Exhibit 10.8

 

[FORM OF]

 

MANAGEMENT STOCKHOLDER’S AGREEMENT

 

This Management Stockholder’s Agreement (this “Agreement”) is entered into as of
August 20, 2004 (the “Effective Date”) between PanAmSat Corporation, a Delaware
corporation (the “Company”), and the undersigned person (the “Management
Stockholder”) (the Company and the Management Stockholder being hereinafter
collectively referred to as the “Parties”).  All capitalized terms not
immediately defined are hereinafter defined in Section 7(b) of this Agreement.

 

WHEREAS, the Company has entered into that certain Transaction Agreement, dated
as of April 20, 2004 (the “Transaction Agreement”), by and among Constellation,
LLC, a Delaware limited liability company (“Constellation”), the Company, The
DIRECTV Group, Inc., a Delaware corporation, and PAS Merger Sub, Inc., a
Delaware corporation, pursuant to which Constellation will acquire all of the
outstanding shares of common stock, par value $0.01 per share, of the Company
(the “Common Stock”);

 

WHEREAS, on May 17, 2004, Constellation entered into letter agreements with
Carlyle PanAmSat I, L.L.C. and Carlyle PanAmSat II, L.L.C. (together,
“Carlyle”), on the one hand, and with PEP PAS, LLC and PEOP PAS, LLC (together,
“Providence”), on the other hand, pursuant to which Constellation assigned to
each of Carlyle and Providence the right under the Transaction Agreement to
purchase shares of Common Stock at the same price per share to be paid by
Constellation at the Stock Purchase Closing (as defined in the Transaction
Agreement), and following the Stock Purchase Closing, Constellation shall
beneficially own approximately 44.44% of the Common Stock, and Carlyle and
Providence (together with Constellation, the “Investors”) shall each
beneficially own approximately 27.41% of the Common Stock;

 

WHEREAS, in connection with the Stock Purchase Closing, the Management
Stockholder has entered into a Rollover Agreement with the Company, such
agreement dated as of the date hereof (the “Rollover Agreement”), pursuant to
which the Management Stockholder and the Company agreed that certain options to
acquire shares of Common Stock held by the Management Stockholder and granted
pursuant to the PanAmSat Corporation 1997 Long-Term Incentive Plan (the “1997
Plan”), will be retained by the Management Stockholder after the Stock Purchase
Closing (the “Rollover Option”) and certain unvested restricted stock units will
be retained by the Management Stockholder (“Rollover Equity”);

 

WHEREAS, the Management Stockholder shall, as of the date hereof, receive an
option to purchase shares of Common Stock (the “New Option”, together with the
Rollover Option, the “Option”) pursuant to the terms set forth below and the
terms of the 2004 Stock Option Plan for Key Employees of PanAmSat Corporation
and Its Subsidiaries (the “Option Plan”) and the Stock Option Agreement, dated
as of the date hereof, entered into by and between the Company and the
Management Stockholder (the “Stock Option Agreement”);

 

WHEREAS, in connection with the Stock Purchase Closing, the Management
Stockholder has been selected by the Company to purchase
[                      ] shares of Common Stock (the “New Stock”, together with
the Rollover Equity, the “Purchased Stock”) at $21.84453771 per share, pursuant
to the terms set forth below;

 

--------------------------------------------------------------------------------

 

WHEREAS, within five (5) days of the Stock Purchase Closing, the Company shall
effect a stock split resulting in a Base Price (as defined below) of $5.00 per
share; 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 the Company and other individuals who are or will be key
employees of the Company or one of its subsidiaries (collectively, the “Other
Management Stockholders”).

 

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

 

1.             ISSUANCE OF NEW OPTION; ROLLOVER OPTION; PURCHASED STOCK;
PURCHASES OF ADDITIONAL COMMON STOCK

 

(A)           SUBJECT TO THE TERMS AND CONDITIONS HEREINAFTER SET FORTH AND AS
SET FORTH IN THE OPTION PLAN, AS OF THE EFFECTIVE DATE THE COMPANY IS ISSUING TO
THE MANAGEMENT STOCKHOLDER A NEW OPTION TO ACQUIRE SHARES OF COMMON STOCK, AT AN
INITIAL EXERCISE PRICE EQUAL TO $21.84453771 PER SHARE (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.

 

(B)           PURSUANT TO THE TERMS OF THE ROLLOVER AGREEMENT, THE ROLLOVER
OPTION HELD BY THE MANAGEMENT STOCKHOLDER SET FORTH ON SCHEDULE A HERETO SHALL
REMAIN ISSUED AND OUTSTANDING PURSUANT TO THE TERMS OF THE 1997 PLAN, AS
MODIFIED AS DESCRIBED IN THE ROLLOVER AGREEMENT.  THE MANAGEMENT STOCKHOLDER
HEREBY AGREES TO RETAIN THE ROLLOVER OPTION AT THE STOCK PURCHASE CLOSING (WHICH
SHALL HEREAFTER BE SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT) AND
NOT TO RECEIVE IN CONNECTION WITH THE STOCK PURCHASE CLOSING THE AMOUNT THAT
WOULD OTHERWISE BE PAYABLE TO THE MANAGEMENT STOCKHOLDER IN RESPECT OF SUCH
ROLLOVER OPTION BY OPERATION OF THE PROVISIONS OF SECTION 1.04 OF THE
TRANSACTION AGREEMENT.

 

(C)           PURSUANT TO THE TERMS OF THE ROLLOVER AGREEMENT THE MANAGEMENT
STOCKHOLDER SHALL RETAIN [                   ] SHARES OF ROLLOVER EQUITY OF THE
COMPANY AT THE STOCK PURCHASE CLOSING.

 

(D)           AS OF THE EFFECTIVE DATE THE MANAGEMENT STOCKHOLDER SHALL
PURCHASE  [                   ] SHARES OF NEW STOCK AT A PRICE OF $21.84453771
PER SHARE FROM THE DIRECTV GROUP, INC.

 

(E)           WITH THE CONSENT OF THE COMPANY, THE MANAGEMENT STOCKHOLDER SHALL
BE ENTITLED TO INVEST FROM TIME TO TIME IN DEFERRED STOCK UNITS AT A PRICE TO BE
ESTABLISHED BY THE COMPANY AT THE TIME OF SUCH INVESTMENT.

 

(F)            THE “EFFECTIVE DATE” SHALL BE THE DATE HEREOF.

 

2.             MANAGEMENT STOCKHOLDER’S REPRESENTATIONS, WARRANTIES AND
AGREEMENTS.

 

(A)           IN ADDITION TO AGREEING TO THE RESTRICTIONS ON TRANSFER OF STOCK
(AS DEFINED IN SECTION 3) SET FORTH IN SECTIONS 3 AND 4, IF THE MANAGEMENT
STOCKHOLDER IS A RULE 405 AFFILIATE, THE MANAGEMENT STOCKHOLDER ALSO AGREES AND
ACKNOWLEDGES THAT HE WILL NOT TRANSFER ANY SHARES OF STOCK UNLESS:

 

2

--------------------------------------------------------------------------------

 

(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 THE COMPANY) SHALL HAVE FURNISHED THE COMPANY WITH AN
OPINION, REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY, 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
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 THE
COMPANY) SHALL HAVE FURNISHED THE COMPANY WITH AN OPINION OR OTHER ADVICE
REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY TO THE EFFECT THAT
SUCH TRANSFER WILL COMPLY WITH THE SECURITIES LAWS OF SUCH JURISDICTION.

 

Notwithstanding the foregoing, the Company 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
made pursuant to Section 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 AUGUST 20, 2004
BETWEEN PANAMSAT CORPORATION (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 THE COMPANY INDICATING THAT THE STOCK IS SUBJECT TO
RESTRICTIONS ON TRANSFER AND APPROPRIATE STOP TRANSFER RESTRICTIONS WILL BE
ISSUED TO THE COMPANY’S TRANSFER AGENT WITH RESPECT TO THE STOCK.  IF THE
MANAGEMENT STOCKHOLDER IS A RULE 405 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

 

3

--------------------------------------------------------------------------------

 

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.

 

(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 THE COMPANY OF SUCH INTENDED DISPOSITION AND SHALL DELIVER TO
THE COMPANY AT OR PRIOR TO THE TIME OF SUCH DISPOSITION SUCH DOCUMENTATION AS
THE COMPANY MAY REASONABLY REQUEST IN CONNECTION WITH SUCH SALE AND, IN THE CASE
OF A DISPOSITION PURSUANT TO RULE 144, SHALL DELIVER TO THE COMPANY 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 ON FORM S-8, S-4 OR ANY
SUCCESSOR OR SIMILAR FORM), 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 THE COMPANY
THAT THE COMPANY HAS FILED OR IMMINENTLY INTENDS TO FILE SUCH REGISTRATION
STATEMENT TO, OR WITHIN 180 DAYS (OR SUCH SHORTER PERIOD AS MAY BE CONSENTED TO
BY THE MANAGING UNDERWRITER OR UNDERWRITERS) IN THE CASE OF THE INITIAL PUBLIC
OFFERING AND NINETY (90) DAYS (OR IN AN UNDERWRITTEN OFFERING SUCH SHORTER
PERIOD AS MAY BE CONSENTED TO BY THE MANAGING UNDERWRITER OR UNDERWRITERS, IF
ANY) IN THE CASE OF ANY OTHER PUBLIC OFFERING AFTER, THE EFFECTIVE DATE OF SUCH
REGISTRATION STATEMENT, UNLESS OTHERWISE AGREED TO IN WRITING BY THE COMPANY.

 

(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
RELATED THERETO, 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,
THE COMPANY AND THE BUSINESS AND PROSPECTS OF THE COMPANY 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 INVESTMENT IN THE STOCK, (III) HE
UNDERSTANDS AND HAS TAKEN COGNIZANCE OF ALL RISK FACTORS RELATED TO THE PURCHASE
OF 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”), AT THE TIME OF EXERCISE, ANY SHARES OF THE COMMON STOCK
ISSUABLE OR ISSUED UPON EXERCISE OF THE OPTIONS

 

4

--------------------------------------------------------------------------------

 

(“OPTION STOCK”; TOGETHER WITH ANY OTHER PURCHASED STOCK AND COMMON STOCK
OTHERWISE ACQUIRED AND/OR HELD BY THE MANAGEMENT STOCKHOLDER ENTITIES, “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 OR 6; (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 THE
COMPANY, INCLUDING WITHOUT LIMITATION A SALE 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 AGREEMENT (AS DEFINED
IN SECTION 7); OR (E) TRANSFERS PERMITTED BY THE BOARD.  NO TRANSFER OF ANY SUCH
SHARES IN VIOLATION HEREOF SHALL BE MADE OR RECORDED ON THE BOOKS OF THE COMPANY
AND ANY SUCH TRANSFER SHALL BE VOID AB INITIO AND OF NO EFFECT.

 

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
(WHICH, FOR THE AVOIDANCE OF DOUBT, SHALL NOT INCLUDE ANY TRANSFERS PURSUANT TO
CLAUSES (Y) AND (Z) OF SECTION 2(A)) (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 THE COMPANY IN WRITING OF
HIS WISH TO ACCEPT THE THIRD PARTY OFFER.  THE MANAGEMENT STOCKHOLDER’S NOTICE
TO THE COMPANY SHALL CONTAIN AN IRREVOCABLE OFFER TO SELL SUCH STOCK TO THE
COMPANY (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 FIFTEEN (15) DAYS AFTER THE DATE OF
THE RECEIPT BY THE COMPANY OF THE MANAGEMENT STOCKHOLDER’S NOTICE, THE COMPANY
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
THIRD PARTY OFFER, PURSUANT TO SECTION 4(B).

 

(B)           THE COMPANY 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 THE COMPANY, AT THE
EQUIVALENT ALL CASH PRICE, DETERMINED IN GOOD FAITH BY THE COMPANY’S 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 THE COMPANY WIRE TRANSFER INSTRUCTIONS) (AND ANY SUCH
NON-CASH CONSIDERATION TO BE PAID) TO THE MANAGEMENT STOCKHOLDER AT THE
PRINCIPAL OFFICE OF THE COMPANY AGAINST DELIVERY OF CERTIFICATES OR OTHER
INSTRUMENTS REPRESENTING THE SHARES OF STOCK SO PURCHASED, APPROPRIATELY
ENDORSED BY THE MANAGEMENT STOCKHOLDER; PROVIDED THAT IF THE MANAGEMENT
STOCKHOLDER DOES NOT AGREE WITH THE BOARD’S DETERMINATION OF “EQUIVALENT ALL
CASH PRICE”, THE MANAGEMENT STOCKHOLDER SHALL HAVE THE RIGHT TO SO NOTIFY THE
COMPANY, THE COMPANY SHALL NOT HAVE THE RIGHT TO PURCHASE SUCH SHARES AND THE
MANAGEMENT STOCKHOLDER SHALL NOT HAVE ANY RIGHT TO SELL SUCH SHARES TO A THIRD
PARTY WITHOUT INITIATING THE PROCESS SET FORTH IN THE FIRST SENTENCE OF
SECTION 4(A).  IF AT THE END OF THE 15-DAY PERIOD, THE COMPANY 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
THE COMPANY OF THE CONSUMMATION THEREOF AND SHALL FURNISH SUCH

 

5

--------------------------------------------------------------------------------

 

EVIDENCE OF THE COMPLETION AND TIME OF COMPLETION OF SUCH SALE AND OF THE TERMS
THEREOF AS MAY REASONABLY BE REQUESTED BY THE COMPANY.  IF, AT THE END OF
SIXTY (60) DAYS FOLLOWING THE EXPIRATION OF THE 15-DAY PERIOD DURING WHICH THE
COMPANY 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,
TO THE EXTENT APPLICABLE, 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 THE COMPANY.

 

(A)           EXCEPT AS OTHERWISE PROVIDED HEREIN, IF, PRIOR TO THE LATER OF THE
FIFTH ANNIVERSARY OF THE EFFECTIVE DATE AND A QUALIFIED PUBLIC OFFERING, THE
MANAGEMENT STOCKHOLDER IS STILL IN THE EMPLOY OF THE COMPANY (AND/OR, IF
APPLICABLE, ITS SUBSIDIARIES) AND THE MANAGEMENT STOCKHOLDER’S EMPLOYMENT IS
TERMINATED AS A RESULT OF THE DEATH OR PERMANENT DISABILITY OF THE MANAGEMENT
STOCKHOLDER, THEN THE APPLICABLE MANAGEMENT STOCKHOLDER ENTITY, SHALL, FOR ONE
YEAR (THE “PUT PERIOD”) FOLLOWING THE DATE OF SUCH TERMINATION FOR DEATH OR
PERMANENT DISABILITY, HAVE THE RIGHT TO:

 

(I)  WITH RESPECT TO THE STOCK, SELL TO THE COMPANY, AND THE COMPANY SHALL BE
REQUIRED TO PURCHASE, ON ONE OCCASION, ALL OF THE SHARES OF STOCK THEN HELD BY
THE APPLICABLE MANAGEMENT STOCKHOLDER ENTITIES AT A PER SHARE PRICE EQUAL TO THE
FAIR MARKET VALUE PER SHARE (THE “SECTION 5 REPURCHASE PRICE”); AND

 

(II)  WITH RESPECT TO ANY OUTSTANDING OPTIONS, SELL TO THE COMPANY, AND THE
COMPANY SHALL BE REQUIRED TO PURCHASE, ON ONE OCCASION, ALL OF THE EXERCISABLE
OPTIONS THEN HELD BY THE APPLICABLE MANAGEMENT STOCKHOLDER ENTITIES FOR AN
AMOUNT EQUAL TO THE PRODUCT OF (X) THE EXCESS, IF ANY, OF THE SECTION 5
REPURCHASE PRICE OVER THE OPTION EXERCISE PRICE AND (Y) THE NUMBER OF
EXERCISABLE OPTION SHARES, WHICH OPTIONS SHALL BE TERMINATED IN EXCHANGE FOR
SUCH PAYMENT.  IN THE EVENT THE FOREGOING OPTION EXCESS PRICE IS ZERO OR A
NEGATIVE NUMBER, ALL OUTSTANDING EXERCISABLE STOCK OPTIONS GRANTED TO THE
MANAGEMENT STOCKHOLDER UNDER THE OPTION PLAN SHALL BE AUTOMATICALLY TERMINATED
WITHOUT ANY PAYMENT IN RESPECT THEREOF.  IN THE EVENT THAT THE MANAGEMENT
STOCKHOLDER ENTITIES DO NOT EXERCISE THE FOREGOING RIGHTS, ALL EXERCISABLE BUT
UNEXERCISED OPTIONS SHALL TERMINATE PURSUANT TO THE TERMS OF SECTION 3.2(B) OF
THE STOCK OPTION AGREEMENT.  ALL UNEXERCISABLE OPTIONS HELD BY THE APPLICABLE
MANAGEMENT STOCKHOLDER ENTITIES SHALL TERMINATE WITHOUT PAYMENT IMMEDIATELY UPON
TERMINATION OF EMPLOYMENT.

 

(B)           IN THE EVENT THE APPLICABLE MANAGEMENT STOCKHOLDER ENTITIES INTEND
TO EXERCISE THEIR RIGHTS PURSUANT TO SECTION 5(A), SUCH MANAGEMENT STOCKHOLDER
ENTITIES SHALL SEND WRITTEN NOTICE TO THE COMPANY, 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)(I) AND/OR TO SELL SUCH OPTIONS IN EXCHANGE FOR THE
PAYMENT REFERRED TO IN SECTION 5(A)(II) AND SHALL INDICATE THE NUMBER OF SHARES
OF STOCK TO BE SOLD AND THE NUMBER OF OPTIONS TO BE SOLD WITH PAYMENT IN RESPECT
THEREOF (THE “REDEMPTION NOTICE”).  THE COMPLETION OF THE PURCHASES SHALL TAKE
PLACE AT THE PRINCIPAL OFFICE OF THE COMPANY ON THE TENTH BUSINESS DAY AFTER THE
GIVING OF THE REDEMPTION NOTICE.  THE APPLICABLE REPURCHASE PRICE (INCLUDING ANY
PAYMENT WITH RESPECT TO

 

6

--------------------------------------------------------------------------------

 

THE OPTIONS AS DESCRIBED ABOVE) 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 THE COMPANY WIRE TRANSFER
INSTRUCTIONS), AGAINST DELIVERY OF CERTIFICATES OR OTHER INSTRUMENTS
REPRESENTING THE STOCK SO PURCHASED AND APPROPRIATE DOCUMENTS CANCELLING THE
OPTIONS SO TERMINATED APPROPRIATELY ENDORSED OR EXECUTED BY THE APPLICABLE
MANAGEMENT STOCKHOLDER ENTITIES OR ANY DULY AUTHORIZED REPRESENTATIVE.

 

(C)           NOTWITHSTANDING ANYTHING IN SECTION 5(A) TO THE CONTRARY AND
SUBJECT TO SECTION 10(A), IF THERE EXISTS AND IS CONTINUING A DEFAULT OR AN
EVENT OF DEFAULT ON THE PART OF THE COMPANY OR ANY SUBSIDIARY OF THE COMPANY
UNDER ANY LOAN, GUARANTEE OR OTHER AGREEMENT UNDER WHICH THE COMPANY OR ANY
SUBSIDIARY OF THE COMPANY HAS BORROWED MONEY OR IF THE REPURCHASE REFERRED TO IN
SECTION 5(A) WOULD RESULT IN A DEFAULT OR AN EVENT OF DEFAULT ON THE PART OF THE
COMPANY OR ANY SUBSIDIARY OF THE COMPANY UNDER ANY SUCH AGREEMENT OR IF A
REPURCHASE WOULD NOT BE PERMITTED UNDER SECTION 170 OF THE DELAWARE GENERAL
CORPORATION LAW (THE “DGCL”) OR WOULD OTHERWISE VIOLATE THE DGCL (OR IF THE
COMPANY REINCORPORATES IN ANOTHER STATE, THE BUSINESS CORPORATION LAW OF SUCH
STATE) (EACH SUCH OCCURRENCE BEING AN “EVENT”), THE COMPANY SHALL NOT BE
OBLIGATED TO REPURCHASE ANY OF THE STOCK OR THE OPTIONS FROM THE APPLICABLE
MANAGEMENT STOCKHOLDER ENTITIES UNTIL THE FIRST BUSINESS DAY WHICH IS TEN (10)
CALENDAR DAYS AFTER ALL OF THE FOREGOING EVENTS HAVE CEASED TO EXIST (THE
“REPURCHASE ELIGIBILITY DATE”); PROVIDED, HOWEVER, THAT (I) THE NUMBER OF SHARES
OF STOCK SUBJECT TO REPURCHASE UNDER THIS SECTION 5(C) SHALL BE THAT NUMBER OF
SHARES OF STOCK, AND (II) IN THE CASE OF A REPURCHASE PURSUANT TO
SECTION 5(A)(II), THE NUMBER OF EXERCISABLE OPTION SHARES FOR PURPOSES OF
CALCULATING THE OPTION EXCESS PRICE PAYABLE UNDER THIS SECTION 5(C) SHALL BE THE
NUMBER OF EXERCISABLE OPTION SHARES, IN EACH CASE AS SPECIFIED IN THE REDEMPTION
NOTICE AND HELD BY THE APPLICABLE MANAGEMENT STOCKHOLDER ENTITIES AT THE TIME OF
DELIVERY OF THE REDEMPTION NOTICE IN ACCORDANCE WITH SECTION 5(B) HEREOF.  ALL
OPTIONS EXERCISABLE AS OF THE DATE OF A REDEMPTION NOTICE, IN THE CASE OF A
REPURCHASE PURSUANT TO SECTION 5(A), SHALL CONTINUE TO BE EXERCISABLE UNTIL THE
ACTUAL REPURCHASE OF SUCH OPTIONS PURSUANT TO SUCH REDEMPTION NOTICE, PROVIDED
THAT TO THE EXTENT ANY OPTIONS ARE EXERCISED AFTER THE DATE OF SUCH REDEMPTION
NOTICE, THE NUMBER OF EXERCISABLE OPTION SHARES FOR PURPOSES OF CALCULATING THE
OPTION EXCESS PRICE SHALL BE REDUCED ACCORDINGLY.  NOTWITHSTANDING THE FOREGOING
AND SUBJECT TO SECTION 6(D), IF AN EVENT EXISTS AND IS CONTINUING FOR
NINETY (90) DAYS, THE MANAGEMENT STOCKHOLDER ENTITIES SHALL BE PERMITTED BY
WRITTEN NOTICE TO RESCIND ANY REDEMPTION NOTICE.

 

(D)           EFFECT OF CHANGE IN CONTROL.  NOTWITHSTANDING ANYTHING IN THIS
AGREEMENT TO THE CONTRARY, EXCEPT FOR ANY PAYMENT OBLIGATION OF THE COMPANY
WHICH HAS ARISEN PRIOR TO SUCH TERMINATION PURSUANT TO THIS SECTION 5(D), THIS
SECTION 5 SHALL TERMINATE AND BE OF NO FURTHER FORCE OR EFFECT UPON THE
OCCURRENCE OF A CHANGE IN CONTROL.

 

6.                                           THE COMPANY’S OPTION TO PURCHASE
STOCK AND OPTIONS OF MANAGEMENT STOCKHOLDER UPON CERTAIN TERMINATIONS OF
EMPLOYMENT.

 

(A)           TERMINATION FOR CAUSE BY THE COMPANY, TERMINATION BY THE
MANAGEMENT STOCKHOLDER WITHOUT GOOD REASON AND OTHER CALL EVENTS.  EXCEPT AS
OTHERWISE PROVIDED HEREIN, IF, PRIOR TO THE FIFTH ANNIVERSARY OF THE EFFECTIVE
DATE, (I) THE MANAGEMENT STOCKHOLDER’S ACTIVE EMPLOYMENT WITH THE COMPANY
(AND/OR, IF APPLICABLE, ITS SUBSIDIARIES) IS TERMINATED BY THE COMPANY (AND/OR,
IF APPLICABLE, ITS SUBSIDIARIES) FOR CAUSE, (II) THE MANAGEMENT STOCKHOLDER’S
ACTIVE EMPLOYMENT WITH THE COMPANY (AND/OR, IF APPLICABLE, ITS SUBSIDIARIES) IS
TERMINATED BY THE MANAGEMENT STOCKHOLDER WITHOUT GOOD REASON, (III) THE

 

7

--------------------------------------------------------------------------------

 

BENEFICIARIES OF A MANAGEMENT STOCKHOLDER’S TRUST SHALL INCLUDE ANY PERSON OR
ENTITY OTHER THAN THE MANAGEMENT STOCKHOLDER, HIS SPOUSE (OR EX-SPOUSE) OR HIS
LINEAL DESCENDANTS (INCLUDING ADOPTED CHILDREN) OR (IV) THE MANAGEMENT
STOCKHOLDER SHALL OTHERWISE EFFECT A TRANSFER OF ANY OF THE STOCK OTHER THAN AS
PERMITTED IN THIS AGREEMENT (OTHER THAN AS MAY BE REQUIRED BY APPLICABLE LAW OR
AN ORDER OF A COURT HAVING COMPETENT JURISDICTION) AFTER NOTICE FROM THE COMPANY
OF SUCH IMPERMISSIBLE TRANSFER AND A REASONABLE OPPORTUNITY TO CURE SUCH
TRANSFER (EACH, A “SECTION 6(A) CALL EVENT”):

 

(A)          WITH RESPECT TO THE STOCK, THE COMPANY MAY PURCHASE ALL OR ANY
PORTION OF THE SHARES OF THE STOCK THEN HELD BY THE APPLICABLE MANAGEMENT
STOCKHOLDER ENTITIES AT A PER SHARE PURCHASE PRICE EQUAL TO THE LESSER OF
(X) THE FAIR MARKET VALUE PER SHARE AND (Y) THE BOOK VALUE PER SHARE (ANY SUCH
APPLICABLE REPURCHASE PRICE, THE “SECTION 6(A) REPURCHASE PRICE”); AND

 

(B)           WITH RESPECT TO THE OPTIONS (OTHER THAN THE ROLLOVER OPTIONS) IF
THE EVENT DESCRIBED IN CLAUSE 6(A)(I), (III) OR (IV) HAS OCCURRED, ALL SUCH
OPTIONS (WHETHER OR NOT THEN EXERCISABLE) HELD BY THE APPLICABLE MANAGEMENT
STOCKHOLDER ENTITIES WILL TERMINATE IMMEDIATELY WITHOUT PAYMENT IN RESPECT
THEREOF; AND

 

(C)           With respect to the Options if the event described in
clause 6(a)(ii) has occurred, the Company may purchase all or any portion of the
exercisable Options held by the applicable Management Stockholder Entities for
an amount equal to the product of (x) the excess, if any, of the Section 6(a)
Repurchase Price over the Option Exercise Price and (y) the number of
Exercisable Option Shares, which Options shall be terminated in exchange for
such payment.  In the event the foregoing Option Excess Price is zero or a
negative number, all outstanding exercisable stock options granted to the
Management Stockholder under the Option Plan shall be automatically terminated
without any payment in respect thereof.  In the event that the Company does not
exercise the foregoing rights, all exercisable but unexercised Options shall
terminate pursuant to the terms of Section 3.2(f) of the Stock Option
Agreement.  All unexercisable Options held by the applicable Management
Stockholder Entities shall also terminate without payment immediately upon
termination of employment.

 

(B)           TERMINATION WITHOUT CAUSE BY THE COMPANY, AND TERMINATION BY THE
MANAGEMENT STOCKHOLDER WITH GOOD REASON.  EXCEPT AS OTHERWISE PROVIDED HEREIN,
IF, PRIOR TO THE FIFTH ANNIVERSARY OF THE EFFECTIVE DATE, (I) THE MANAGEMENT
STOCKHOLDER’S ACTIVE EMPLOYMENT WITH THE COMPANY (AND/OR, IF APPLICABLE, ITS
SUBSIDIARIES) IS TERMINATED BY THE COMPANY (AND/OR, IF APPLICABLE, ITS
SUBSIDIARIES) WITHOUT CAUSE, OR (II) THE MANAGEMENT STOCKHOLDER’S ACTIVE
EMPLOYMENT WITH THE COMPANY (AND/OR, IF APPLICABLE, ITS SUBSIDIARIES) IS
TERMINATED BY THE MANAGEMENT STOCKHOLDER WITH GOOD REASON, (EACH, A
“SECTION 6(B) CALL EVENT”):

 

(A)          WITH RESPECT TO THE STOCK, THE COMPANY MAY PURCHASE ALL OR ANY
PORTION OF THE SHARES OF THE STOCK THEN HELD BY THE APPLICABLE MANAGEMENT
STOCKHOLDER ENTITIES AT A PER SHARE PURCHASE PRICE EQUAL TO: (I) IN THE CASE OF
OPTION STOCK, THE BOOK VALUE PER SHARE (OR AFTER A PUBLIC OFFERING, MARKET VALUE
PER SHARE), OR (II) IN THE CASE OF ANY OTHER COMMON STOCK OTHERWISE ACQUIRED
AND/OR HELD BY THE MANAGEMENT STOCKHOLDER ENTITIES, THE FAIR MARKET VALUE PER
SHARE; AND

 

(B)           WITH RESPECT TO THE OPTIONS, THE COMPANY MAY PURCHASE ALL OR ANY
PORTION OF THE EXERCISABLE OPTIONS HELD BY THE APPLICABLE MANAGEMENT STOCKHOLDER
ENTITIES FOR AN AMOUNT EQUAL TO THE PRODUCT OF (X) THE EXCESS, IF ANY, OF THE
PRICE EQUAL TO THE

 

8

--------------------------------------------------------------------------------

 

BOOK VALUE PER SHARE (OR AFTER A PUBLIC OFFERING, MARKET VALUE PER SHARE) OVER
THE OPTION EXERCISE PRICE AND (Y) THE NUMBER OF EXERCISABLE OPTION SHARES, WHICH
OPTIONS SHALL BE TERMINATED IN EXCHANGE FOR SUCH PAYMENT.  IN THE EVENT THE
FOREGOING OPTION EXCESS PRICE IS ZERO OR A NEGATIVE NUMBER, ALL OUTSTANDING
EXERCISABLE STOCK OPTIONS GRANTED TO THE MANAGEMENT STOCKHOLDER UNDER THE OPTION
PLAN SHALL BE AUTOMATICALLY TERMINATED WITHOUT ANY PAYMENT IN RESPECT THEREOF. 
IN THE EVENT THAT THE COMPANY DOES NOT EXERCISE THE FOREGOING RIGHTS, ALL
EXERCISABLE BUT UNEXERCISED OPTIONS SHALL TERMINATE PURSUANT TO THE TERMS OF
SECTION 3.2(D) OR (E), AS THE CASE MAY BE, OF THE STOCK OPTION AGREEMENT;
PROVIDED, HOWEVER, THAT, NOTWITHSTANDING ANYTHING CONTAINED IN THE 1997 PLAN OR
THE APPLICABLE ROLLOVER OPTION STOCK OPTION AGREEMENT TO THE CONTRARY, IN THE
EVENT OF TERMINATION OF THE MANAGEMENT STOCKHOLDER’S EMPLOYMENT BY THE COMPANY
WITHOUT CAUSE OR BY THE MANAGEMENT STOCKHOLDER WITH GOOD REASON, ALL EXERCISABLE
BUT UNEXERCISED ROLLOVER OPTIONS SHALL TERMINATE 10 YEARS AFTER THE GRANT DATE. 
ALL UNEXERCISABLE OPTIONS HELD BY THE APPLICABLE MANAGEMENT STOCKHOLDER ENTITIES
SHALL ALSO TERMINATE WITHOUT PAYMENT IMMEDIATELY UPON TERMINATION OF EMPLOYMENT.

 

(C)           TERMINATION FOR DEATH OR DISABILITY.  EXCEPT AS OTHERWISE PROVIDED
HEREIN, IF, PRIOR TO THE FIFTH ANNIVERSARY OF THE EFFECTIVE DATE, THE MANAGEMENT
STOCKHOLDER’S EMPLOYMENT WITH THE COMPANY (AND/OR, IF APPLICABLE, ITS
SUBSIDIARIES) IS TERMINATED AS A RESULT OF THE DEATH OR PERMANENT DISABILITY OF
THE MANAGEMENT STOCKHOLDER (EACH A “SECTION 6(C) CALL EVENT”), THEN THE COMPANY
MAY:

 

(A)          WITH RESPECT TO THE STOCK, PURCHASE ALL OR ANY PORTION OF THE
SHARES OF STOCK THEN HELD BY THE APPLICABLE MANAGEMENT STOCKHOLDER ENTITIES AT A
PER SHARE PRICE EQUAL TO THE FAIR MARKET VALUE PER SHARE; AND

 

(B)           WITH RESPECT TO THE OPTIONS, PURCHASE ALL OR ANY PORTION OF THE
EXERCISABLE OPTIONS FOR AN AMOUNT EQUAL TO THE PRODUCT OF (X) THE EXCESS, IF
ANY, OF THE FAIR MARKET VALUE PER SHARE OVER THE OPTION EXERCISE PRICE AND
(Y) THE NUMBER OF EXERCISABLE OPTION SHARES, WHICH OPTIONS SHALL BE TERMINATED
IN EXCHANGE FOR SUCH PAYMENT.  IN THE EVENT THE FOREGOING OPTION EXCESS PRICE IS
ZERO OR A NEGATIVE NUMBER, ALL OUTSTANDING EXERCISABLE STOCK OPTIONS GRANTED TO
THE MANAGEMENT STOCKHOLDER UNDER THE OPTION PLAN SHALL BE AUTOMATICALLY
TERMINATED WITHOUT ANY PAYMENT IN RESPECT THEREOF.  IN THE EVENT THAT THE
COMPANY DOES NOT EXERCISE THE FOREGOING RIGHTS ALL EXERCISABLE BUT UNEXERCISED
OPTIONS (OTHER THAN THE ROLLOVER OPTIONS) SHALL TERMINATE PURSUANT TO THE TERMS
OF SECTION 3.2(B) OF THE STOCK OPTION AGREEMENT.  ALL UNEXERCISABLE OPTIONS HELD
BY THE APPLICABLE MANAGEMENT STOCKHOLDER ENTITIES SHALL ALSO TERMINATE WITHOUT
PAYMENT IMMEDIATELY UPON TERMINATION OF EMPLOYMENT.

 

(D)           CALL NOTICE.  THE COMPANY SHALL HAVE A PERIOD OF (I) SIXTY (60)
DAYS FROM THE DATE OF ANY CALL EVENT (OR, IF LATER, WITH RESPECT TO A
SECTION 6(A) CALL EVENT, THE DATE AFTER DISCOVERY OF, AND THE APPLICABLE CURE
PERIOD FOR, AN IMPERMISSIBLE TRANSFER CONSTITUTING A SECTION 6(A) CALL EVENT)
AND (II) THIRTY (30) DAYS FROM THE DATE THE MANAGEMENT STOCKHOLDER RESCINDS A
REDEMPTION NOTICE PURSUANT TO THE LAST SENTENCE OF SECTION 5(C), IN WHICH TO
GIVE NOTICE IN WRITING TO THE MANAGEMENT STOCKHOLDER OF ITS ELECTION TO EXERCISE
ITS RIGHTS AND OBLIGATIONS PURSUANT TO THIS SECTION 6 (“REPURCHASE NOTICE”). 
THE COMPLETION OF THE PURCHASES PURSUANT TO THE FOREGOING SHALL TAKE PLACE AT
THE PRINCIPAL OFFICE OF THE COMPANY ON THE TENTH BUSINESS DAY AFTER THE GIVING
OF THE CALL NOTICE.  THE APPLICABLE REPURCHASE PRICE (INCLUDING ANY PAYMENT WITH
RESPECT TO THE OPTIONS AS DESCRIBED IN THIS SECTION 6) 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

 

9

--------------------------------------------------------------------------------

 

MANAGEMENT STOCKHOLDER ENTITIES PROVIDE TO THE COMPANY WIRE TRANSFER
INSTRUCTIONS) AGAINST DELIVERY OF CERTIFICATES OR OTHER INSTRUMENTS REPRESENTING
THE STOCK SO PURCHASED AND APPROPRIATE DOCUMENTS CANCELLING THE OPTIONS SO
TERMINATED, APPROPRIATELY ENDORSED OR EXECUTED BY THE APPLICABLE MANAGEMENT
STOCKHOLDER ENTITIES OR ANY DULY AUTHORIZED REPRESENTATIVE.

 

(E)           DELAY OF CALL.  NOTWITHSTANDING ANY OTHER PROVISION OF THIS
SECTION 6 TO THE CONTRARY AND SUBJECT TO SECTION 10(A), IF THERE EXISTS AND IS
CONTINUING ANY EVENT, THE COMPANY SHALL DELAY THE REPURCHASE OF ANY OF THE STOCK
OR THE OPTIONS (PURSUANT TO A CALL NOTICE TIMELY GIVEN IN ACCORDANCE WITH
SECTION 6(D) HEREOF) FROM THE APPLICABLE MANAGEMENT STOCKHOLDER ENTITIES UNTIL
THE REPURCHASE ELIGIBILITY DATE; PROVIDED, HOWEVER, THAT (I) THE NUMBER OF
SHARES OF STOCK SUBJECT TO REPURCHASE UNDER THIS SECTION 6 SHALL BE THAT NUMBER
OF SHARES OF STOCK, AND (II) IN THE CASE OF A REPURCHASE PURSUANT TO
SECTION 6(A), 6(B) OR 6(C), THE NUMBER OF EXERCISABLE OPTION SHARES FOR PURPOSES
OF CALCULATING THE OPTION EXCESS PRICE PAYABLE UNDER THIS SECTION 6 SHALL BE THE
NUMBER OF EXERCISABLE OPTION SHARES, IN EACH CASE HELD BY THE APPLICABLE
MANAGEMENT STOCKHOLDER ENTITIES AT THE TIME OF DELIVERY OF (AND AS SET FORTH IN)
A CALL NOTICE IN ACCORDANCE WITH SECTION 6(D) HEREOF.  ALL OPTIONS EXERCISABLE
AS OF THE DATE OF A REPURCHASE NOTICE, IN THE CASE OF A REPURCHASE PURSUANT TO
SECTION 6(A), 6(B) OR 6(C), SHALL CONTINUE TO BE EXERCISABLE UNTIL THE ACTUAL
REPURCHASE OF SUCH OPTIONS PURSUANT TO SUCH CALL NOTICE, PROVIDED THAT TO THE
EXTENT THAT ANY OPTIONS ARE EXERCISED AFTER THE DATE OF SUCH CALL NOTICE, THE
NUMBER OF EXERCISABLE OPTION SHARES FOR PURPOSES OF CALCULATING THE OPTION
EXCESS PRICE SHALL BE REDUCED ACCORDINGLY.  NOTWITHSTANDING THE FOREGOING, IF AN
EVENT EXISTS AND IS CONTINUING FOR NINETY (90) DAYS, THE MANAGEMENT STOCKHOLDER
ENTITIES SHALL BE PERMITTED BY WRITTEN NOTICE TO CAUSE THE COMPANY TO RESCIND
ANY REPURCHASE NOTICE BUT THE COMPANY SHALL HAVE ANOTHER THIRTY (30) DAYS FROM
THE DATE THE EVENT CEASES TO EXIST TO GIVE ANOTHER REPURCHASE NOTICE ON THE
TERMS APPLICABLE TO THE FIRST REPURCHASE NOTICE.

 

(F)            EFFECT OF CHANGE IN CONTROL.  NOTWITHSTANDING ANYTHING IN THIS
AGREEMENT TO THE CONTRARY, EXCEPT FOR ANY PAYMENT OBLIGATION OF THE COMPANY,
THIS SECTION 6 SHALL TERMINATE AND BE OF NO FURTHER FORCE OR EFFECT UPON THE
OCCURRENCE OF A CHANGE IN CONTROL.

 

7.             ADJUSTMENT OF REPURCHASE PRICE; DEFINITIONS.

 

(A)           ADJUSTMENT OF REPURCHASE PRICE.  IN DETERMINING THE APPLICABLE
REPURCHASE PRICE OF THE STOCK AND OPTIONS, AS PROVIDED FOR IN SECTIONS 5 AND 6,
ABOVE, APPROPRIATE ADJUSTMENTS SHALL BE MADE FOR ANY STOCK DIVIDENDS, SPLITS,
COMBINATIONS, RECAPITALIZATIONS OR ANY OTHER ADJUSTMENT IN THE NUMBER OF
OUTSTANDING SHARES OF STOCK IN ORDER TO MAINTAIN, AS NEARLY AS PRACTICABLE, THE
INTENDED OPERATION OF THE PROVISIONS OF SECTIONS 5 AND 6.

 

(B)           DEFINITIONS.  ALL CAPITALIZED TERMS USED IN THIS AGREEMENT AND NOT
DEFINED HEREIN SHALL HAVE SUCH MEANING AS SUCH TERMS ARE DEFINED IN THE OPTION
PLAN.  TERMS USED HEREIN AND AS LISTED BELOW SHALL BE DEFINED AS FOLLOWS:

 

“Act” shall have the meaning set forth in Section 2(a)(i) hereof.

 

“Agreement” shall have the meaning set forth in the introductory paragraph.

 

“Base Price” shall have the meaning set forth in Section 1(a) hereof.

 

“Board” shall mean the board of directors of the Company.

 

10

--------------------------------------------------------------------------------

 

“Book Value Per Share” shall mean (a) the Base Price plus (b) the quotient of
(A)(i) the aggregate net income of the Company from and after the Effective Date
(as decreased by any net losses from and after the Effective Date) excluding any
one time costs and expenses charged to income associated with the Stock Purchase
Closing and any related transactions plus (ii) the aggregate dollar amount
contributed to (or credited to common stockholders’ equity of) the Company after
the Effective Date as equity of the Company (including consideration that would
be received upon the exercise of all outstanding stock options and other rights
to acquire Common Stock and the conversion of all securities convertible into
Common Stock and other stock equivalents) plus (iii) to the extent reflected as
deductions to Book Value Per Share in clause (i) above, unusual or other items
recognized by the Company (including, without limitation, extraordinary charges,
and one time or accelerated write-offs of good will, net of the related impact
on the provision for income taxes), in each case, if and to the extent
determined in good faith by the Board, plus (iv) the amortization of purchase
accounting adjustments occurring as a result of the Stock Purchase Closing,
minus (v) to the extent reflected as additions to Book Value Per Share in
clause (i) above, unusual or other items recognized by the Company, in each
case, if and to the extent determined in good faith by the Board, minus (vi) the
aggregate dollar amount of any dividends paid by the Company after the Effective
Date, divided by (B) the sum of the number of shares of Common Stock then
outstanding and the number of shares of Common Stock issuable upon the exercise
of all outstanding stock options and other rights to acquire Common Stock.  The
items referred to in the calculations set forth in clauses (b)(A)(i) through
(vi) of the immediately preceding sentence shall be determined in good faith,
and to the extent possible, in accordance with generally accepted accounting
principles applied on a basis consistent with any prior periods as reflected in
the consolidated financial statements of the Company.

 

“Call Events” shall mean, collectively, Section 6(a) Call Events, Section 6(b)
Call Events, and Section 6(c) Call Events.

 

“Call Notice” shall have the meaning set forth in Section 6(d) hereof.

 

“Carlyle” shall have the meaning set forth in the second “whereas” paragraph.

 

“Cause” shall mean “Cause” as such term may be defined in any employment
agreement or change-in-control agreement in effect at the time of termination
between the Management Stockholder and the Company or any of its subsidiaries or
Rule 405 Affiliates; or, if there is no such employment or change in-control
agreement, “Cause” shall mean (i) the Management Stockholder’s willful and
continued failure to perform his or her material duties with respect to the
Company or it subsidiaries which continues beyond ten (10) days after a written
demand for substantial performance is delivered to the Management Stockholder by
the Company (the “Cure Period”), (ii) the willful or intentional engaging by the
Management Stockholder in conduct that causes material and demonstrable injury,
monetarily or otherwise, to the Company, the Investors and its Rule 405
Affiliates, (iii) conviction of, or a plea of nolo contendere to, a crime
constituting (A) a felony under the laws of the United States or any state
thereof or (B) a misdemeanor involving moral turpitude, or (iv) a material
breach of by the Management Stockholder of this Agreement or other agreements,
including, without limitation, engaging in any action in breach of restrictive
covenants, herein or therein, that continues beyond the Cure Period (to the
extent that, in the Board’s reasonable judgment, such breach can be cured).

 

“Change in Control” means in one or a series of related transactions (i) the
sale of all or substantially all of the assets of the Company to an Unaffiliated
Person; (ii) a sale resulting

 

11

--------------------------------------------------------------------------------

 

in more than 50% of the voting stock of the Company being held by an
Unaffiliated Person; (iii) a merger, consolidation, recapitalization or
reorganization of the Company with or into another Unaffiliated Person; if and
only if any such event listed in clauses (i) through (iii) above results in the
inability of the Investors, or any member or members of the Investors, to
designate or elect a majority of the Board (or the board of directors of the
resulting entity or its parent company).  For purposes of this definition, the
term “Unaffiliated Person” means any Person or Group who is not (x) an Investor
or any member of the Investors, (y) a Rule 405 Affiliate of any Investor or any
member of any Investor, or (z) an entity in which any Investor, or any member of
any Investor holds, directly or indirectly, a majority of the economic interests
in such entity.

 

“Common Stock” shall have the meaning set forth in the first “whereas”
paragraph.

 

“Company” shall have the meaning set forth in the introductory paragraph.

 

“Confidential Information” shall mean all non-public information concerning
trade secret, know-how, software, developments, inventions, processes,
technology, designs, the financial data, strategic business plans or any
proprietary or confidential information, documents or materials in any form or
media, including any of the foregoing relating to research, operations,
finances, current and proposed products and services, vendors, customers,
advertising and marketing, and other non-public, proprietary, and confidential
information of the Restricted Group.

 

“Constellation” shall have the meaning set forth in the first “whereas”
paragraph.

 

“Custody Agreement and Power of Attorney” shall have the meaning set forth in
Section 9(e) hereof.

 

“DGCL” shall have the meaning set forth in Section 5(c) hereof.

 

“Event” shall have the meaning set forth in Section 5(c) hereof.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended (or
any successor section thereto).

 

“Exercisable Option Shares” shall mean the shares of Common Stock that, at the
Repurchase Calculation Date, could be purchased by the Management Stockholder
upon exercise of his or her outstanding and exercisable Options.

 

“Fair Market Value Per Share” shall mean the Market Value Per Share, or, if
there has been no Qualified Public Offering, the fair market value of the Common
Stock as determined (i) in the good faith discretion of the Board after
consultation with an independent investment banking firm and (ii) without any
premiums for control or discounts for minority interests or restrictions on
transfer.

 

“Good Reason” shall mean “Good Reason” as such term may be defined in any
employment agreement or change-in-control agreement in effect at the time of
termination between the Management Stockholder and the Company or any of its
subsidiaries or Rule 405 Affiliates; or, if there is no such employment or
change-in-control agreement, “Good Reason” shall mean (i) a reduction in the
Management Stockholder’s base salary or annual incentive compensation (other
than a general reduction in base salary that affects all members of senior
management in substantially the same proportions, provided that the Management
Stockholder’s base salary is not reduced by more than 10%); (ii) a substantial

 

12

--------------------------------------------------------------------------------

 

reduction in the Management Stockholder’s duties and responsibilities; or
(iii) a transfer of the Management Stockholder’s primary workplace by more than
fifty miles from his workplace as of the Effective Date.

 

“Group” shall mean “group,” as such term is used for purposes of Section 13(d)
or 14(d) of the Exchange Act.

 

“Investors” shall have the meaning set forth in the second “whereas” paragraph.

 

“Management Stockholder” shall have the meaning set forth in the introductory
paragraph.

 

“Management Stockholder Entities” shall mean the Management Stockholder’s Trust,
the Management Stockholder and the Management Stockholder’s Estate,
collectively.

 

“Management Stockholder’s Estate” shall mean the conservators, guardians,
executors, administrators, testamentary trustees, legatees or beneficiaries of
the Management Stockholder.

 

“Management Stockholder’s Trust” shall mean a partnership, limited liability
company, corporation, trust or custodianship, the beneficiaries of which may
include only the Management Stockholder, his spouse (or ex-spouse) or his lineal
descendants (including adopted) or, if at any time after any such transfer there
shall be no then living spouse or lineal descendants, then to the ultimate
beneficiaries of any such trust or to the estate of a deceased beneficiary.

 

“Market Value Per Share” shall mean, on the Repurchase Calculation Date, the
price per share equal to (i) the average of the last sale price of the Common
Stock for the five (5) trading days ending on the Repurchase Calculation Date on
each stock exchange on which the Common Stock may at the time be listed or,
(ii) if there shall have been no sales on any such exchanges on the Repurchase
Calculation Date on any given day, the average of the closing bid and asked
prices of the Common Stock on each such exchange for the five (5) trading days
ending on the Repurchase Calculation Date or, (iii) if there is no such bid and
asked price on the Repurchase Calculation Date, the average of the closing bid
and asked prices of the Common Stock on the next preceding date when such bid
and asked price occurred or, (iv) if the Common Stock shall not be so listed,
the average of the closing sales prices of the Common Stock as reported by
NASDAQ for the five (5) trading days ending on the Repurchase Calculation Date
in the over-the-counter market.

 

“Maximum Repurchase Amount” shall have the meaning set forth in Section 10(a)
hereof.

 

“New Option” shall have the meaning set forth in the fourth “whereas” paragraph.

 

“1997 Plan” shall have the meaning set forth in the fourth “whereas” paragraph.

 

“Notice” shall have the meaning set forth in Section 9(b) hereof.

 

“Offeror” shall have the meaning set forth in Section 4(a) hereof.

 

“Option” shall have the meaning set forth in the fourth “whereas” paragraph.

 

13

--------------------------------------------------------------------------------

 

“Option Excess Price” shall mean the aggregate amount paid or payable by the
Company in respect of Exercisable Option Shares pursuant to Section 5 or 6, as
applicable.

 

“Option Exercise Price” shall mean the then-current exercise price of the shares
of Common Stock covered by the applicable Option.

 

“Option Plan” shall have the meaning set forth in the fourth “whereas”
paragraph.

 

“Option Stock” shall have the meaning set forth in Section 3(a) hereof.

 

“Other Management Stockholders” shall have the meaning set forth in the seventh
“whereas” paragraph.

 

“Other Management Stockholders’ Agreements” shall have the meaning set forth in
the seventh “whereas” paragraph.

 

“Parties” shall have the meaning set forth in the introductory paragraph.

 

“Permanent Disability” shall mean “Disability” or “Permanent Disability” (as
applicable) as such term may be defined in any employment agreement or
change-in-control agreement in effect at the time of termination between the
Management Stockholder and the Company or any of its subsidiaries or Rule 405
Affiliates; or, if there is no such employment or change-in-control agreement,
“Permanent Disability” shall mean the Management Stockholder becomes physically
or mentally incapacitated and is therefore unable for a period of six (6)
consecutive months to perform substantially all of the material elements of the
Management Stockholder’s duties with the Company or any subsidiary or Rule 405
Affiliate thereof.  Any question as to the existence of the Permanent Disability
of the Management Stockholder as to which the Management Stockholder and the
Company cannot agree shall be determined in writing by a qualified independent
physician mutually acceptable to the Management Stockholder and the Company.  If
the Management Stockholder and the Company cannot agree as to a qualified
independent physician, each shall appoint such a physician and those two
physicians shall select a third who shall make such determination in writing. 
The determination of Permanent Disability made in writing to the Company and the
Management Stockholder shall be final and conclusive for all purposes of this
Agreement.

 

“Person” shall mean “person,” as such term is used for purposes of Section 13(d)
or 14(d) of the Exchange Act.

 

“Piggyback Registration Rights” shall have the meaning set forth in
Section 9(a).

 

“Proposed Registration” shall have the meaning set forth in Section 9(b) hereof.

 

“Providence” shall have the meaning set forth in the second “whereas” paragraph.

 

“Public Offering” shall mean the sale of shares of Common Stock to the public
subsequent to the date hereof pursuant to a registration statement under the Act
which has been declared effective by the SEC (other than a registration
statement on Form S-4, S-8 or any other similar form).

 

“Purchased Stock” shall have the meaning set forth in the fifth “whereas”
paragraph.

 

“Qualified Public Offering” shall mean a Public Offering, which results in an
active trading market of 25% or more of the Common Stock.

 

14

--------------------------------------------------------------------------------

 

“Registration Rights Agreement” shall mean the Registration Rights Agreement, of
even date herewith, among PanAmSat Corporation, Constellation, LLC, Carlyle
PanAmSat I, L.L.C., Carlyle PanAmSat II, L.L.C., PEP PAS, LLC and PEOP PAS, LLC.

 

“Repurchase Calculation Date” shall mean the last day of the month preceding the
later of (i) the month in which the event giving rise to the right to repurchase
occurs and (ii) the month in which the Repurchase Eligibility Date occurs.

 

“Repurchase Eligibility Date” shall have the meaning set forth in Section 5(c)
hereof.

 

“Repurchase Price” shall mean the amount to be paid in respect of the Stock and
Options to be purchased by the Company pursuant to Section 5(a), Section 6(a),
6(b), or 6(c), as applicable.

 

“Request” shall have the meaning set forth in Section 9(b) hereof.

 

“Restricted Group” shall mean, collectively, the Company, its subsidiaries, the
Investors and their respective Rule 405 Affiliates.

 

“Rollover Agreement” shall have the meaning set forth in the third “whereas”
paragraph.

 

“Rollover Option” shall have the meaning set forth in the third “whereas”
paragraph.

 

“Rule 405 Affiliate” shall mean an affiliate of the Company as defined under
Rule 405 of the rules and regulations promulgated under the Act and as
interpreted in good faith by the Board.

 

“Sale Participation Agreement” shall mean that certain sale participation
agreement entered into by and between the Management Stockholder and the
Investors dated as of the date hereof.

 

“SEC” shall mean the Securities and Exchange Commission.

 

“Stock” shall have the meaning set forth in Section 3(a) hereof.

 

“Stock Option Agreement” shall have the meaning set forth in the fourth
“whereas” paragraph.

 

“Stock Purchase Closing” shall have the meaning set forth in the Transaction
Agreement.

 

“Third Party Offer” shall have the meaning set forth in Section 4(a) hereof.

 

“Transaction Agreement” shall have the meaning set forth in the first “whereas”
paragraph.

 

“Transfer” shall have the meaning set forth in Section 3.

 

8.             THE COMPANY’S REPRESENTATIONS AND WARRANTIES.

 

(A)           THE COMPANY REPRESENTS AND WARRANTS TO THE MANAGEMENT STOCKHOLDER
THAT (I) THIS AGREEMENT HAS BEEN DULY AUTHORIZED, EXECUTED AND DELIVERED BY THE
COMPANY AND IS ENFORCEABLE AGAINST THE COMPANY IN ACCORDANCE WITH ITS TERMS AND
(II) THE STOCK, WHEN

 

15

--------------------------------------------------------------------------------

 

ISSUED AND DELIVERED IN ACCORDANCE WITH THE TERMS HEREOF AND THE OTHER
AGREEMENTS CONTEMPLATED HEREBY, WILL BE DULY AND VALIDLY ISSUED, FULLY PAID AND
NONASSESSABLE.

 

(B)           IF THE COMPANY BECOMES SUBJECT TO THE REPORTING REQUIREMENTS OF
SECTION 12 OF THE EXCHANGE ACT, THE COMPANY WILL FILE THE REPORTS REQUIRED TO BE
FILED BY IT UNDER THE ACT AND THE EXCHANGE ACT AND THE RULES AND REGULATIONS
ADOPTED BY THE SEC THEREUNDER, TO THE EXTENT REQUIRED FROM TIME TO TIME TO
ENABLE THE MANAGEMENT STOCKHOLDER TO SELL SHARES OF STOCK WITHOUT REGISTRATION
UNDER THE EXCHANGE ACT WITHIN THE LIMITATIONS OF THE EXEMPTIONS PROVIDED BY
(A) RULE 144 UNDER THE ACT, AS SUCH RULE MAY BE AMENDED FROM TIME TO TIME, OR
(B) ANY SIMILAR RULE OR REGULATION HEREAFTER ADOPTED BY THE SEC. 
NOTWITHSTANDING ANYTHING CONTAINED IN THIS SECTION 8(B), THE COMPANY MAY
DE-REGISTER UNDER SECTION 12 OF THE EXCHANGE ACT IF IT IS THEN PERMITTED TO DO
SO PURSUANT TO THE EXCHANGE ACT AND THE RULES AND REGULATIONS THEREUNDER AND, IN
SUCH CIRCUMSTANCES, SHALL NOT BE REQUIRED HEREBY TO FILE ANY REPORTS WHICH MAY
BE NECESSARY IN ORDER FOR RULE 144 OR ANY SIMILAR RULE OR REGULATION UNDER THE
ACT TO BE AVAILABLE.  NOTHING IN THIS SECTION 8(B) SHALL BE DEEMED TO LIMIT IN
ANY MANNER THE RESTRICTIONS ON SALES OF STOCK CONTAINED IN THIS AGREEMENT.

 

9.             “PIGGYBACK” REGISTRATION RIGHTS.  EFFECTIVE UPON THE DATE OF THIS
AGREEMENT AND UNTIL THE LATER OF (I) THE FIRST OCCURRENCE OF A QUALIFIED PUBLIC
OFFERING AND (II) THE FIFTH ANNIVERSARY OF THE EFFECTIVE DATE:

 

(A)           THE MANAGEMENT STOCKHOLDER HEREBY AGREES TO BE BOUND BY ALL OF THE
TERMS, CONDITIONS AND OBLIGATIONS OF THE PIGGYBACK REGISTRATION RIGHTS CONTAINED
IN SECTION 2 OF THE REGISTRATION RIGHTS AGREEMENT (THE “REGISTRATION RIGHTS
AGREEMENT”) ENTERED INTO BY AND AMONG THE COMPANY AND INVESTORS PARTY THERETO
(THE “PIGGYBACK REGISTRATION RIGHTS”), AS IN EFFECT ON THE DATE HEREOF (SUBJECT
TO ANY AMENDMENTS THERETO TO WHICH THE MANAGEMENT STOCKHOLDER HAS AGREED IN
WRITING TO BE BOUND), AND, IF ANY OF THE INVESTORS IS SELLING STOCK, WHETHER OR
NOT BEFORE THE IPO DATE (AS DEFINED IN THE REGISTRATION RIGHTS AGREEMENT), SHALL
HAVE ALL OF THE RIGHTS AND PRIVILEGES OF THE PIGGYBACK REGISTRATION RIGHTS
(INCLUDING, WITHOUT LIMITATION, THE RIGHT TO PARTICIPATE IN A PUBLIC OFFERING
AND ANY RIGHTS TO INDEMNIFICATION AND/OR CONTRIBUTION FROM THE COMPANY AND/OR
THE INVESTORS), IN EACH CASE AS IF THE MANAGEMENT STOCKHOLDER WERE AN ORIGINAL
PARTY (OTHER THAN THE COMPANY) TO THE REGISTRATION RIGHTS AGREEMENT, SUBJECT TO
APPLICABLE AND CUSTOMARY UNDERWRITER RESTRICTIONS; PROVIDED, HOWEVER, THAT AT NO
TIME SHALL THE MANAGEMENT STOCKHOLDER HAVE ANY RIGHTS TO REQUEST REGISTRATION
UNDER SECTION 3 OF THE REGISTRATION RIGHTS AGREEMENT; AND PROVIDED FURTHER, THAT
THE MANAGEMENT STOCKHOLDER SHALL NOT BE BOUND BY ANY AMENDMENTS TO THE
REGISTRATION RIGHTS AGREEMENT UNLESS THE MANAGEMENT STOCKHOLDER CONSENTS IN
WRITING THERETO PROVIDED THAT SUCH CONSENT WILL NOT BE UNREASONABLY WITHHELD. 
ALL STOCK PURCHASED OR HELD BY THE APPLICABLE MANAGEMENT STOCKHOLDER ENTITIES
PURSUANT TO THIS AGREEMENT SHALL BE DEEMED TO BE “REGISTRABLE SECURITIES” AS
DEFINED IN THE REGISTRATION RIGHTS AGREEMENT.

 

(B)           IN THE EVENT OF A SALE OF COMMON STOCK BY ANY OF THE INVESTORS IN
ACCORDANCE WITH THE TERMS OF THE REGISTRATION RIGHTS AGREEMENT, THE COMPANY WILL
PROMPTLY NOTIFY THE MANAGEMENT STOCKHOLDER IN WRITING (A “NOTICE”) OF ANY
PROPOSED REGISTRATION (A “PROPOSED REGISTRATION”).  IF WITHIN FIFTEEN (15) DAYS
OF THE RECEIPT BY THE MANAGEMENT STOCKHOLDER OF SUCH NOTICE, THE COMPANY
RECEIVES FROM THE APPLICABLE MANAGEMENT STOCKHOLDER ENTITIES A WRITTEN REQUEST
(A “REQUEST”) TO REGISTER SHARES OF STOCK HELD BY THE APPLICABLE MANAGEMENT
STOCKHOLDER ENTITIES (WHICH REQUEST WILL BE IRREVOCABLE UNLESS OTHERWISE
MUTUALLY AGREED TO IN WRITING BY THE MANAGEMENT STOCKHOLDER AND THE COMPANY),
SHARES OF STOCK WILL BE SO REGISTERED AS PROVIDED IN THIS SECTION 9; PROVIDED,
HOWEVER, THAT FOR EACH SUCH REGISTRATION STATEMENT ONLY ONE REQUEST, WHICH SHALL
BE EXECUTED BY THE APPLICABLE

 

16

--------------------------------------------------------------------------------

 

MANAGEMENT STOCKHOLDER ENTITIES, MAY BE SUBMITTED FOR ALL REGISTRABLE SECURITIES
HELD BY THE APPLICABLE MANAGEMENT STOCKHOLDER ENTITIES.

 

(C)           THE MAXIMUM NUMBER OF SHARES OF STOCK WHICH WILL BE REGISTERED
PURSUANT TO A REQUEST WILL BE THE LOWEST OF (I) THE NUMBER OF SHARES OF STOCK
THEN HELD BY THE MANAGEMENT STOCKHOLDER ENTITIES, INCLUDING ALL SHARES OF STOCK
WHICH THE MANAGEMENT STOCKHOLDER ENTITIES ARE THEN ENTITLED TO ACQUIRE UNDER AN
UNEXERCISED OPTION TO THE EXTENT THEN EXERCISABLE, MULTIPLIED BY A FRACTION, THE
NUMERATOR OF WHICH IS THE NUMBER OF SHARES OF STOCK BEING SOLD BY THE SELLING
INVESTORS AND ANY AFFILIATED OR UNAFFILIATED INVESTMENT PARTNERSHIPS AND
INVESTMENT LIMITED LIABILITY COMPANIES INVESTING WITH THE SELLING INVESTORS AND
THE DENOMINATOR OF WHICH IS THE AGGREGATE NUMBER OF SHARES OF STOCK OWNED BY THE
SELLING INVESTORS AND ANY INVESTMENT PARTNERSHIPS AND INVESTMENT LIMITED
LIABILITY COMPANIES INVESTING WITH THE SELLING INVESTORS OR (II) THE MAXIMUM
NUMBER OF SHARES OF STOCK WHICH THE COMPANY CAN REGISTER IN THE PROPOSED
REGISTRATION WITHOUT ADVERSE EFFECT ON THE OFFERING IN THE VIEW OF THE MANAGING
UNDERWRITERS (REDUCED PRO RATA AS MORE FULLY DESCRIBED IN SUBSECTION (D) OF THIS
SECTION 9).

 

(D)           IF A PROPOSED REGISTRATION INVOLVES AN UNDERWRITTEN OFFERING AND
THE MANAGING UNDERWRITER ADVISES THE COMPANY IN WRITING THAT, IN ITS OPINION,
THE NUMBER OF SHARES OF STOCK REQUESTED TO BE INCLUDED IN THE PROPOSED
REGISTRATION EXCEEDS THE NUMBER WHICH CAN BE SOLD IN SUCH OFFERING, SO AS TO BE
LIKELY TO HAVE AN ADVERSE EFFECT ON THE PRICE, TIMING OR DISTRIBUTION OF THE
SHARES OF STOCK OFFERED IN SUCH PUBLIC OFFERING AS CONTEMPLATED BY THE COMPANY,
THEN THE COMPANY WILL INCLUDE IN THE PROPOSED REGISTRATION (I) FIRST, 100% OF
THE SHARES OF STOCK THE COMPANY PROPOSES TO SELL AND (II) SECOND, TO THE EXTENT
OF THE NUMBER OF SHARES OF STOCK REQUESTED TO BE INCLUDED IN SUCH REGISTRATION
WHICH, IN THE OPINION OF SUCH MANAGING UNDERWRITER, CAN BE SOLD WITHOUT HAVING
THE ADVERSE EFFECT REFERRED TO ABOVE, THE NUMBER OF SHARES OF STOCK WHICH THE
SELLING INVESTORS AND ANY AFFILIATED OR UNAFFILIATED INVESTMENT PARTNERSHIPS AND
INVESTMENT LIMITED LIABILITY COMPANIES INVESTING WITH THE SELLING INVESTORS, THE
MANAGEMENT STOCKHOLDER AND ALL OTHER MANAGEMENT STOCKHOLDERS (TOGETHER, THE
“HOLDERS”) HAVE REQUESTED TO BE INCLUDED IN THE PROPOSED REGISTRATION, SUCH
AMOUNT TO BE ALLOCATED PRO RATA AMONG ALL REQUESTING HOLDERS ON THE BASIS OF THE
RELATIVE NUMBER OF SHARES OF STOCK THEN HELD BY EACH SUCH HOLDER (INCLUDING UPON
EXERCISE OF ALL EXERCISABLE OPTIONS) (PROVIDED THAT ANY SHARES THEREBY ALLOCATED
TO ANY SUCH HOLDER THAT EXCEED SUCH HOLDER’S REQUEST WILL BE REALLOCATED AMONG
THE REMAINING REQUESTING HOLDERS IN LIKE MANNER).

 

(E)           UPON DELIVERING A REQUEST THE MANAGEMENT STOCKHOLDER WILL, IF
REQUESTED BY THE COMPANY, EXECUTE AND DELIVER A CUSTODY AGREEMENT AND POWER OF
ATTORNEY HAVING CUSTOMARY TERMS AND IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE COMPANY WITH RESPECT TO THE SHARES OF STOCK TO BE REGISTERED
PURSUANT TO THIS SECTION 9 (A “CUSTODY AGREEMENT AND POWER OF ATTORNEY”).  THE
CUSTODY AGREEMENT AND POWER OF ATTORNEY WILL PROVIDE, AMONG OTHER THINGS, THAT
THE MANAGEMENT STOCKHOLDER WILL DELIVER TO AND DEPOSIT IN CUSTODY WITH THE
CUSTODIAN AND ATTORNEY-IN-FACT NAMED THEREIN A CERTIFICATE OR CERTIFICATES (TO
THE EXTENT APPLICABLE) REPRESENTING SUCH SHARES OF STOCK (DULY ENDORSED IN BLANK
BY THE REGISTERED OWNER OR OWNERS THEREOF OR ACCOMPANIED BY DULY EXECUTED STOCK
POWERS IN BLANK) AND IRREVOCABLY APPOINT SAID CUSTODIAN AND ATTORNEY-IN-FACT AS
THE MANAGEMENT STOCKHOLDER’S AGENT AND ATTORNEY-IN-FACT WITH FULL POWER AND
AUTHORITY TO ACT UNDER THE CUSTODY AGREEMENT AND POWER OF ATTORNEY ON THE
MANAGEMENT STOCKHOLDER’S BEHALF WITH RESPECT TO THE MATTERS SPECIFIED THEREIN.

 

17

--------------------------------------------------------------------------------

 

(F)            THE MANAGEMENT STOCKHOLDER AGREES THAT HE WILL EXECUTE SUCH OTHER
AGREEMENTS AS THE COMPANY MAY REASONABLY REQUEST TO FURTHER EVIDENCE THE
PROVISIONS OF THIS SECTION 9.

 

10.           PRO RATA REPURCHASES; DIVIDENDS.  (A)  NOTWITHSTANDING ANYTHING TO
THE CONTRARY CONTAINED IN SECTION 5 OR 6, IF AT ANY TIME CONSUMMATION OF ANY
PURCHASE OR PAYMENT TO BE MADE BY THE COMPANY PURSUANT TO THIS AGREEMENT AND THE
OTHER MANAGEMENT STOCKHOLDERS AGREEMENTS WOULD RESULT IN AN EVENT, THEN THE
COMPANY SHALL MAKE PURCHASES FROM, AND PAYMENTS TO, THE MANAGEMENT STOCKHOLDER
AND OTHER MANAGEMENT STOCKHOLDERS PRO RATA (ON THE BASIS OF THE PROPORTION OF
THE NUMBER OF SHARES OF STOCK EACH SUCH MANAGEMENT STOCKHOLDER AND ALL OTHER
MANAGEMENT STOCKHOLDERS HAVE ELECTED OR ARE REQUIRED TO SELL TO THE COMPANY) FOR
THE MAXIMUM NUMBER OF SHARES OF STOCK PERMITTED WITHOUT RESULTING IN AN EVENT
(THE “MAXIMUM REPURCHASE AMOUNT”).  THE PROVISIONS OF SECTION 5(C) AND 6(E)
SHALL APPLY IN THEIR ENTIRETY TO PAYMENTS AND REPURCHASES WITH RESPECT TO SHARES
OF STOCK WHICH MAY NOT BE MADE DUE TO THE LIMITS IMPOSED BY THE MAXIMUM
REPURCHASE AMOUNT UNDER THIS SECTION 10(A).  UNTIL ALL OF SUCH STOCK IS
PURCHASED AND PAID FOR BY THE COMPANY, THE MANAGEMENT STOCKHOLDER AND THE OTHER
MANAGEMENT STOCKHOLDERS WHOSE STOCK IS NOT PURCHASED IN ACCORDANCE WITH THIS
SECTION 10(A) SHALL HAVE PRIORITY, ON A PRO RATA BASIS, OVER OTHER PURCHASES OF
STOCK BY THE COMPANY PURSUANT TO THIS AGREEMENT AND OTHER MANAGEMENT
STOCKHOLDERS’ AGREEMENTS.

 

(B)           IN THE EVENT ANY DIVIDENDS ARE PAID WITH RESPECT TO THE STOCK, THE
MANAGEMENT STOCKHOLDER WILL BE TREATED IN THE SAME MANNER AS ALL OTHER HOLDERS
OF COMMON STOCK WITH RESPECT TO SHARES OF STOCK THEN OWNED BY THE MANAGEMENT
STOCKHOLDER, AND, WITH RESPECT TO ANY OPTIONS HELD BY THE MANAGEMENT
STOCKHOLDER, IN ACCORDANCE, AS APPLICABLE, WITH SECTION 2.4 OF THE STOCK OPTION
AGREEMENT.

 

11.           RIGHTS TO NEGOTIATE REPURCHASE PRICE.  NOTHING IN THIS AGREEMENT
SHALL BE DEEMED TO RESTRICT OR PROHIBIT THE COMPANY FROM PURCHASING, REDEEMING
OR OTHERWISE ACQUIRING FOR VALUE SHARES OF STOCK OR OPTIONS FROM THE MANAGEMENT
STOCKHOLDER, AT ANY TIME, UPON SUCH TERMS AND CONDITIONS, AND FOR SUCH PRICE, AS
MAY BE MUTUALLY AGREED UPON IN WRITING BETWEEN THE PARTIES, WHETHER OR NOT AT
THE TIME OF SUCH PURCHASE, REDEMPTION OR ACQUISITION CIRCUMSTANCES EXIST WHICH
SPECIFICALLY GRANT THE COMPANY THE RIGHT TO PURCHASE, OR THE MANAGEMENT
STOCKHOLDER THE RIGHT TO SELL, SHARES OF STOCK OR ANY OPTIONS UNDER THE TERMS OF
THIS AGREEMENT; PROVIDED THAT NO SUCH PURCHASE, REDEMPTION OR ACQUISITION SHALL
BE CONSUMMATED, AND NO AGREEMENT WITH RESPECT TO ANY SUCH PURCHASE, REDEMPTION
OR ACQUISITION SHALL BE ENTERED INTO, WITHOUT THE PRIOR APPROVAL OF THE BOARD.

 

12.           COVENANT REGARDING 83(B) ELECTION.  EXCEPT AS THE COMPANY MAY
OTHERWISE AGREE IN WRITING, THE MANAGEMENT STOCKHOLDER HEREBY COVENANTS AND
AGREES THAT HE WILL MAKE AN ELECTION PROVIDED PURSUANT TO TREASURY
REGULATION 1.83-2 WITH RESPECT TO THE STOCK, INCLUDING WITHOUT LIMITATION, THE
STOCK TO BE ACQUIRED UPON EACH EXERCISE OF THE MANAGEMENT STOCKHOLDER’S OPTIONS
AND ANY GRANT OF RESTRICTED STOCK; AND MANAGEMENT STOCKHOLDER FURTHER COVENANTS
AND AGREES THAT HE WILL FURNISH THE COMPANY WITH COPIES OF THE FORMS OF ELECTION
THE MANAGEMENT STOCKHOLDER FILES WITHIN THIRTY (30) DAYS AFTER THE DATE HEREOF,
AND WITHIN THIRTY (30) DAYS AFTER EACH EXERCISE OF MANAGEMENT STOCKHOLDER’S
OPTIONS AND WITH EVIDENCE THAT EACH SUCH ELECTION HAS BEEN FILED IN A TIMELY
MANNER.

 

13.           NOTICE OF CHANGE OF BENEFICIARY.  IMMEDIATELY PRIOR TO ANY
TRANSFER OF STOCK TO A MANAGEMENT STOCKHOLDER’S TRUST, THE MANAGEMENT
STOCKHOLDER SHALL PROVIDE THE COMPANY WITH A COPY OF THE INSTRUMENTS CREATING
THE MANAGEMENT STOCKHOLDER’S TRUST AND WITH THE IDENTITY OF THE BENEFICIARIES OF
THE MANAGEMENT STOCKHOLDER’S TRUST.  THE

 

18

--------------------------------------------------------------------------------

 

MANAGEMENT STOCKHOLDER SHALL NOTIFY THE COMPANY AS SOON AS PRACTICABLE PRIOR TO
ANY CHANGE IN THE IDENTITY OF ANY BENEFICIARY OF THE MANAGEMENT STOCKHOLDER’S
TRUST.

 

14.           RECAPITALIZATIONS, ETC.  THE PROVISIONS OF THIS AGREEMENT SHALL
APPLY, TO THE FULL EXTENT SET FORTH HEREIN WITH RESPECT TO THE STOCK OR THE
OPTIONS, TO ANY AND ALL SHARES OF CAPITAL STOCK OF THE COMPANY OR ANY CAPITAL
STOCK, PARTNERSHIP UNITS OR ANY OTHER SECURITY EVIDENCING OWNERSHIP INTERESTS IN
ANY SUCCESSOR OR ASSIGN OF THE COMPANY (WHETHER BY MERGER, CONSOLIDATION, SALE
OF ASSETS OR OTHERWISE) WHICH MAY BE ISSUED IN RESPECT OF, IN EXCHANGE FOR, OR
SUBSTITUTION OF THE STOCK OR THE OPTIONS BY REASON OF ANY STOCK DIVIDEND, SPLIT,
REVERSE SPLIT, COMBINATION, RECAPITALIZATION, LIQUIDATION, RECLASSIFICATION,
MERGER, CONSOLIDATION OR OTHERWISE.

 

15.           MANAGEMENT STOCKHOLDER’S EMPLOYMENT BY THE COMPANY.  NOTHING
CONTAINED IN THIS AGREEMENT OR IN ANY OTHER AGREEMENT ENTERED INTO BY THE
COMPANY AND THE MANAGEMENT STOCKHOLDER CONTEMPORANEOUSLY WITH THE EXECUTION OF
THIS AGREEMENT (SUBJECT TO, AND EXCEPT AS SET FORTH IN, THE APPLICABLE
PROVISIONS OF ANY OFFER LETTER OR LETTER OF EMPLOYMENT PROVIDED TO THE
MANAGEMENT STOCKHOLDER BY THE COMPANY OR ANY EMPLOYMENT AGREEMENT ENTERED BY AND
BETWEEN THE MANAGEMENT STOCKHOLDER AND THE COMPANY) (I) OBLIGATES THE COMPANY OR
ANY SUBSIDIARY OF THE COMPANY TO EMPLOY THE MANAGEMENT STOCKHOLDER IN ANY
CAPACITY WHATSOEVER OR (II) PROHIBITS OR RESTRICTS THE COMPANY (OR ANY SUCH
SUBSIDIARY) FROM TERMINATING THE EMPLOYMENT OF THE MANAGEMENT STOCKHOLDER AT ANY
TIME OR FOR ANY REASON WHATSOEVER, WITH OR WITHOUT CAUSE, AND THE MANAGEMENT
STOCKHOLDER HEREBY ACKNOWLEDGES AND AGREES THAT NEITHER THE COMPANY NOR ANY
OTHER PERSON HAS MADE ANY REPRESENTATIONS OR PROMISES WHATSOEVER TO THE
MANAGEMENT STOCKHOLDER CONCERNING THE MANAGEMENT STOCKHOLDER’S EMPLOYMENT OR
CONTINUED EMPLOYMENT BY THE COMPANY OR ANY SUBSIDIARY OF THE COMPANY.

 

16.           BINDING EFFECT.  THE PROVISIONS OF THIS AGREEMENT SHALL BE BINDING
UPON AND ACCRUE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE HEIRS,
LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS.  IN THE CASE OF A TRANSFEREE
PERMITTED UNDER SECTION 2(A) OR SECTION 3 (OTHER THAN CLAUSES (C) OR (D)
THEREOF) HEREOF, SUCH TRANSFEREE SHALL BE DEEMED THE MANAGEMENT STOCKHOLDER
HEREUNDER; PROVIDED, HOWEVER, THAT NO TRANSFEREE (INCLUDING WITHOUT LIMITATION,
TRANSFEREES REFERRED TO IN SECTION 2(A) OR SECTION 3 HEREOF) SHALL DERIVE ANY
RIGHTS UNDER THIS AGREEMENT UNLESS AND UNTIL SUCH TRANSFEREE HAS DELIVERED TO
THE COMPANY A VALID UNDERTAKING AND BECOMES BOUND BY THE TERMS OF THIS
AGREEMENT.

 

17.           AMENDMENT.  THIS AGREEMENT MAY BE AMENDED ONLY BY A WRITTEN
INSTRUMENT SIGNED BY THE PARTIES HERETO.

 

18.           CLOSING.  EXCEPT AS OTHERWISE PROVIDED HEREIN, THE CLOSING OF EACH
PURCHASE AND SALE OF SHARES OF STOCK PURSUANT TO THIS AGREEMENT SHALL TAKE PLACE
AT THE PRINCIPAL OFFICE OF THE COMPANY ON THE TENTH BUSINESS DAY FOLLOWING
DELIVERY OF THE NOTICE BY EITHER PARTY TO THE OTHER OF ITS EXERCISE OF THE RIGHT
TO PURCHASE OR SELL SUCH STOCK HEREUNDER.

 

19.           APPLICABLE LAW; JURISDICTION; ARBITRATION; LEGAL FEES.

 

(A)           THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED
AND TO BE PERFORMED ENTIRELY IN SUCH STATE SHALL GOVERN THE INTERPRETATION,
VALIDITY AND PERFORMANCE OF THE TERMS OF THIS AGREEMENT.

 

(B)           IN THE EVENT OF ANY CONTROVERSY AMONG THE PARTIES HERETO ARISING
OUT OF, OR RELATING TO, THIS AGREEMENT WHICH CANNOT BE SETTLED AMICABLY BY THE
PARTIES, SUCH CONTROVERSY SHALL BE FINALLY, EXCLUSIVELY AND CONCLUSIVELY SETTLED
BY MANDATORY ARBITRATION

 

19

--------------------------------------------------------------------------------

 

CONDUCTED EXPEDITIOUSLY IN ACCORDANCE WITH THE AMERICAN ARBITRATION ASSOCIATION
RULES BY A SINGLE INDEPENDENT ARBITRATOR.  SUCH ARBITRATION PROCESS SHALL TAKE
PLACE WITHIN 100 MILES OF THE NEW YORK CITY METROPOLITAN AREA.  THE DECISION OF
THE ARBITRATOR SHALL BE FINAL AND BINDING UPON ALL PARTIES HERETO AND SHALL BE
RENDERED PURSUANT TO A WRITTEN DECISION, WHICH CONTAINS A DETAILED RECITAL OF
THE ARBITRATOR’S REASONING.  JUDGMENT UPON THE AWARD RENDERED MAY BE ENTERED IN
ANY COURT HAVING JURISDICTION THEREOF.

 

(C)           NOTWITHSTANDING THE FOREGOING, THE MANAGEMENT STOCKHOLDER
ACKNOWLEDGES AND AGREES THAT THE COMPANY, ITS SUBSIDIARIES, THE INVESTORS AND
ANY OF THEIR RESPECTIVE RULE 405 AFFILIATES SHALL BE ENTITLED TO INJUNCTIVE OR
OTHER RELIEF IN ORDER TO ENFORCE THE COVENANT NOT TO COMPETE, COVENANT NOT TO
SOLICIT AND/OR CONFIDENTIALITY COVENANTS AS SET FORTH IN SECTION 24(A) OF THIS
AGREEMENT.

 

(D)           IN THE EVENT OF ANY ARBITRATION OR OTHER DISPUTES WITH REGARD TO
THIS AGREEMENT OR ANY OTHER DOCUMENT OR AGREEMENT REFERRED TO HEREIN, EACH PARTY
SHALL PAY ITS OWN LEGAL FEES AND EXPENSES, UNLESS OTHERWISE DETERMINED BY THE
ARBITRATOR.

 

20.           ASSIGNABILITY OF CERTAIN RIGHTS BY THE COMPANY.  THE COMPANY SHALL
HAVE THE RIGHT TO ASSIGN ANY OR ALL OF ITS RIGHTS OR OBLIGATIONS TO PURCHASE
SHARES OF STOCK PURSUANT TO SECTIONS 4, 5 AND 6 HEREOF.

 

21.           MISCELLANEOUS.

 

(A)           IN THIS AGREEMENT ALL REFERENCES TO “DOLLARS” OR “$” ARE TO UNITED
STATES DOLLARS AND THE MASCULINE PRONOUN SHALL INCLUDE THE FEMININE AND NEUTER,
AND THE SINGULAR THE PLURAL, WHERE THE CONTEXT SO INDICATES

 

(B)           IF ANY PROVISION OF THIS AGREEMENT SHALL BE DECLARED ILLEGAL, VOID
OR UNENFORCEABLE BY ANY COURT OF COMPETENT JURISDICTION, THE OTHER PROVISIONS
SHALL NOT BE AFFECTED, BUT SHALL REMAIN IN FULL FORCE AND EFFECT.

 

22.           WITHHOLDING.  THE COMPANY OR ITS SUBSIDIARIES SHALL HAVE THE RIGHT
TO DEDUCT FROM ANY CASH PAYMENT MADE UNDER THIS AGREEMENT TO THE APPLICABLE
MANAGEMENT STOCKHOLDER ENTITIES ANY MINIMUM FEDERAL, STATE OR LOCAL INCOME OR
OTHER TAXES REQUIRED BY LAW TO BE WITHHELD WITH RESPECT TO SUCH PAYMENT.

 

23.           NOTICES.  ALL NOTICES AND OTHER COMMUNICATIONS PROVIDED FOR HEREIN
SHALL BE IN WRITING.  ANY NOTICE OR OTHER COMMUNICATION HEREUNDER SHALL BE
DEEMED DULY GIVEN (I) UPON ELECTRONIC CONFIRMATION OF FACSIMILE, (II) ONE
BUSINESS DAY FOLLOWING THE DATE SENT WHEN SENT BY OVERNIGHT DELIVERY AND
(III) FIVE (5) BUSINESS DAYS FOLLOWING THE DATE MAILED WHEN MAILED BY REGISTERED
OR CERTIFIED MAIL RETURN RECEIPT REQUESTED AND POSTAGE PREPAID, IN EACH CASE AS
FOLLOWS:

 

(A)           IF TO THE COMPANY, TO IT AT THE FOLLOWING ADDRESS:

 

PanAmSat Corporation
20 Westport Road

Wilton, CT  06897

Attention:  James Cuminale, Esq.

 

WITH COPIES TO:

 

Kohlberg Kravis Roberts & Co.

 

20

--------------------------------------------------------------------------------

 

9 West 57th Street

New York, New York 10019

Attention:  Alexander Navab

 

and

 

Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attention:  Gary I. Horowitz, Esq.

Marni J. Lerner, Esq.

Telecopy:  (212) 455-2502

 

(B)           IF TO THE MANAGEMENT STOCKHOLDER, TO HIM AT THE ADDRESS SET FORTH
BELOW UNDER HIS SIGNATURE;

 

OR AT SUCH OTHER ADDRESS AS EITHER PARTY SHALL HAVE SPECIFIED BY NOTICE IN
WRITING TO THE OTHER.

 

24.           CONFIDENTIAL INFORMATION; COVENANT NOT TO COMPETE.

 

(A)           IN CONSIDERATION OF THE COMPANY ENTERING INTO THIS AGREEMENT WITH
THE MANAGEMENT STOCKHOLDER, THE MANAGEMENT STOCKHOLDER HEREBY AGREES EFFECTIVE
AS OF THE DATE OF THE MANAGEMENT STOCKHOLDER’S COMMENCEMENT OF EMPLOYMENT WITH
THE COMPANY OR ITS SUBSIDIARIES, WITHOUT THE COMPANY’S PRIOR WRITTEN CONSENT,
THE MANAGEMENT STOCKHOLDER SHALL NOT, DIRECTLY OR INDIRECTLY, (I) AT ANY TIME
DURING OR AFTER THE MANAGEMENT STOCKHOLDER’S EMPLOYMENT WITH THE COMPANY OR ITS
SUBSIDIARIES, DISCLOSE ANY CONFIDENTIAL INFORMATION PERTAINING TO THE BUSINESS
OF THE COMPANY OR ANY OF ITS SUBSIDIARIES, EXCEPT WHEN REQUIRED TO PERFORM HIS
OR HER DUTIES TO THE COMPANY OR ONE OF ITS SUBSIDIARIES, BY LAW OR JUDICIAL
PROCESS; OR (II) AT ANY TIME DURING THE MANAGEMENT STOCKHOLDER’S EMPLOYMENT WITH
THE COMPANY OR ITS SUBSIDIARIES AND FOR A PERIOD OF EIGHTEEN MONTHS THEREAFTER,
DIRECTLY OR INDIRECTLY (A) ACT AS A PROPRIETOR, INVESTOR, DIRECTOR, OFFICER,
EMPLOYEE, SUBSTANTIAL STOCKHOLDER, CONSULTANT, OR PARTNER IN ANY BUSINESS THAT
DIRECTLY OR INDIRECTLY COMPETES WITH THE BUSINESS OF THE COMPANY IN, (1) THE
SALE OR LEASE OF, OR THE PROVISION OF SATELLITE SERVICES VIA TRANSPONDER
CAPACITY ON SATELLITES OPERATING IN GEOSTATIONARY EARTH ORBIT; OR (2) THE
PROVISION OF TELEMETRY, TRACKING AND CONTROL SERVICES FOR SUCH SATELLITES AND
FOR OTHER SATELLITES OPERATING IN GEOSTATIONARY EARTH ORBIT OR ANY OF THEIR
SUCCESSORS OR ANY OTHER SATELLITE COMPANY OR ITS SATELLITE-RELATED AFFILIATE,
(B) SOLICIT CUSTOMERS OR CLIENTS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES TO
TERMINATE THEIR RELATIONSHIP WITH THE COMPANY OR ANY OF ITS SUBSIDIARIES OR
OTHERWISE SOLICIT SUCH CUSTOMERS OR CLIENTS TO COMPETE WITH ANY BUSINESS OF THE
COMPANY OR ANY OF ITS SUBSIDIARIES OR (C) SOLICIT OR OFFER EMPLOYMENT TO ANY
PERSON WHO HAS BEEN EMPLOYED BY THE COMPANY OR ANY OF ITS SUBSIDIARIES AT ANY
TIME DURING THE TWELVE (12) MONTHS IMMEDIATELY PRECEDING THE TERMINATION OF THE
MANAGEMENT STOCKHOLDER’S EMPLOYMENT.  IF THE MANAGEMENT STOCKHOLDER IS BOUND BY
ANY OTHER AGREEMENT WITH THE COMPANY REGARDING THE USE OR DISCLOSURE OF
CONFIDENTIAL INFORMATION, THE PROVISIONS OF THAT AGREEMENT SHALL CONTROL WITH
RESPECT TO THE USE OR DISCLOSURE OF CONFIDENTIAL INFORMATION, AND THIS SECTION
24(A) SHALL NOT APPLY.

 

(B)           NOTWITHSTANDING CLAUSE (A) ABOVE, IF AT ANY TIME A COURT HOLDS
THAT THE RESTRICTIONS STATED IN SUCH CLAUSE (A) ARE UNREASONABLE OR OTHERWISE
UNENFORCEABLE UNDER CIRCUMSTANCES THEN EXISTING, THE PARTIES HERETO AGREE THAT
THE MAXIMUM PERIOD, SCOPE OR GEOGRAPHIC AREA DETERMINED TO BE REASONABLE UNDER
SUCH CIRCUMSTANCES BY SUCH COURT WILL BE SUBSTITUTED FOR THE STATED PERIOD,
SCOPE OR AREA.  BECAUSE THE MANAGEMENT STOCKHOLDER’S SERVICES ARE UNIQUE AND
BECAUSE THE MANAGEMENT STOCKHOLDER HAS HAD ACCESS TO CONFIDENTIAL

 

21

--------------------------------------------------------------------------------

 

INFORMATION, THE PARTIES HERETO AGREE THAT MONEY DAMAGES WILL BE AN INADEQUATE
REMEDY FOR ANY BREACH OF THIS AGREEMENT.  IN THE EVENT OF A BREACH OR THREATENED
BREACH OF THIS AGREEMENT, THE COMPANY OR ITS SUCCESSORS OR ASSIGNS MAY, IN
ADDITION TO OTHER RIGHTS AND REMEDIES EXISTING IN THEIR FAVOR, APPLY TO ANY
COURT OF COMPETENT JURISDICTION FOR SPECIFIC PERFORMANCE AND/OR INJUNCTIVE
RELIEF IN ORDER TO ENFORCE, OR PREVENT ANY VIOLATIONS OF, THE PROVISIONS HEREOF
(WITHOUT THE POSTING OF A BOND OR OTHER SECURITY).

 

(c)           In the event that the Management Stockholder breaches any of the
provisions of Section 24(a), in addition to all other remedies that may be
available to the Company, such Management Stockholder shall be required to pay
to the Company any amounts actually paid to him or her by the Company in respect
of any repurchase by the Company of the New Option or shares of Common Stock
underlying the New Option held by such Management Stockholder.

 

25.           TERMINATION OF CERTAIN PROVISIONS.

 

The provisions contained in Section 4 and the portion of any other provision of
this Agreement that incorporates the provisions of Section 4, shall terminate,
and be of no further force or effect upon the consummation of a Qualified Public
Offering.

[Signatures on next page.]

 

22

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.

 

 

PANAMSAT CORPORATION

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

23

--------------------------------------------------------------------------------

 

 

MANAGEMENT STOCKHOLDER:

 

 

 

 

 

Name: 

 

 

 

 

 

ADDRESS:

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------