Document:

EXHIBIT 10.11(d)

 

MF ACQUISITION CORPORATION 

NONQUALIFIED ROLLOVER COMMON STOCK OPTION AGREEMENT

 

WHEREAS, MF
Acquisition Corporation has entered into an Agreement and Plan of Merger, dated
as of March 16, 2004 (as amended through the date hereof, the “Merger Agreement”)
among Maidenform, Inc., MF Acquisition Corporation, MF Merger Corporation and
Ares Corporate Opportunities Fund, L.P. under which Maidenform, Inc. will merge
with MF Merger Corporation, with Maidenform, Inc. surviving the merger as a
subsidiary of MF Acquisition Corporation (the “Merger”); and

 

WHEREAS, the
Employee (as defined below) holds a nonqualified option to purchase shares of
common stock of Maidenform, Inc. (the “Old Option) and references herein to the
Old Option relate solely to that portion of such option as relate to 5,982.47
shares of common stock of Maidenform, Inc. that may be purchased for $6.04 per
share and to which an Option Adjustment Amount of $5.64 per share is related,
and which were granted on January 28, 2002; and

 

WHEREAS,
pursuant to the Merger Agreement, MF Acquisition Corporation is granting the
stock option set forth in this Agreement in substitution for the Old Option;
and

 

WHEREAS,
following the grant of this stock option, the Old Option will be terminated and
have no further force or effect; and

 

WHEREAS, this
Nonqualified Rollover Common Stock Option Agreement has been entered into in
connection with discussions and negotiations regarding the terms and conditions
of Employee’s (as defined below) employment following the Merger.

 

NOW,
THEREFORE, in consideration of the mutual covenants and premises set forth
herein, the parties hereto agree as follows:

 

This
Nonqualified Rollover Common Stock Option Agreement (this “Agreement”) is made
as of May 10, 2004 by and between MF Acquisition Corporation, a Delaware
corporation (the “Corporation”), and Steven N. Masket (“Employee”).  This option is granted in substitution for
the Old Option, and it is granted pursuant to and is subject to the MF
Acquisition Corporation 2004 Rollover Stock Option Plan (the “Plan”).  The termination of the Old Option will take
effect immediately prior to the Merger and the grant of this stock option shall
be conditioned and effective upon the occurrence of the Merger.  In the event the Merger does not occur, the
Old Option shall continue in effect in accordance with its terms.

 

1.                                       The
Corporation grants Employee an option to purchase the number of shares of
Common Stock described in Annex A at the exercise price and on the terms and
conditions contained in Annex A, this Agreement and the general terms and
conditions set forth in the Plan.  At the
time of exercise of this option, Employee shall also receive an amount of cash
equal to the Option Adjustment Amount per Share described in Annex A for each
share of Common Stock received on exercise.

 

 

2.                                       Employee
may exercise the option, in whole or in part, at any time prior to the
expiration date described in Annex A, except that Employee may not exercise the
option for a fraction of a share of Common Stock (unless the number of shares
to be purchased is the total balance for which the option is then
exercisable).  In order to exercise this
option Employee must also exercise his or her option to purchase Preferred
Stock granted under a Nonqualified Rollover Preferred Stock Option Agreement of
even date herewith for a number of shares of Preferred Stock equal to the
lesser of (i) the number of shares of Common Stock for which this option
is exercised divided by 55 (subject to any necessary rounding due to the
inability to issue fractional shares) or (ii) the number of shares of
Preferred Stock remaining subject to such option, if any.

 

3.                                       To
exercise this option, Employee shall submit to the Secretary of the Corporation
no more than ten (10) days prior to the effective date of exercise, a notice of
exercise substantially in the form of Annex B, the purchase price for the
Common Stock to be acquired upon exercise and such other information as may be
required from time to time by the Committee administering the Plan in accordance
with the terms of the Plan.  The purchase
price may be paid by certified or bank check, or by such other method as the Committee
may from time to time prescribe.

 

4.                                       By
acceptance of this option, Employee agrees to reimburse the Corporation for any
taxes or other obligations required by any government to be withheld or
otherwise deducted and paid by the Corporation with respect to the issuance or
disposition of the Common Stock subject to the option.  In lieu thereof, the Corporation shall have
the right to withhold the amount of such taxes from any other sums due or to
become due from the Corporation to Employee. 
The Corporation may, in its discretion, hold the stock certificate or
certificates to which Employee is entitled upon the exercise of the option as
security for the payment of such withholding tax liability until cash
sufficient to pay that liability has been accumulated.  Employee shall not have any of the rights of
a shareholder with respect to the Common Stock underlying the option until the
option is exercised and Employee receives the purchased Common Stock.

 

5.                                       If
Employee incurs a Termination of Employment prior to the expiration date, this
option shall remain exercisable until the expiration date described in Annex A.

 

6.                                       This
option and shares purchased on the exercise of this option shall be subject to
the terms of the Stockholders Agreement dated as of May 6, 2004 among the
Corporation and the investors named therein, as the same may be amended from
time to time (the “Stockholders Agreement”). 
This option shall be transferable by Employee as set forth in the
Stockholders Agreement.

 

7.                                       The
Corporation represents and warrants to Employee that the shares subject to this
option have been duly reserved for issuance and upon issuance and payment of
the exercise price, will be duly authorized, validly issued, fully paid and
non-assessable, and free of all liens and encumbrances other than pursuant to
the Stockholders Agreement.

 

8.                                       If
the Corporation, in its sole discretion, shall determine that it is necessary
or desirable, to comply with applicable securities laws and/or corporate law or
otherwise, the certificate

 

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or
certificates representing the Common Stock purchased pursuant to the exercise
of the option shall bear an appropriate legend in form and substance, as
determined by the Corporation, giving notice of applicable restrictions on
transfer under or with respect to such laws.

 

9.                                       Employee
covenants and agrees with the Corporation that if, at the time of exercise of
the option, there does not exist a Registration Statement on an appropriate
form under the Securities Act of 1933, as amended (the “Act”), which
Registration Statement shall have become effective and shall include a
prospectus that is current with respect to the Common Stock subject to the
option, then Employee shall execute and deliver a certificate to the
Corporation indicating (i) that he is purchasing the Common Stock for his own
account and not with a view to the resale or distribution thereof, (ii) that
any subsequent offer for sale or sale of any such Common Stock shall be made
either pursuant to (x) a Registration Statement on an appropriate form under
the Act, which Registration Statement shall have become effective and shall be
current with respect to the Common Stock being offered and sold, or (y) a
specific exemption from the registration requirements of the Act and any rules
and regulations thereunder and applicable state securities laws and
regulations, but in claiming such exemption, Employee shall, prior to any offer
for sale or sale of such Common Stock, obtain a favorable written opinion from
counsel for or approved by the Corporation as to the applicability of such
exemption and (iii) that Employee agrees that the certificate or certificates
evidencing such Common Stock shall bear a legend to the effect of the
foregoing.

 

10.                                 Employee
covenants and agrees that Employee shall not, without the prior written consent
of the Corporation, sell or otherwise dispose of any shares of stock of the
Corporation during such period (a “Market Stand Off Period”) as the Corporation
or its underwriters shall establish in connection with the filing of a
Registration Statement.  The Market Stand
Off Period shall not exceed one hundred eighty (180) days.  The Market Stand Off Period may be
supplemented or superseded by any additional or conflicting restrictions in the
Stockholders Agreement.

 

11.                                 This
Agreement is not a contract of employment and the terms of Employee’s
employment shall not be affected hereby or by any agreement referred to herein
except to the extent specifically so provided herein or therein.  Nothing herein shall be construed to impose
any obligation on the Corporation to continue Employee’s employment, and it
shall not impose any obligation on Employee’s part to remain in the employ of
the Corporation.

 

12.                                 Employee
acknowledges and agrees that neither the Corporation, its shareholders nor its
directors and officers, has any duty or obligation to disclose to Employee any
material information regarding the business of the Corporation or affecting the
value of the shares before or at the time of a termination of the employment of
Employee by the Corporation, including, without limitation, any information
concerning plans for the Corporation to make a public offering of its
securities or to be acquired by or merged with or into another firm or entity.

 

3

 

13.                                 The
parties hereto intend that the substitution of this option for the Old Option
will not result in income tax liability at the time of such substitution and
that Employee will be subject to income tax at ordinary income rates upon
exercise of the option on the excess of the value of the Shares received on
exercise plus the Option Adjustment Amount received over the exercise
price.  If it is determined that income
tax is payable upon the substitution, the Corporation will gross-up Employee in
cash, on an after-tax basis, for any net additional income tax cost (taking
into account the time value of money) of Employee (including any interest and
penalties) due to acceleration of the taxable event to the date of the
substitution (taking into account that it would only be an acceleration of the time
of payment of ordinary income tax and also taking into account any differences
in applicable tax rates).  The
Corporation’s obligation under the prior sentence shall terminate immediately
following the closing of an initial public offering of the Common Stock of the
Corporation and the expiration of any Market Stand Off Period resulting
therefrom.  Any gross-up payable
hereunder shall be paid to Employee at the time Employee pays the tax; provided,
however, that Employee shall not pay the tax without the written consent of
the Corporation, which consent shall not be unreasonably withheld or
delayed.  If a gross-up is payable under
this Section 13 prior to the time of exercise of this option, it is intended
that, if permissible under applicable law, this Section 13 will be effectuated
by a nonrecourse loan from the Corporation to Employee in the amount of the
income tax (plus any interest and penalties) payable by Employee on the option
substitution with respect to this option, which loan shall be due upon exercise
or other settlement of this option, at which time the net amount finally
payable hereunder shall be computed and final settlement made.

 

14.                                 This
option is subject to adjustment for such dilution events as are provided in,
and subject to, the Plan.

 

15.                                 Employee
acknowledges and agrees that the Old Option has terminated effective
immediately prior to the Merger and Employee shall have no right whatsoever to
payments under the Merger Agreement or the Old Option, that the Old Option
shall be of no further force or effect and that Maidenform, Inc. and all
parties to the Merger Agreement may rely upon such termination having occurred
as third party beneficiaries hereof.  In
the event the Merger does not occur, the Old Option shall continue in effect in
accordance with its terms.

 

16.                                 This
Agreement supersedes any conflicting provisions in the Exchange and Support
Agreement dated March 15, 2004.

 

17.                                 By
signing this Agreement, the holder of this option (the “Holder”) represents,
warrants and agrees that: (i) this option and the underlying securities
(collectively, the “Securities”) are being acquired for Holder’s own account
and not with the view to, or for resale in connection with, any distribution,
(2) Holder acknowledges that he or she is an accredited investor within the
meaning of Rule 501 of Regulation D under the Act and has such knowledge, skill
and experience in business, financial and investment matters that he or she is
capable of evaluating the merits, risks and consequences of an investment in
the Securities and is able to bear the economic risk of loss of this
investment; (3) Holder has made such independent investigation of the
Corporation, Maidenform and the transactions

 

4

 

contemplated
by the Merger Agreement as he or she deems necessary or advisable in connection
herewith; and (4) the Securities are the subject of material transfer
restrictions.

 

[signature page follows]

 

5

 

By execution
below, the Corporation and Employee accept this option and acknowledge and
agree that this option is granted under and governed by the terms and
conditions of this Nonqualified Rollover Common Stock Option Agreement, Annex A
hereto and the Plan, both of which are hereby made a part of this document.

 

	
   

  	
  MF ACQUISITION CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Steven N. Masket

  	
   

  	
  By:

  	
  /s/ David B. Kaplan

  	
   

  
	
  Steven N. Masket

  	
  Title:

  	
  David B. Kaplan

  President

  	
   

  
					

 

6

 

ANNEX A TO

 

MF ACQUISITION CORPORATION

NONQUALIFIED ROLLOVER COMMON STOCK OPTION AGREEMENT

 

	
  GRANTED
  TO:

  	
   

  	
  Steven N.
  Masket (“Employee”)

  
	
   

  	
   

  	
   

  
	
  DATE OF
  GRANT:

  	
   

  	
  May 11, 2004

  
	
   

  	
   

  	
   

  
	
  EXPIRATION
  DATE(a):

  	
   

  	
  January 28,
  2012

  
	
   

  	
   

  	
   

  
	
  NUMBER OF
  UNDERLYING SHARES:

  	
   

  	
  35,691.14
  Shares of Common Stock

  
	
   

  	
   

  	
   

  
	
  TYPE OF
  OPTION:

  	
   

  	
  NonQualified
  Stock Option

  
	
   

  	
   

  	
   

  
	
  EXERCISE
  PRICE:

  	
   

  	
  $1.01 per
  Share

  
	
   

  	
   

  	
   

  
	
  VESTING
  SCHEDULE:

  	
   

  	
  Employee
  shall be vested in, and this option shall be exercisable as to, 100% of the
  Shares subject to this option on the Date of Grant.

  
	
   

  	
   

  	
   

  
	
  OPTION ADJUSTMENT
  AMOUNT:

  	
   

  	
  $0.95 per
  Share

  

 

 

(a)                                  Ten
years from original date of grant of Old Options.

 

 

ANNEX B TO

 

MF ACQUISITION CORPORATION

NONQUALIFIED ROLLOVER COMMON STOCK OPTION AGREEMENT

 

SAMPLE NOTICE OF EXERCISE

 

MF Acquisition
Corporation

c/o Maidenform, Inc.

154 Avenue E

Bayonne, NJ  07002

 

Attn:  Corporate Secretary

 

To the
Corporate Secretary:

 

I hereby
exercise my stock option granted under the Nonqualified Rollover Common Stock
Option Agreement dated May 6, 2004 between MF Acquisition Corporation (the
“Corporation”) and                              (the
“Agreement”) and notify you of my desire to purchase the shares of Common Stock
that have been offered pursuant to the Agreement as described below.

 

I shall pay
for the shares by delivery of a certified or bank check payable to the
Corporation in the amount described below in full payment for such shares plus
all amounts required to be withheld by the Corporation under state, federal or
local law as a result of such exercise or shall provide such documentation as
is satisfactory to the Corporation demonstrating that I am exempt from any withholding
requirement.

 

This notice of
exercise is delivered this             day
of                        (month)              (year).

 

	
  No. Shares to be Acquired

  	
   

  	
  Type of Option

  	
   

  	
  Exercise Price

  	
   

  	
  Total

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Nonqualified

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Estimated Withholding

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Amount
  Paid

  	
   

  	
   

  	
   

  	
   

  

 

	
  Very truly
  yours,

  	
  Employee’s
  Name and Mailing Address

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Employee’s
  Social Security Number

  	
   

  
	
  Signature of
  EmployeeExhibit
10.12

 

IRREVOCABLE
WAIVER

 

 

Reference is made to the
Nonqualified Rollover Preferred Stock Option Agreement (the “Option
Agreement”), dated as of May 11, 2004, by and between Maidenform Brands,
Inc. (the “Corporation”) and the undersigned, pursuant to which the
Corporation granted an option (the “Option”) to the undersigned to
purchase shares of preferred stock, par value $0.01 per share, of the
Corporation (“Preferred Stock”).

 

Pursuant to Section 14 of the
Option Agreement, inter alia, in
the event a dividend in cash is paid on the outstanding shares of Preferred
Stock during the period the Option is outstanding, the amount received on
exercise of the Option shall be adjusted so that the undersigned will receive
as part of the Option Adjustment Amount (as defined in the Option Agreement) the
amount of such dividend at the time of exercise.

In consideration of the
Corporation’s reliance on this Waiver, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned hereby irrevocably and voluntarily waives any and all rights which
he may have pursuant to Section 14 of the Option Agreement, including, without
limitation, the right to an adjustment to the Option Adjustment Amount, in
connection with (i) the declaration of a dividend of $37.00 per share of
Preferred Stock outstanding by the Board of Directors of the Corporation on
June 1, 2005, payable to the holders of record of the outstanding shares of
Preferred Stock at the close of business on June 1, 2005 (the “Preferred
Dividend”), (ii) the payment of the Preferred Dividend, and (iii) the taking of
any actions in connection with the Preferred Dividend.

This Waiver and Consent
Agreement does not and shall not constitute a waiver of any rights of any of
the parties hereto in relation to any events which would trigger an Option
Adjustment Amount other than the Preferred Dividend.

This Waiver shall be binding
on the undersigned and the successors, heirs, personal representatives,
transferees and assigns of the undersigned.

 

IN WITNESS WHEREOF, the
undersigned has executed this Waiver as of the ____ day of June, 2005.

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

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