or
Permanent Disability, (B) by resolution of the directors constituting a majority
of the Board's voting power, with or without Cause or (C) upon the Executive's
voluntary resignation.
(ii) Termination for Cause. If the Employment Period is
terminated by the Company for Cause, the Executive shall be entitled to his Base
Salary through the date of termination, but shall not be entitled to any further
Base Salary or any Bonus or Benefits for that year or any future year, or to any
severance compensation of any kind, nature or amount.
(iii) Death or Disability. If Executive's employment is
terminated as a result of his death or Permanent Disability, the Company shall
pay to Executive or his estate, as applicable, (A) all previously earned and
accrued but unpaid Base Salary up to the date of such termination and for
eighteen (18) months following the date of such termination determined for such
period pursuant to the terms of Section 7(c)(ii) above, and (B) an amount equal
to his Bonus for the year preceding the Termination Year, proportionately
reduced based upon the number of days remaining in the Termination Year after
the date of Termination; provided in each case, however, that neither Executive
nor his estate shall be entitled to any further Base Salary or any Bonus or
Benefits for that year or any future year.
(iv) Resignation. If the Employment Period terminates as a
result of Executive's voluntary resignation, the Executive shall be entitled to
his Base Salary through the date of termination, but shall not be entitled to
any further Base Salary or any Bonus or Benefits for that year or any future
year, or to any severance compensation of any kind, nature or amount.
(v) Termination Without Cause. Subject to paragraph 7(d)(vi),
if the Employment Period is terminated other than pursuant to paragraphs (ii),
(iii), or (iv) above,
-11-
Executive shall be entitled to (A) all previously earned and accrued but unpaid
Base Salary up to the date of such termination, and for eighteen (18) months
following the date of such termination determined for such period pursuant to
the terms of Section 7(c)(ii) above, and (B) an amount equal to his Bonus for
the year preceding the Termination Year, proportionately reduced based upon the
number of days remaining in the Termination Year after the date of Termination;
provided in each case, however, that the Executive shall not be entitled to any
further Base Salary or any Bonus or Benefits for that year or any future year.
(vi) Executive agrees that Executive shall be entitled to the
payments provided for in paragraph 7(d)(v) if and only if Executive has not
breached as of the date of termination of the Employment Period the provisions
of Sections 8, 9 and 10 hereof and does not breach such sections at any time
during the period for which such payments are to be made; provided, that the
Company's obligation to make such payments will terminate upon the occurrence of
any such breach during such severance period.
(vii) Any payments pursuant to this Section 7(d) shall be made
in monthly installments on the payment dates on which Executive's Base Salary
would have otherwise been paid if the Employment Period had continued, and as of
the date of the final such payment none of the Company, or any of its
Subsidiaries shall have any further obligation to Executive pursuant to this
Section 7(d) except as provided by law. In the event that the Company fails to
tender to the Executive two (2) payments pursuant to this Section 7(d) within
five Business Days of when such payment was due pursuant to the terms of the
preceding sentence (each an "Untendered Severance Payment"), the Company shall
accelerate all remaining payments due to the Executive pursuant to this Section
7(d) (the "Accelerated Severance Payments"). The Accelerated Severance Payments
shall be payable by the Company to the Executive in one installment no later
than five Business Days following the date that the last Untendered Severance
Payment was due to be paid to the Executive.
(viii) Executive hereby agrees that no severance compensation
of any kind, nature or amount shall be payable to Executive except as expressly
set forth in this Section 7(d), and except for such payments, Executive hereby
irrevocably waives any claim for severance compensation.
(ix) All of Executive's rights to Benefits and Bonuses
hereunder (if any) accruing after the termination of the Employment Period shall
cease upon such termination.
(x) All obligations of the Company to the Executives under
this Section 7 will be deemed the joint and several obligations of the Company
and GCI.
8. Confidential Information. The Executive acknowledges that the
information, observations and data obtained by him while employed by the Company
or any of its Subsidiaries concerning the business or affairs of the Company or
any Subsidiary ("Confidential Information") are the property of the Company or
such Subsidiary. Therefore, Executive agrees that he shall not disclose to any
unauthorized person or use for his own account any Confidential Information
without the prior written consent of the Board, unless and to the extent that
the aforementioned matters become generally known to and available for use by
the public other than as a result of Executive's acts or omissions to act.
Executive shall deliver to the Company at the termination of such
-12-
Executive's employment, or at any other time the Company may request, all
memoranda, notes, plans, records, reports, computer tapes and software and other
documents and data (and copies thereof) relating to the Confidential
Information, Work Product (as defined below) and the business of the Company or
any Subsidiary which he may then possess or have under his control.
9. Inventions and Patents. Executive agrees that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports, and all similar or related information which relates to the Company's
or any of its Subsidiaries' actual or anticipated business, research and
development or existing or future products or services and which are conceived,
developed or made by Executive while employed by the Company or any of its
Subsidiaries ("Work Product") belong to the Company or such Subsidiary.
Executive will promptly disclose such Work Product to the Board and perform all
actions reasonably requested by the Board (whether during or after Executive's
employment period) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other instruments).
10. Non-compete, Non-solicitation.
(a) Executive acknowledges that in the course of his employment with
the Company and its Subsidiaries he has become familiar, and he will become
familiar, with the Company's and its Subsidiaries' trade secrets and with other
Confidential Information and that his services have been and will be of special,
unique and extraordinary value to the Company and its Subsidiaries. Therefore,
Executive agrees that, during the time he is employed by the Company and its
Subsidiaries and for eighteen months thereafter if the Executive is entitled to
receive any payments pursuant to the terms of Section 7(d) hereof (the
"Noncompete Period"), he shall not directly or indirectly own, operate, manage,
control, participate in, consult with, advise, services for, or in any manner
engage in any business (including by himself or in association with any person,
firm, corporate or other business organization or through any other entity) in
competition with, or potential competition with, the businesses of the Company
or its Subsidiaries as such businesses exist or are in process on the date of
the termination of Executive's employment, within any geographical area in which
the Company or its Subsidiaries engage or plan to engage in such businesses.
Nothing herein shall prohibit Executive from being a passive owner of not more
than 2% of the outstanding stock of a corporation which is publicly traded, so
long as Executive has no active participation in the business of such
corporation. For purposes of this Section 10(a), the Non- Compete Period shall
terminate and the Executive shall be released from his obligations under this
Section 10(a), if at any time after a Termination an Executive who is eligible
to receive payments pursuant to the terms of Section 7(d) hereof irrevocably and
unconditionally waives in writing all rights to such payments.
(b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee
of the Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company or
any Subsidiary and any employee thereof, including without limitation, inducing
or attempting to induce any union, employee or group of employees to interfere
with the business or operations of the Company or its Subsidiaries, (ii) hire
any person who was an employee of the Company or any Subsidiary at any time
during the Executive's employment period, or (iii) induce or attempt to induce
any customer, supplier, distributor, franchisee, licensee or other business
relation of the Company or any Subsidiary to cease doing business with the
Company or
-13-
such Subsidiary, or in any way interfere with the relationship between any such
customer, supplier, distributor, franchisee, licensee or business relation and
the Company or any Subsidiary. For purposes of Section 10(b)(ii) and (iii), the
Non-Compete Period shall terminate and the Executive shall be released from his
obligations under Section 10(b)(ii) and (iii) if at any time after a Termination
an Executive who is eligible to receive payments pursuant to the terms of
Section 7(d) hereof irrevocably and unconditionally waives in writing all rights
to such payments.
(c) Executive agrees that: (i) the covenants set forth in this
Section 10 are reasonable in geographical and temporal scope and in all other
respects, (ii) the Company would not have entered into this Agreement but for
the covenants of Executive contained herein, and (iii) the covenants contained
herein have been made in order to induce the Company to enter into this
Agreement.
(d) If, at the time of enforcement of this Section 10, a court shall
hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law.
(e) Executive recognizes and affirms that in the event of his breach
of any provision of this Section 10, money damages would be inadequate and the
Company and CVC would have no adequate remedy at law. Accordingly, Executive
agrees that in the event of a breach or a threatened breach by Executive of any
of the provisions of this Section 10, the Company, in addition and supplementary
to other rights and remedies existing in its favor, may apply to any court of
law or equity of competent jurisdiction for specific performance and/or
injunctive or other relief in order to enforce or prevent any violations of the
provisions hereof (without posting a bond or other security).
11. Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when delivered personally, mailed
by certified or registered mail, return receipt requested and postage prepaid,
or sent via a nationally recognized overnight courier, or sent via facsimile to
the recipient with a confirmation of receipt and accompanied by a certified or
registered mailing. Such notices, demands and other communications will be sent
to the address indicated below:
To the Company:
GCIH, Inc.
531 Main Street
Greenville, S.C. 29602
Attention: President
Telecopy No.: (803) 240-5977
-14-
With a copy to:
Citicorp Venture Capital, Ltd.
399 Park Avenue
14th Floor
New York, NY 10043
Attention: John Weber
Telecopy No.: (212) 888-2940
To the Executive:
c/o Gerber Childrenswear, Inc.
1333 Broadway, 7th Floor
New York, New York 10018
Attention: [Executive]
Telecopy No.: (212) 268-7364
With a copy to:
[Executive's Counsel]
---------------------
---------------------
---------------------
Attention: _________
Telecopy No.: _______
To CVC:
Citicorp Venture Capital
399 Park Avenue
14th Floor
New York, NY 10043
Attention: John Weber
Telecopy No.: (212) 888-2940
With a copy to:
Kirkland & Ellis
153 East 53rd Street
New York, NY 10022
Attention: Kirk A. Radke, Esq.
Telecopy No.: (212) 446-4900
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.
-15-
12. Miscellaneous.
(a) Transfers in Violation of Agreement. Any Transfer or attempted
Transfer of any Executive Stock in violation of any provision of this Agreement
shall be null and void, and the Company shall not record such Transfer on its
books or treat any purported transferee of such Executive Stock as the owner of
such securities for any purpose.
(b) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(c) Complete Agreement. This Agreement, the Stockholders Agreement,
the Registration Rights Agreement and the Letter Agreement dated as of January
22, 1996 between the Executive, the Company and CVC embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(d) Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(e) Successors and Assigns. Except as otherwise provided herein,
this Agreement shall bind and inure to the benefit of and be enforceable by the
Executive, the Company, CVC and their respective successors and assigns
(including subsequent holders of Executive Stock); provided that the rights and
obligations of the Executive under this Agreement shall not be assignable except
in connection with a permitted transfer of Executive Stock hereunder.
(f) Third Party Beneficiary. This Agreement is intended for the
benefit of, and will be enforceable by, CVC.
(g) Governing Law. The corporate law of the State of Delaware will
govern all questions concerning the relative rights of the Company and its
stockholders. All other questions con cerning the construction, validity and
interpretation of this Agreement and the exhibits hereto will be governed by and
construed in accordance with the domestic laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York.
(h) Remedies. Each of the parties to this Agreement (including CVC)
will be entitled to enforce its rights under this Agreement specifically, to
recover damages and costs (including reasonable attorneys' fees) caused by any
breach of any provision of this Agreement and to exercise all other rights
existing in its favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement
-16-
and that any party may in its sole discretion apply to any court of law or
equity of competent jurisdiction (without posting any bond or deposit) for
specific performance and/or other injunctive relief in order to enforce or
prevent any violations of the provisions of this Agreement.
(i) Amendment and Waiver. The provisions of this Agreement may be
amended and waived only with the prior written consent of the Company, the
Executive and CVC.
* * * * *
-17-
IN WITNESS WHEREOF, the parties hereto have executed this Executive
Stock Purchase Agreement as of the date first written above.
GCIH, INC.
By: /s/ Richard Solar
---------------------------------
Name: Richard Solar
Title: Senior Vice President
GERBER CHILDRENSWEAR, INC.
By: /s/ David H. Jones
---------------------------------
Name: David H. Jones
Title: President
---------------------------------
[EXECUTIVE]
Agreed and Accepted:
CITICORP VENTURE CAPITAL, LTD.
By:
-----------
Name:
Title:
CONSENT OF SPOUSE
The undersigned spouse of the Executive named in the attached
Agreement has read and understands the terms of the Agreement and has had an
opportunity to discuss it with individuals of her choice. The undersigned
understands that even if the securities referred to in the Agreement are
considered to be a part of the "marital property" belonging to her and the
Executive, the Agreement restricts the transfer or distribution of those
securities to anyone other than the Executive, a "Permitted Transferee" as such
term is defined in the Stockholders Agreement, the company which issued the
securities and certain other persons. The undersigned agrees to these
restrictions and waives any rights (other than to the economic value of such
securities) she might otherwise have in those shares as specifically
identifiable property.
------------------
(Signature)
------------------
(Print Name)
-19-
EXHIBIT A
______, 1996
ELECTION TO INCLUDE STOCK AND NOTES IN GROSS
INCOME PURSUANT TO SECTION 83(b) OF THE
INTERNAL REVENUE CODE
The undersigned purchased shares of Common Stock, par value $0.01
per share (the "Shares"), of GCIH, Inc. (the "Company") on January __, 1996.
Under certain circumstances, the Company has the right to repurchase the Shares
at cost from the undersigned (or from the holder of the Shares, if different
from the undersigned) should the undersigned cease to be employed by the Company
and its subsidiaries. Hence, the Shares are subject to a substantial risk of
forfeiture and are non-transferable. The undersigned desires to make an election
to have the Shares taxed under the provision of Code ss.83(b) at the time he
purchased the Securities.
Therefore, pursuant to Code ss.83(b) and Treasury Regula tion
ss.1.83-2 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Shares (described below), to report as taxable income for
calendar year 1996 the excess (if any) of the Shares' fair market value on
January __, 1996 over the purchase price thereof.
The following information is supplied in accordance with Treasury
Regulation ss.1.83-2(e):
1. The name, address and social security number of the
undersigned:
Name:
-------------------------------
Address:
---------------------------------
---------------------------------
SSN:
---------------------------------
2. A description of the property with respect to which the election
is being made: _________ shares of GCIH, Inc. Common Stock, par value $0.01 per
share.
3. The date on which the property was transferred: January ___,
1996. The taxable year for which such election is made: calendar 1996.
4. The restrictions to which the property is subject: If during the
first five years after the purchase of the Shares the undersigned ceases to be
employed by the Company or any of its subsidiaries, the unvested portion of the
Shares will be subject to repurchase by the Company at cost, and at any time
prior to a public offering by the Company or a sale of the Company the
undersigned ceases to be employed by the Company or any of its subsidiaries, the
vested portion of the Shares will be subject to repurchase by the Company at
book value. One-fifth of the Shares will become vested shares on each of the
first five anniversary dates of the purchase of the Shares.
5. The fair market value on January __, 1996 of the property with
respect to which the election is being made, determined without regard to any
lapse restrictions: $1.00 per Share.
6. The amount paid for such property: $1.00 per Share.
A copy of this election has been furnished to the Secretary of the
Company pursuant to Treasury Regulations ss.1.83-2(e)(7).
Dated: _____________, 199 __________________________
Name: [Executive]
-2-
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-1’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 1/22/01 | | 11 | | | | | None on these Dates |
| Filed on: | | 3/4/98 |
| | 12/31/96 | | 10 |
| | 1/22/96 | | 1 | | 16 |
| | 12/14/95 | | 1 |
| List all Filings |
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