Document:

Exhibit 10.25

Execution Copy

 

 

STOCKHOLDERS AGREEMENT

of

JOSTENS HOLDING CORP.

 

dated as of October 4, 2004

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  RECITALS

  	
   

  	
  1

  
	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
  2

  
	
   

  	
  SECTION 1.1.

  	
  Certain Defined
  Terms

  	
  2

  
	
   

  	
  SECTION 1.2.

  	
  Other
  Definitional Provisions

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II CORPORATE GOVERNANCE

  	
  9

  
	
   

  	
  SECTION 2.1.

  	
  Board
  Representation

  	
  9

  
	
   

  	
  SECTION 2.2.

  	
  Committees

  	
  11

  
	
   

  	
  SECTION 2.3.

  	
  Consent Rights

  	
  12

  
	
   

  	
  SECTION 2.4.

  	
  Available
  Financial Information

  	
  14

  
	
   

  	
  SECTION 2.5.

  	
  Access

  	
  15

  
	
   

  	
  SECTION 2.6.

  	
  Termination of
  Rights; Additional Rights

  	
  15

  
	
   

  	
  SECTION 2.7.

  	
  Recusal;
  Corporate Opportunities

  	
  16

  
	
   

  	
  SECTION 2.8.

  	
  Conversion of
  Share of Class C Common Stock Upon an Initial

  	
   

  
	
   

  	
   

  	
    Public
  Offering

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE III TRANSFERS

  	
  17

  
	
   

  	
  SECTION 3.1.

  	
  Rights and
  Obligations of Transferees

  	
  17

  
	
   

  	
  SECTION 3.2.

  	
  Restrictions on
  Transfers by Institutional Stockholders

  	
  17

  
	
   

  	
  SECTION 3.3.

  	
  Right of First
  Offer

  	
  18

  
	
   

  	
  SECTION 3.4.

  	
  Right of Co-Sale
  on Transfers by Stockholders

  	
  20

  
	
   

  	
  SECTION 3.5.

  	
  Institutional
  Stockholders’ Drag Along Right

  	
  21

  
	
   

  	
  SECTION 3.6.

  	
  Void Transfers

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV EQUITY PURCHASE RIGHTS

  	
  23

  
	
   

  	
  SECTION 4.1.

  	
  Equity Purchase
  Rights

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V MISCELLANEOUS

  	
  25

  
	
   

  	
  SECTION 5.1.

  	
  Stockholder
  Indemnification; Reimbursement of Expenses

  	
  25

  
	
   

  	
  SECTION 5.2.

  	
  Termination

  	
  26

  
	
   

  	
  SECTION 5.3.

  	
  Amendments and
  Waivers

  	
  27

  
	
   

  	
  SECTION
  5.4.

  	
  Successors,
  Assigns and Transferees

  	
  27

  
	
   

  	
  SECTION 5.5.

  	
  Legend

  	
  27

  
	
   

  	
  SECTION 5.6.

  	
  Non-Competition

  	
  27

  
	
   

  	
  SECTION 5.7.

  	
  Notices

  	
  30

  
	
   

  	
  SECTION 5.8.

  	
  Further
  Assurances

  	
  31

  
	
   

  	
  SECTION 5.9.

  	
  Entire Agreement

  	
  31

  
	
   

  	
  SECTION 5.10.

  	
  Restrictions on
  Other Agreements; Bylaws

  	
  31

  
	
   

  	
  SECTION 5.11.

  	
  Delays or
  Omissions

  	
  31

  
	
   

  	
  SECTION 5.12.

  	
  Governing Law;
  Jurisdiction; Waiver of Jury Trial

  	
  31

  
	
   

  	
  SECTION 5.13.

  	
  Severability

  	
  32

  
	
   

  	
  SECTION 5.14.

  	
  Enforcement

  	
  32

  
	
   

  	
  SECTION 5.15.

  	
  Titles and
  Subtitles

  	
  32

  

 

-i-

 

	
   

  	
  SECTION 5.16.

  	
  No Recourse

  	
  32

  
	
   

  	
  SECTION 5.17.

  	
  Counterparts;
  Facsimile Signatures

  	
  32

  
	
   

  	
  SECTION 5.18.

  	
  Fees

  	
  32

  
	
   

  	
  SECTION 5.19.

  	
  Other
  Stockholder Agreements

  	
  33

  

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Schedules

  	
   

  
	
   

  	
  Schedule I — Business Lines

  	
   

  
	
   

  	
  Exhibits

  	
   

  
	
   

  	
  Exhibit A — Assignment and Assumption
  Agreement

  	
   

  

 

 

-ii-

 

THIS STOCKHOLDERS AGREEMENT
(this “Agreement”) is entered as of October 4, 2004, among JOSTENS
HOLDING CORP., a Delaware corporation (the “Company”), and each of the
stockholders of the Company whose name appears on the signature pages hereof
(each a “Stockholder” and collectively, the “Stockholders”).

RECITALS 

WHEREAS, pursuant to the
Contribution Agreement, dated as of July 21, 2004 (the “Contribution
Agreement”), between the Company and Fusion Acquisition LLC, a Delaware
limited liability company (the “KKR Investor”), the KKR Investor has
received in exchange for the contribution of the capital stock of AHC I
Acquisition Corporation and Von Hoffmann Holdings Inc. (i) 2,664,356 shares of
the Company’s Class A common stock, par value $0.01 per share (the “Class A
Common Stock”), representing, as of the date hereof, 44.85% of the issued
and outstanding shares of the Company’s Common Stock (as defined below) and
(ii) one share of the Company’s Class C Common Stock, par value $0.01 per share
(the “Class C Common Stock” and together with the Class A Common Stock,
the “Common Stock”) initially representing 4.8% of the voting power of
the Company;

WHEREAS, as of the date hereof, DLJ Merchant Banking
Partners III, L.P., DLJ Offshore Partners III-1, C.V., DLJ Offshore Partners
III-2, C.V., DLJ Offshore Partners III, C.V., DLJ MB Partners III GmbH &
Co. KG, Millennium Partners II, L.P. and MBP III Plan Investors, L.P.
(collectively, the “DLJMB Funds”) beneficially own 2,664,357 shares of
the Class A Common Stock, representing, as of the date hereof, 44.85% of the
issued and outstanding shares of the Company’s Common Stock;

WHEREAS, as of the date hereof, NIB Capital Private
Equity Co-Investments 2000 C.V., NIB Capital Private Equity Later Stage
Co-Investments Custodian II B.V., Ontario Municipal Employees Retirement Board,
New York Life Capital Partners, L.P., The Northwestern Mutual Life Insurance
Company, C-Squared CDO Ltd., CCC/Omni Investment Partners, L.P. (each a “Syndicate
Stockholder” and together the “Syndicate Stockholders”), each of
whom is a party to that certain Stock Purchase and Stockholders Agreement among
the Company, Jostens Intermediate Holdings Corp., the DLJMB Funds and the
syndicate stockholders parties thereto, dated as of September 3, 2003 (the “Syndicate
Agreement”), and those individuals (the “Management Stockholders”)
that are a party to that certain Stockholders Agreement among the Company, the
DLJMB Funds and the management stockholders parties thereto, dated as of July
29, 2003 (the “Management Agreement” and, together with the Syndicate
Agreement, the “Other Stockholder Agreements”), collectively
beneficially own 564,986 shares of the Class A Common Stock, representing, as
of the date hereof, 9.5% of the issued and outstanding shares of the Company’s
Common Stock;

WHEREAS, as of the date hereof, Marc Reisch
beneficially owns 46,824 shares of the Class A Common Stock, representing as of
the date hereof, 0.8% of the issued and outstanding shares of the Company’s
Common Stock; and

WHEREAS, the KKR Investor,
the DLJMB Funds (each an “Institutional Stockholder” and together the “Institutional
Stockholders”) desire to promote the interests of the Company and the
mutual interests of the Stockholders by establishing herein certain terms and

 

 

 conditions upon which the shares of Common Stock will be held,
including provisions restricting the transfer of Common Stock, and providing
for certain other matters.

NOW, THEREFORE, in
consideration of the foregoing recitals and of the mutual promises hereinafter
set forth, the Company and the Stockholders hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1. Certain Defined Terms.  As used herein, the following terms shall
have the following meanings:

“Acceptance Notice”
has the meaning assigned to such term in Section 3.3(b).

“Affiliate” means,
with respect to any Person, (i) any Person directly or indirectly controlling,
controlled by or under common control with such Person, (ii) any Person
directly or indirectly owning or controlling ten percent (10%) or more of any
class of outstanding equity securities of such Person or (iii) any officer,
director, general partner or trustee of any such Person described in clause (i)
or (ii).

“Agreement” has the
meaning assigned to such term in the recitals.

“beneficial owner” or
“beneficially own” has the meaning given such term in Rule 13d-3 under
the Exchange Act and a Person’s beneficial ownership of Common Stock or other
voting securities of the Company shall be calculated in accordance with the
provisions of such Rule; provided, however, that for purposes of
determining beneficial ownership, (i) a Person shall be deemed to be the
beneficial owner of any security which may be acquired by such Person, whether
within sixty (60) days or thereafter, upon the conversion, exchange or exercise
of any warrants, options, rights or other securities and (ii) no Person shall
be deemed to beneficially own any security solely as a result of such Person’s
execution of this Agreement.

“Board” means the
Board of Directors of the Company.

“Business Day” means
any day that is not a Saturday, a Sunday or other day on which banks are
required or authorized by law to be closed in the City of New York.

“Business Line” means
each of the Company’s business lines set forth on Schedule I.

“Bylaws” means the
Bylaws of the Company, as in effect on the date hereof and as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with the terms thereof, the terms of the Charter, the terms of this Agreement
and applicable law.

“CEO Designee” has
the meaning assigned to such term in Section 2.1(a).

 

2

 

“Change of Control”
means (i) the sale of all or substantially all of the assets of the Company to
an Unaffiliated Person; (ii) a sale resulting in more than 50% of the voting
securities 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 Institutional Stockholders to designate or elect a majority of
the Board (or the board of directors (or similar body) 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) any of the Institutional Stockholders, (y) an Affiliate of
any of the Institutional Stockholders, or (z) an entity in which any of the
Institutional Stockholders, or any member of the respective Institutional
Stockholders holds, directly or indirectly, a majority of the voting interests in
such entity.

“Charter” means the
Amended and Restated Certificate of Incorporation of the Company, as in effect
on the date hereof and as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof and the terms
of this Agreement and applicable law.

“Class A Common Stock”
has the meaning set forth in the recitals.

“Class C Common Stock”
has the meaning set forth in the recitals.

“Closing” has the
meaning set forth in the Contribution Agreement.

“Closing Date” has
the meaning set forth in the Contribution Agreement.

“Common Stock” has
the meaning assigned to such term in the recitals.

“Company” has the
meaning assigned to such term in the recitals.

“Company
Opportunity” has the meaning assigned to such term in Section 2.7.

“Competitive Board
Members” has the meaning assigned to such term in Section 2.7.

“Competing Bidder”
has the meaning assigned to such term in Section 2.7.

“Contribution Agreement”
has the meaning assigned to such term in the recitals.

“control” (including
the terms “controlled by” and “under common control with”), with
respect to the relationship between or among two or more Persons, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the affairs or management of a Person, whether through the
ownership of voting securities, as trustee or executor, by contract or
otherwise.

“Co-Sale Participant”
has the meaning assigned to such term in Section 3.4(a).

“Director” means any
member of the Board.

 

3

 

“DLJMB” has the
meaning assigned to such term in Section 5.18(a).

“DLJMB Funds” has the
meaning assigned to such term in the recitals.

+“DLJMB Funds Designees”
has the meaning assigned to such term in Section 2.1(a)(ii).

“Drag Along Notice”
has the meaning assigned to such term in Section 3.5(d).

“Drag Transaction”
has the meaning assigned to such term in Section 3.5(a).

“Dragged Stockholder”
has the meaning assigned to such term in Section 3.5(a).

“Equity Purchase Right”
has the meaning assigned to such term in Section 4.1(b).

“Equity Purchase Shares”
has the meaning assigned to such term in Section 4.1(b).

“Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

“Exempt Transaction”
means any acquisition or disposition (whether through merger, consolidation or
otherwise) (i) which has a purchase price (including any assumed indebtedness
and valuing any non-cash consideration at its Fair Market Value) of less than
five percent (5%) of the total consolidated assets of the Company and its
Subsidiaries as of the date of the execution of the definitive agreement
relating thereto (based on the total consolidated assets shown in the most
recent annual audited or quarterly unaudited consolidated balance sheet of the
Company and its Subsidiaries prepared in accordance with GAAP) and (ii) which,
together with all other Exempt Transactions after the Closing Date, has an
aggregate purchase price (including any assumed indebtedness and valuing any
non-cash consideration at its Fair Market Value), of less than twenty percent
(20%) of the total consolidated assets of the Company and its Subsidiaries as
of the date of the execution of the definitive agreement relating thereto
(based on the total consolidated assets shown in the most recent annual audited
or quarterly unaudited consolidated balance sheet of the Company and its
Subsidiaries prepared in accordance with GAAP); provided that no
transaction described herein with any Affiliate of any Stockholder shall
constitute an Exempt Transaction.

“Exercising Stockholder”
has the meaning assigned to such term in Section 4.1(e).

“Fair Market Value”
means with respect to Common Stock (i) from and after the consummation of an
IPO, the average of the closing sale prices of shares on the stock exchange or
national market on which the shares are principally trading for a period of 30
trading days ending on the date in question, or (ii) prior to the consummation
of an IPO, the fair market value of the shares as determined in good faith by
the Board on the date in question; and with respect to any other non-cash
consideration, the fair market value of such non-cash consideration as
determined in good faith  by the Board
on the date in question.

 

4

 

“First Offer” has the
meaning assigned to such term in Section 3.3(b).

“First Offer Price”
has the meaning assigned to such term in Section 3.3(a).

“Fully-Diluted Basis”
means the number of shares of Common Stock, without duplication, which are
issued and outstanding or owned or held, as applicable, at the date of
determination plus the number of shares of Common Stock issuable pursuant to
any securities, warrants, rights or options then outstanding, convertible into
or exchangeable or exercisable for (whether or not subject to contingencies or
passage of time, or both) shares of Common Stock.

“GAAP” means
generally accepted accounting principles, as in effect in the United States of
America from time to time.

“Group” has the
meaning assigned to such term in Section 13(d)(3) of the Exchange Act.

“Initial Equity Purchase
Right” has the meaning assigned to such term in Section 4.1(a).

“Institutional
Stockholders” has the meaning assigned to such term in the recitals.

“Institutional
Stockholder Designees” has the meaning assigned to such term in Section
2.1(a).

“IPO” means an
offering of Common Stock pursuant to a registration statement filed in
accordance with the Securities Act.

“Issuance Notice” has
the meaning assigned to such term in Section 4.1(c).

“KKR Investor” has
the meaning assigned to such term in the recitals.

“KKR Investor Designees”
means any Director designated by the KKR Investor pursuant to Section 2.1(a) of
this Agreement.

“Lead Institutional
Stockholder” has the meaning assigned to such term in Section 3.5(a).

“Losses” has the
meaning assigned to such term in Section 5.1(a).

“Management Agreement”
has the meaning assigned to such term in the recitals.

“Management Stockholders”
has the meaning assigned to such term in the recitals.

“New Securities”
means shares of Common Stock or any securities, warrants, rights or options
convertible into or exchangeable or exercisable for shares of Common Stock,
other than (i) securities offered and sold in an IPO, (ii) securities issued
for the acquisition of another Person by merger, purchase of all or
substantially all of the assets of another Person or other reorganization
resulting in the ownership by the Company, directly or indirectly, of not less

 

5

 

than 51% of the voting power
of such Person, (iii) securities issued pursuant to the Company’s current or
future stock option plans or employee stock purchase or similar plans approved
by the Board, (iv) shares of Common Stock or such other securities issued to
vendors, strategic partners or lenders pursuant to any bank financing
arrangement approved by the Board (including any securities issued upon
exercise of such securities), (v) securities issued as a result of any stock
split, stock dividend or reclassification of shares of Common Stock,
distributable on a pro rata basis to all holders of shares of Common Stock, or
(vi) securities issued upon exercise or conversion of any securities.

“Non-Purchasing
Stockholder” has the meaning assigned to such term in Section 4.1(e).

“Observer” has the
meaning assigned to such term in Section 2.1(j).

“Offer Notice” has
the meaning assigned to such term in Section 3.3(a).

“Offered Securities”
has the meaning assigned to such term in Section 3.3(a).

“Offering Holder” has
the meaning assigned to such term in Section 3.3(a).

“Original Shares”
shall mean, when used in reference to any one or more Stockholders, the shares
of Common Stock held by such Stockholder upon the Closing, or any shares or
other securities which such shares of common stock may have been converted into
or exchanged for in connection with any exchange, reclassification, dividend,
distribution, stock split, combination, subdivision, merger, spin-off,
recapitalization, reorganization or similar transaction.

“Other Stockholders
Agreements” has the meaning assigned to such term in the recitals.

“Permitted Transferee”
shall mean (i) the owners of such Stockholder’s equity interests receiving capital
stock of the Company in connection with the liquidation of, or a distribution
with respect to an equity interest in, such Stockholder; or (ii) an Affiliate
(other than any “portfolio company” described below) of a Stockholder; provided,
however, that in both cases such Transferee shall agree in a writing in
the form attached as Exhibit A hereto to be bound by and to comply with all
applicable provisions of this Agreement; provided, further, however,
that in no event shall (A) the Company or any of its Subsidiaries,
(B) any “portfolio company” (as such term is customarily used among
institutional investors) of any Stockholder or any entity controlled by any
portfolio company of any Stockholder or (C) any Company Competitor (whether or
not an Affiliate of the Transferring Stockholder) constitute a “Permitted
Transferee”.

“Person” means any
individual, corporation, limited liability company, limited or general
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivisions
thereof or any Group comprised of two or more of the foregoing.

“Pro Rata Portion”
means:

 

6

 

(i)            for the purposes of Article IV, with
respect to any Stockholder, on any issuance date for New Securities, the number
or amount of New Securities equal to the product of (i) the total number or
amount of New Securities to be issued by the Company on such date and (ii) the
fraction determined by dividing (A) the number of shares of Common Stock
beneficially owned by such Stockholder and its Affiliates immediately prior to
such issuance by (B) the total number of shares of Common Stock outstanding on
such date immediately prior to such issuance on a Fully-Diluted Basis; provided
that, with respect to the DLJMB Funds, the number of shares of Common Stock
beneficially owned immediately prior to such issuance by such Stockholder shall
include the total number of shares of Common Stock then owned by the Syndicate
Stockholders and the Management Stockholders;

(ii)           for the purposes of Section 3.3, with
respect to any ROFO Recipient, with respect to any proposed Transfer of Offered
Securities, on the applicable Transfer Date, the number or amount of Offered
Securities equal to the product of (i) the total number or amount of Offered
Securities to be offered to the ROFO Recipients and (ii) the fraction
determined by dividing (A) the number of shares of Common Stock beneficially
owned by such ROFO Recipient and its Affiliates as of such date by (B) the
total number of shares of Common Stock beneficially owned by all of the ROFO
Recipients and their Affiliates as of such date; and

(iii)          for the purposes of Section 3.4, with
respect to any Co-Sale Participant, with respect to any proposed Transfer of
Transferred Securities, on the applicable Transfer Date, the number or amount
of Transferred Securities equal to the product of (i) the total number or
amount of Transferred Securities to be Transferred to the proposed Transferee
and (ii) the fraction determined by dividing (A) the number of shares of Common
Stock beneficially owned by such Co-Sale Participant and its Affiliates as of
such date by (B) the total number of shares of Common Stock beneficially owned
by all of the Stockholders and their Affiliates as of such date.

“Pro Rata Repurchase”
has the meaning assigned to such term in Section 2.3(a).

“Registration Rights
Agreement” means the Registration Rights Agreement, dated as of the date
hereof, among the Company and each of the Institutional Stockholders.

“Required Holders”
has the meaning assigned to such term in Section 2.3.

“Reserved Employee Shares”
shall mean additional options to purchase shares of Common Stock (and shares of
Common Stock issuable upon the exercise thereof) to employees, officers,
directors or consultants of the Company or its Subsidiaries pursuant to any
stock option, employee stock purchase or similar equity-based plans approved by
the Board (as appropriately adjusted for any subsequent exchange, reclassification,
dividend, distribution, stock split, combination, subdivision, merger,
spin-off, recapitalization, reorganization or similar transaction), including
the 2004 Stock Option Plan for Key Employees of the Company and its
Subsidiaries.

“ROFO Recipients” has
the meaning assigned to such term in Section 3.3(a).

 

7

 

“Section 3.3 Non-Electing
Shares” has the meaning assigned to such term in Section 3.3(c).

“Section 3.4 Non-Electing
Shares” has the meaning assigned to such term in Section 3.4(a).

“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

“Stockholder” has the
meaning assigned to such term in the recitals.

“Stockholder Indemnitee”
has the meaning assigned to such term in Section 5.1(a).

“Subsidiary” means
(i) any corporation of which a majority of the securities entitled to vote
generally in the election of directors (or persons performing similar
functions) thereof, at the time as of which any determination is being made,
are owned by another entity, either directly or indirectly, and (ii) any
joint venture, general or limited partnership, limited liability company or
other legal entity in which an entity is the record or beneficial owner,
directly or indirectly, of a majority of the voting interests or the general
partner.

“Syndicate Agreement”
has the meaning assigned to such term in the recitals.

“Syndicate Stockholders”
has the meaning assigned to such term in the recitals.

“Syndicate Stockholders
Agreements” has the meaning assigned to such term in the recitals.

“Transfer” means,
directly or indirectly, to sell, transfer, assign, pledge, encumber,
hypothecate or similarly dispose of, either voluntarily or involuntarily, or to
enter into any contract, option or other arrangement or understanding with
respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation
or similar disposition of, any shares of Common Stock beneficially owned by a
Person or any interest in any shares of Common Stock beneficially owned by a
Person.

“Transferee” means
any Person to whom any Stockholder or any Transferee thereof Transfers shares
of Common Stock of the Company in accordance with the terms hereof.

“Transfer Notice” has
the meaning assigned to such term in Section 3.4(a).

“Transferred Securities”
has the meaning assigned to such term in Section 3.4(a).

“Transferring Stockholder”
has the meaning assigned to such term in Section 3.4(a).

“Voting Common Stock”
means, collectively, the Class A Common Stock and the Class C Common Stock.

 

8

 

SECTION 1.2. Other Definitional
Provisions.  The words “hereof,”
“herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Article and Section references are to this
Agreement unless otherwise specified. 
Whenever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation.”

The meanings given to terms
defined herein shall be equally applicable to both the singular and plural
forms of such terms.

ARTICLE II

CORPORATE
GOVERNANCE

SECTION 2.1.
Board Representation. 
(a)   Subject to Sections 2.6 and 5.6(c), effective as of the
Closing, the Board shall be comprised of nine (9) Directors of whom:

(i)            four (4) shall be designees of the
KKR Investor (such persons, the “KKR Investor Designees”);

(ii)           four (4) shall be designees of the
DLJMB Funds (such persons, the “DLJMB Funds Designees”, and together
with the KKR Investor Designees, the “Institutional Stockholder Designees);

(iii)          one (1) designee shall be the Chief
Executive Officer of the Company in office from time to time (the “CEO
Designee”), who shall initially be Marc Reisch;

provided that each time
an Institutional Stockholder together with its Affiliates acquires shares of
Common Stock (either in one or multiple acquisitions or Transfers) that in the
aggregate result in the Institutional Stockholder owning shares of Common Stock
representing an additional 12.5% of the issued and outstanding shares of Common
Stock, such Institutional Stockholder shall have the right to designate an
additional Director and the number of Directors shall be increased by one.  Prior to the completion of an IPO, Marc
Reisch shall be the Chairman of the Board throughout his tenure as Chief
Executive Officer of the Company; provided that the Bylaws shall at all
times during Marc Reisch’s tenure as Chief Executive Officer and Chairman
provide that each and any Director shall have the authority to call a special
meeting of each of the Board and the Stockholders.

(b)  The Company
and the Institutional Stockholders shall take such action as may be required
under applicable law to cause the Board to consist of the number of Directors
specified in clause (a).

(c)  The Company
agrees to include in the slate of nominees recommended by the Board the
Institutional Stockholder Designees and the CEO Designee and to use its
commercially reasonable efforts to cause the election of each such designee to
the Board, including nominating such individuals to be elected as Directors as
provided herein.

 

9

 

(d)  In the event
that a vacancy is created at any time by the death, disability, retirement,
resignation or removal (with or without cause) of any Director designated
pursuant to clause (i) or (ii) of Section 2.1(a), the remaining Directors and
the Company shall cause the vacancy created thereby to be filled by a new
designee of the Institutional Stockholder who designated such Director as soon
as possible, and the Company hereby agrees to take, at any time and from time
to time, all actions necessary to accomplish the same.

(e)  Each of the
Institutional Stockholders agrees to vote, or act by written consent with
respect to, any shares of Voting Common Stock beneficially owned by it, at each
annual or special meeting of stockholders of the Company at which Directors are
to be elected or to take all actions by written consent in lieu of any such
meeting as are necessary, to cause the Institutional Stockholder Designees and
the CEO Designee to be elected to the Board. 
Each of the Institutional Stockholders agrees to use its commercially
reasonable efforts to cause the election of each such designee to the Board,
including nominating such individuals to be elected as Directors.  In the event that a vacancy is created at
any time by the death, disability, retirement, resignation or removal (with or
without cause) of any Director designated pursuant to clause (i), (ii) or (iii)
of Section 2.1(a) and the remaining Directors pursuant to Section 2.1(d) have
caused the vacancy created thereby to be filled by a new designee of the
applicable Institutional Stockholder, then in such case the other Institutional
Stockholder hereby agrees to take, at any time and from time to time, all
actions necessary to accomplish the same. 
Upon the written request of any Institutional Stockholder, the other
Institutional Stockholder shall vote, or act by written consent with respect
to, all shares of Voting Common Stock beneficially owned by him or it and
otherwise take or cause to be taken all actions necessary to remove any
Director designated by such Institutional Stockholder and to elect any
replacement Director designated as provided in this Section 2.1(e).  Unless any Institutional Stockholder shall
otherwise request in writing, no other Institutional Stockholder shall take any
action to cause the removal of any Directors designated by such Institutional
Stockholder.

(f)  In the event
an Institutional Stockholder shall cease to have the right to designate a
Director in accordance with Section 2.6, the designees of such Institutional
Stockholder selected by such Institutional Stockholder shall resign and the
Directors remaining in office shall decrease the size of the Board to eliminate
such vacancy and no consent under Section 2.3(a) shall be required in
connection with such decrease.

(g)  The Company
shall reimburse each Institutional Stockholder Designee and the CEO Designee
for their reasonable out-of-pocket expenses incurred by them for the purpose of
attending meetings of the Board or the boards of directors of any Subsidiary of
the Company or any committees thereof.

(h)  In the event
that any Institutional Stockholder shall have a designee or Affiliate (Mr.
Reisch shall not be deemed an Affiliate for this purpose) serving on the board
of directors of any Subsidiary of the Company, the other Institutional
Stockholder shall have the right to equal representation on such board of
directors in proportion to such other Institutional Stockholder’s
representation on the Board so long as the other Institutional Stockholder
continues to have the right described in Section 2.1(a) to appoint designees to
the Board.

(i)  The rights of
an Institutional Stockholder pursuant to this Section 2.1 are personal to the
Institutional Stockholder and shall not be exercised by any Transferee other
than (i) any Permitted

 

10

 

Transferee or (ii) any Transferee receiving not less
than two-thirds (2/3 or 66.67%) of such Institutional Stockholder’s Original
Shares.

(j)  An
Institutional Stockholder may transfer all but not less than all of its rights
under this Section 2.1 to any Transferee receiving not less than two-thirds
(2/3 or 66.67%) of the Institutional Stockholder’s Original Shares and upon
transfer of such rights, such Transferee shall assume any and all rights of the
Institutional Stockholder under this Section 2.1, thereby divesting the
Transferring Institutional Stockholder of all such rights previously held.  Such Transferee shall also have the rights
set forth in Section 2.3(d).  Any
Transferee receiving shares from the Institutional Stockholder resulting in the
Transferee owning at least 10% of the then issued and outstanding shares of
Common Stock on a Fully-Diluted Basis (but less than two-thirds (2/3 or 66.67%
of the Institutional Stockholder’s Original Shares) shall be entitled to
appoint one representative (the “Observer”) to the Board for the sole
purpose of attending regularly scheduled Board meetings.  The Observer shall (i) receive all notices
and information that the Company distributes to the Board in connection with
regularly scheduled meetings (but not special meetings) of the Board at the
same time and manner as given to the members of the Board and (ii) have the
right to attend and observe in a non-voting capacity all regularly scheduled meetings
(but not special meetings) of the Board; provided, however, that
the Company reserves the right to exclude the Observer from access to any
material or meeting or portion thereof if the Company believes on the advice of
counsel that such exclusion is reasonably necessary to preserve the
attorney-client privilege; and, provided  further, that the
Observer shall agree to maintain the confidentiality of all Company information
and all proceedings of the Board to the same extent as he would be required to
do if he were a director of the Company. 
At any time the Transferee holds less than 5% of the issued and
outstanding Common Stock of the Company on a Fully-Diluted Basis, the
Transferee shall lose the foregoing rights.

SECTION 2.2. Committees. 
(a)   So long as an Institutional Stockholder has the right to
designate at least one (1) Director pursuant to Section 2.1, the Company shall
cause each executive committee, compensation committee, audit committee,
investment committee, nominating committee or other significant committee of
the Board (including any committee performing the functions usually reserved
for the committees described above) to include at least one (1) of each such
Institutional Stockholder’s designees; provided that the composition of
each such committee shall reflect the relative number of Institutional
Stockholder Designees for each Institutional Stockholder.

(b)           For so long as each of the DLJMB
Funds and the KKR Investor have the right to designate at least two (2)
Directors pursuant to Section 2.1, there shall be an executive committee of the
Board, which shall be composed of (i) the CEO Designee, (ii) one (1) KKR
Designee and (iii) one (1) DLJMB Funds Designee and shall, by unanimous
decision or by a vote of both the KKR Designee and the DLJMB Funds Designee,
exercise all decision making authority on behalf of the Board other than those
matters that are, under Delaware law, expressly reserved to the entire
Board.  The Company shall not permit the
executive committee of the Board (including any committee performing the
functions usually reserved for such committee) to vote on or act by written
consent with respect to any matter brought before it without bringing such
matter to the full membership of the committee for consideration.

 

11

 

(c)           The Company shall cause (i) a DLJMB
Funds Designee to serve as the initial Chairman of the compensation committee
of the Board (including any committee performing the functions usually reserved
for such committee), (ii) a KKR Investor Designee to serve as the initial
Chairman of the audit committee of the Board (including any committee
performing the functions usually reserved for such committee) and (ii) the
Chairmanship of each of the audit and compensation committees of the Board to
be rotated annually between a KKR Investor Designee and a DLJMB Funds Designee.

SECTION 2.3.
Consent Rights. 
(a)  Subject to Sections 2.3(c), 2.6 and 5.6(d), in addition
to any vote or consent of the Board or the stockholders of the Company required
by law or the Charter, and notwithstanding anything in this Agreement to the
contrary, the Company shall not, and shall not permit any of its Subsidiaries
to, take any of the following actions, or enter into any arrangement or contract
to do any of the following actions, without the consent in writing of the KKR
Investor and DLJMB, on behalf of the DLJMB Funds (the applicable consent being
the consent of the “Required Holders”), which shall be necessary for
authorizing, effecting or validating such transactions:

(i)            the selection, termination or
removal of the Chief Executive Officer of the Company;

(ii)           the incurrence of indebtedness for
borrowed money (including through capital leases, the issuance of debt
securities or the guarantee of indebtedness of another Person) other than the
incurrence of trade payables arising in the ordinary course of operating the
business;

(iii)          any authorization, creation (by way of
reclassification, merger, consolidation or otherwise) or issuance of any equity
securities of the Company, other than (1) the issuance of Reserved Employee
Shares, or (2) the issuance of any equity securities as consideration in, or in
connection with, a transaction approved pursuant to Sections 2.3(a) (x) or (xi)
or that does not require approval thereunder;

(iv)          any redemption, acquisition or other
purchase of any equity securities (a “Repurchase”) other than pro rata
from all Stockholders (a “Pro Rata Repurchase”);

(v)           any payment or declaration of any
dividend or other distribution on any shares of Common Stock;

(vi)          the creation of any non-wholly owned
subsidiaries, or any sale or Transfer of a Significant Subsidiary’s (as defined
in the rules promulgated under the Exchange Act on the date hereof) securities
to any Person other than the Company or a wholly owned Subsidiary of the
Company (other than any pledge of such Subsidiary’s stock pursuant to a
financing approved by the Board);

(vii)         the creation or material amendment of
any stock option, employee stock purchase or similar equity-based plan for
management or employees, or any increase in the number of Reserved Employee
Shares other than to comply with applicable law;

 

12

 

(viii)        except as required by applicable law,
any amendment, repeal or alteration of the Charter or the Bylaws, or the
organizational documents of any Significant Subsidiary of the Company, whether
by or in connection with a merger or consolidation or otherwise (other than in
connection with a merger to or with the Company or a wholly owned Subsidiary);

(ix)           any increase or decrease in the size
of the Board, committees of the Board, and boards and committees of
Subsidiaries of the Company;

(x)            any (A) acquisition of the stock or
assets of any Person, or the acquiring by any other manner of any business,
properties, assets, or Persons, in one transaction or a series of related
transactions, or (B) dispositions of assets of the Company other than in either
case, (I) in the ordinary course of business, (II) by the Company or a wholly
owned Subsidiary of the Company to or from a wholly owned Subsidiary of the
Company or the Company or (III) an Exempt Transaction;

(xi)           any (A) merger or consolidation with
or into any other Person, or any acquisition of another Person, whether in a
single transaction or a series of related transactions, other than (I) between
the Company and a wholly owned Subsidiary of the Company or between two wholly
owned Subsidiaries of the Company and (II) any Exempt Transaction, (B) proposed
transaction or series of related transactions involving a Change of Control of
the Company or (C) proposed Transfer by a Stockholder except to a Permitted
Transferee and as permitted by Section 3.2 hereof;

(xii)          any plan of liquidation, dissolution
or wind-up of the Company;

(xiii)         any transaction with or involving any
Affiliate of the Company or any Affiliate of any Stockholder of the Company
that beneficially owns in excess of ten percent (10%) of the Voting Common
Stock of the Company, other than (A) transactions contemplated by this
Agreement, (B) transactions relating to the employment or compensation of
executives (subject to any consent required by any other clause of this Section
2.3) and (C) any Transfer to a Permitted Transferee;

(xiv)        any Repurchase other than (A) a Pro Rata
Repurchase or (B) a Repurchase from an employee in connection with such
employee’s termination of employment with the Company or any Subsidiary;

(xv)         any settlement of any claims or
litigation material to the Company and its Subsidiaries taken as a whole; or

(xvi)        any material change in the business
strategy or operations of the Company and its Subsidiaries, taken as a whole.

(b)  In connection
with any vote or action by written consent of the Stockholders of the Company
relating to any matter requiring consent as specified in Section 2.3(a), each
Stockholder agrees, with respect to any shares of Common Stock beneficially
owned by such Stockholder with respect to which he or it has the power to vote,
(i) to vote against (and not act by written consent to approve) such matter if
such matter has not been consented to by the Required Holders in

 

13

 

accordance with Section 2.3(a) and (ii) to take or
cause to be taken, upon the written request of a Stockholder, all other
reasonable actions, at the expense of the Company, required, to the extent
permitted by law, to prevent the taking of any action by the Company with
respect to a matter unless such matter has been consented to by the Required
Holders in accordance with Section 2.3(a).

(c)  Notwithstanding
Section 2.3(a), at such time as an Institutional Stockholder (together with its
Affiliates) shall cease to own a number of shares of Common Stock equal to at
least (i) twenty-five percent (25%) of the shares of Common Stock then issued
and outstanding, such Institutional Stockholder shall cease to have any consent
rights pursuant to Section 2.3(a) other than the rights described under clauses
(xi), (xii) and (xiii) of such Section, and (ii) fifteen percent (15%) of the
shares of Common Stock then issued and outstanding, such Institutional
Stockholder shall cease to have the right to have any consent rights pursuant
to Section 2.3(a).

(d)  Any
Transferee who, under Section 2.1(j) receives the rights of the Institutional
Stockholder under Section 2.1 of this Agreement, also receives any and all
rights of consent under this Section 2.3, thereby divesting the Transferring
Institutional Stockholder and any Permitted Transferee described in clause (ii)
of the definition thereof of all such rights previously held.

SECTION 2.4.
Available Financial Information. 
(a)  The Company will deliver, or will cause to be delivered,
the following to each Stockholder until such time as such Stockholder and its Affiliates
shall cease to own any shares of Common Stock:

(i)            as soon as available after the end
of each month and in any event within thirty (30) days thereafter, a
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such month and consolidated statements of operations, income, cash flows,
retained earnings and stockholders’ equity of the Company and its Subsidiaries,
for each month and for the current fiscal year of the Company to date, prepared
in accordance with GAAP (subject to normal year-end audit adjustments and the
absence of notes thereto), together with a comparison of such statements to the
corresponding periods of the prior fiscal year;

(ii)           a proposed (which may not be in final
form) annual budget and a business plan and financial forecasts for the Company
for the next fiscal year of the Company, no later than thirty (30) days before
the beginning of the Company’s next fiscal year, in such manner and form as
approved by the Board, which shall include at least a projection of income and
a projected cash flow statement for each fiscal quarter in such fiscal year and
a projected balance sheet as of the end of each fiscal quarter in such fiscal
year, in each case prepared in reasonable detail, with appropriate presentation
and discussion of the principal assumptions upon which such budgets and
projections are based; it being recognized by such holders that such budgets
and projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by them may differ from the
projected results.  Any material changes
in such business plan shall be delivered to the Stockholders as promptly as
practicable after such changes have been approved by the Board;

(iii)          as soon as available after the end of
each fiscal year of the Company, and in any event within ninety (90)  days thereafter, (A) the annual financial
statements

 

14

 

required to be filed by the
Company pursuant to the Exchange Act or (B) a consolidated balance sheet of the
Company and its Subsidiaries as of the end of such fiscal year, and
consolidated statements of income, retained earnings and cash flows of the
Company and its Subsidiaries for such year, prepared in accordance with GAAP
and setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and accompanied by the opinion of
independent public accountants of recognized national standing selected by the
Company, and a Company-prepared comparison to the Company’s business plan for
such year as approved by the Board; and

(iv)          as soon as available after the end of
the first, second and third quarterly accounting periods in each fiscal year of
the Company, and in any event within forty-five (45) days thereafter, (A) the
quarterly financial statements required to be filed by the Company pursuant to
the Exchange Act or (B) a consolidated balance sheet of the Company and its
Subsidiaries as of the end of each such quarterly period, and consolidated
statements of income, retained earnings and cash flows of the Company and its
Subsidiaries for such period and for the current fiscal year to date, prepared
in accordance with GAAP (subject to normal year-end audit adjustments and the
absence of notes thereto) and setting forth in comparative form the figures for
the corresponding periods of the previous fiscal year and to the Company’s
business plan then in effect as approved by the Board, all in reasonable detail
and certified by the principal financial or accounting officer of the Company.

(b)  Other
Information.  The Company covenants
and agrees to deliver to each Stockholder until such time as such Stockholder
shall cease to own any shares of Common Stock, with reasonable promptness, such
other information and data (including such information and reports made
available to any lender of the Company or any of its Subsidiaries under any
credit agreement or otherwise) with respect to the Company and each of its
Subsidiaries as from time to time may be reasonably requested by any such
holder.

SECTION 2.5. Access.  The Company shall, and shall cause its
Subsidiaries, officers, directors, employees, auditors and other agents to,
until such time as such Stockholder shall cease to own any shares of Common
Stock, (a) afford the officers, employees, auditors and other agents of such
Stockholder, during normal business hours and upon reasonable notice reasonable
access at all reasonable times to its officers, employees, auditors, legal
counsel, properties, offices, plants and other facilities and to all books and
records, and (b) afford such Stockholder the opportunity to discuss the
Company’s affairs, finances and accounts with the Company’s officers from time
to time as each such Stockholder may reasonably request.

SECTION
2.6. Termination of Rights; Additional Rights.  (a)  Notwithstanding anything set
forth in Article II, at such time as an Institutional Stockholder, together
with its Affiliates, shall cease to own a number of shares of Common Stock
equal to at least 5% of the shares of Common Stock then issued and outstanding,
such Institutional Stockholder shall cease to have any rights or obligations
under this Article II, other than (i) the obligation set forth in the last
sentence of Section 2.7 to keep confidential any information regarding any
Company Opportunity, which shall continue for a period of two  years thereafter and (ii) those rights set
forth in Sections 2.4 and 2.5, which shall continue for so long as such
Institutional Stockholder owns any shares of Common Stock.

 

15

 

(b)  Notwithstanding
Section 2.1, at such time as either Institutional Stockholder (together with
its Affiliates) shall cease to own a number of shares of Common Stock equal to
at least: (i) 75% of its Original Shares, such Institutional Stockholder shall
cease to have the right to designate more than three (3) Directors pursuant to
Section 2.1(a); (ii) 50% of its Original Shares, such Institutional Stockholder
shall cease to have the right to designate more than two (2) Directors pursuant
to Section 2.1(a); and (iii) 25% of its Original Shares, such Institutional
Stockholder shall cease to have the right to designate more than one (1)
Directors pursuant to Section 2.1(a).

SECTION 2.7.  Recusal; Corporate Opportunities.  (a)  Any time an Institutional
Stockholder loses its consent rights with respect to any Business Line pursuant
to Section 5.6(d), its Institutional Stockholder Designees shall recuse
themselves from any discussions or deliberations about such Business Line.

(b)  The
Institutional Stockholders shall cause any Institutional Stockholder Designees
or Observer to recuse themselves from all discussions and deliberations of the
Board, and none of the Company nor any Subsidiary of the Company shall have any
obligation to provide to such Institutional Stockholder Designees or Observer
any information regarding any acquisition, disposition, investment or similar
transaction that the Company or any Subsidiary of the Company elects to pursue
(a “Company Opportunity”) if either the Institutional Stockholder or
Transferee or, to the Institutional Stockholder’s knowledge, private equity investment funds Affiliated
with such Stockholder or Transferee, has or is entitled to designate one or
more individuals to serve on the board of directors or body serving a similar
function (such individuals being referred to as “Competitive Board Members”)
of any other Person who is competing with or that is otherwise adverse to the
Company with respect to such acquisition, disposition, investment or similar
transaction (such an other person being referred to as a “Competing Bidder”);
provided, however, that such Institutional Stockholder or
Transferee shall not be so obligated to cause its Institutional Stockholder
Designees or Observer to so recuse themselves from such discussions and
deliberations of the Board, and the respective Institutional Stockholder
Designees or Observer shall continue to be entitled to receive all information
made available to all Directors, regarding any Company Opportunity if such
Institutional Stockholder or Transferee causes such Competitor Board Members
(if any shall be in place) of the Competing Bidder to recuse themselves from
all deliberations of the Competing Bidder with respect to such Company
Opportunity.  In addition, both
Institutional Stockholders and any Transferee shall, and shall cause its
Institutional Stockholder Designees and Observer to, keep confidential any
information regarding any Company Opportunity, including the existence of such
potential acquisition, disposition, investment or similar transaction, that
such Institutional Stockholder, Institutional Stockholder Designee or Observer
learns about as a result of its participation in the Board or pursuant to
Section 2.4 or 2.5.

SECTION 2.8. Conversion of Share of Class C
Common Stock Upon an Initial Public Offering.  The parties agree that they shall do all things necessary so that
immediately prior to the consummation of an IPO the share of Class C Common
Stock shall be converted into or exchanged for a share of Class A Common Stock.

 

16

 

ARTICLE III

TRANSFERS

SECTION 3.1.
Rights and Obligations of Transferees. 
(a)  Except with the prior written consent of the Required
Holders pursuant to clause (xiii) of Section 2.3(a) (and if no Stockholder is
entitled to designate any Directors pursuant to Section 2.1 then the prior
written consent of a majority of the Board), no Transferee of any Stockholder,
except a Permitted Transferee described in clause (ii) of the definition
thereof, shall be entitled to any rights under this Agreement other than the
rights set forth in Sections 2.1(j) and 2.3(d), if applicable, the right of
co-sale set forth in Section 3.4 and the information and access rights set
forth in Sections 2.4 and 2.5.

(b)  Subject to
the last sentence of this Section 3.1(b), prior to the consummation of a
Transfer by any Stockholder or any Transferee, as a condition thereto, the
applicable Transferee or subsequent Transferee shall agree in writing in the
form attached as Exhibit A hereto to assume all of the obligations in this
Agreement applicable to the Transferring Stockholder.  Notwithstanding the foregoing, a Transferee of shares of Common
Stock shall not be bound by or entitled to any of the terms and conditions of
this Agreement if the applicable Transfer is pursuant to an effective
registration statement under the Securities Act, pursuant to Rule 144 of the
Securities Act or to non-managing members or limited partners of the
Institutional Stockholder pursuant to Section 3.2(a)(v).

SECTION
3.2. Restrictions on Transfers by Institutional Stockholders.  (a)  Until the fourth anniversary
of the Closing Date, each Institutional Stockholder hereby agrees that such
Institutional Stockholder shall not Transfer any of its shares of Common Stock
at any time other than Transfers (i) to its Permitted Transferees described in
clause (ii) of the definition thereof, (ii) following the consummation of an IPO
(subject to applicable and customary underwriter restrictions), pursuant to the
Registration Rights Agreement or Rule 144 of the Securities Act, (iii) pursuant
to Section 3.5, (iv) with the prior written consent of the Required Holders
pursuant to clause (xiii) of Section 2.3(a) (and if no Stockholder is entitled
to designate any Directors pursuant to Section 2.1 then the prior written
consent of a majority of the Board), and (v) after the consummation of an IPO,
to members or limited or general partners of the Institutional Stockholder provided
that such Institutional Stockholder shall not, pursuant to this clause (v),
Transfer more than (X) in a transaction or series of transactions, ten percent
(10%) of the Company’s total issued and outstanding shares of Common Stock in
the aggregate and (Y) more than three percent (3%) of the Company’s total
issued and outstanding shares of Common Stock within any consecutive 120 day
period, in each case measured on the date of Transfer.

(b)  Following the
fourth anniversary of the Closing Date, so long as the Company has not
completed an IPO, and subject to compliance with Sections 3.1(b), 3.3 and 3.4,
each Institutional Stockholder may freely Transfer its shares of Common Stock
without restriction, subject to compliance with applicable securities laws.

(c)  Following the
fourth anniversary of the Closing Date, if the Company has completed an IPO
(subject to applicable and customary underwriter restrictions), each
Institutional Stockholder

 

17

 

may freely Transfer its shares of Common Stock
without restriction subject to compliance with applicable securities laws.

(d)  Each
Institutional Stockholder shall as promptly as practicable provide the other
Stockholders with written notice of any Transfer made in accordance with
Section 3.2(a) or (b).

(e)  The KKR
Investor hereby represents that its owners are KKR Millennium Fund and KKR
Partners III.  This Article 3 shall
apply to all owners of the KKR Investor with respect to any Transfer of
interests in the KKR Investor as if such Transfer was a direct Transfer of the
KKR Investor’s shares of Common Stock. 
The KKR Investor shall be prohibited from permitting any such Transfer
of interests in the KKR Investor except in accordance with this Section
3.2(e).  Upon any such Transfer of
interests in the KKR Investor in breach of this Section 3.2(e), the KKR
Investor shall forfeit (and the Company shall cancel on its books) the
percentage of the KKR Investor’s shares of Common Stock equal to the percentage
interest in the KKR Investor so Transferred in breach of this Section 3.2(e).

(f)  Notwithstanding
anything to the contrary in this Agreement, the KKR Investor (including its
Permitted Transferees) shall not transfer the share of Class C Common Stock
except (i) to a Permitted Transferee or (ii) in connection with a sale of all
of the KKR Investor’s (including its Permitted Transferees) shares of Common
Stock.

SECTION 3.3. Right of First Offer.  Following the fourth anniversary of the Closing
Date, so long as the Company has not completed an IPO, no Institutional
Stockholder shall Transfer any of its shares of Common Stock other than to a
Permitted Transferee except as set forth below:

(a)  Prior to any
Transfer of shares of Common Stock by an Institutional Stockholder or any of
its Affiliates (the “Offering Holder”), the Offering Holder shall
deliver to the Company and each other Stockholder that is not an Affiliate of
the Offering Holder (collectively, excluding the Company, the “ROFO Recipients”)
written notice (the “Offer Notice”), stating such Offer Holder’s
intention to effect such a Transfer, the number of shares of Common Stock
subject to such Transfer (the “Offered Securities”), the price the
Offering Holder proposes to be paid for the Offered Securities (the “First
Offer Price”), and the other material terms and conditions of the proposed
Transfer.  The Offer Notice may require
that the consummation of any sale of the Offered Securities to the Company or
the ROFO Recipients occur no later than 60 days after the date of the Offer
Notice.

(b)  Upon receipt
of the Offer Notice, the Company will have an irrevocable non-transferable
option to purchase all or a portion of the Offered Securities at the First
Offer Price and otherwise on the terms and conditions described in the Offer
Notice (the “First Offer”).  The
Company shall, within 30 days from receipt of the Offer Notice, indicate
whether or not it has accepted the First Offer by sending irrevocable written
notice of any such acceptance to the Offering Holder and the ROFO Recipients
indicating the number of Offered Shares to be purchased (the “Acceptance Notice”),
and the Company shall then be obligated to purchase such number of Offered
Securities on the terms and conditions set forth in the Offer Notice.  In the event the Company elects not to
purchase any or all of the Offered Securities, the ROFO Recipients shall have
the option to purchase at the First Offer Price all, but not less than all, of
the Offered Securities

 

18

 

with respect to which the Company has not exercised
its option, and each of the ROFO Recipients shall, within 45 days from delivery
of the Offer Notice, indicate to the Offering Holder and the Company if it has
accepted the First Offer and, if so, the number of Offered Securities to be
purchased and such ROFO Recipient shall then be obligated to purchase such
number of Offered Securities on the terms and conditions set forth in the Offer
Notice.

(c)  Notwithstanding
any other provision of this Section 3.3, the ROFO Recipients shall be permitted
to purchase less than all of the Offered Securities with the consent of the
Offering Holder.  The number of shares
that each ROFO Recipient shall be entitled to purchase upon the exercise of the
right of first offer shall be equal to such ROFO Recipient’s Pro Rata Portion
of the Offered Securities other than those as to which the Company has
exercised its option.  In the event any
ROFO Recipient elects to purchase less than all of its Pro Rata Portion (such
remaining securities, the “Section 3.3 Non-Electing Shares”), each such
other ROFO Recipient shall be entitled to purchase its Pro Rata Portion of the
Section 3.3 Non-Electing Shares.  After
receipt of notice from each such ROFO Recipient electing to exercise its right
of first offer, the Company shall determine the number of Offered Securities
which each such ROFO Recipient shall be entitled to purchase pursuant to this
Section 3.3(c) and each such ROFO Recipient shall be required to purchase the
number of Offered Securities as so determined.

(d)  If neither
the Company nor the ROFO Recipients (in the aggregate) elect to purchase all of
the Offered Securities pursuant to this Section 3.3, then the applicable
Offering Holder shall  be free  for a period of four months from the date
acceptance notices from the ROFO Recipients were due to be received by the
applicable Offering Holder, to enter into definitive agreements to Transfer the
Offered Securities as to which such options are not exercised to a Transferee
for consideration having a value not less than 90% of the First Offer Price and
on otherwise comparable terms; provided that any such definitive
agreement provides for the consummation of such Transfer to take place within four
months from the date of such definitive agreement and is otherwise on other
terms not more favorable to the transferee in any material respect than were
contained in the Offer Notice.

(e)  If neither
the Company nor the ROFO Recipients (in the aggregate) exercise their
respective options to purchase all of the Offered Securities at the First Offer
Price and the applicable Offering Holder has not entered into a definitive
agreement described in Section 3.3(d) within four months from the date
acceptance notices from the ROFO Recipients were due to be received by the
applicable Offering Holder, or the Offering Holder has entered into such an
agreement but has not consummated the sale of such securities within four
months from the date of such definitive agreement, then the provisions of this
Section 3.3 shall again apply, and such Offering Holder shall not Transfer or
offer to Transfer such shares of Common Stock not so Transferred without again
complying with this Section 3.3.

(f)  Upon exercise
by the Company and/or the ROFO Recipients, as the case may be, of their
respective rights of first offer under this Section 3.3, the Company and/or the
ROFO Recipients, as the case may be, and the applicable Offering Holder shall
be legally obligated to consummate the purchase contemplated thereby and shall
use their commercially reasonable efforts to (i) secure any governmental
authorization required, (ii) comply as soon as reasonably practicable with all
applicable laws and (iii) take all such other actions and to execute such
additional documents as are reasonably necessary or appropriate in connection
therewith and to consummate the purchase of the Offered Securities as promptly
as practicable.

 

19

 

(g)  Each of the Stockholders
shall have the right to assign its rights under this Section 3.3 to any Person
such Stockholder may select, other than a Company Competitor.

(h)  The Company
agrees to use commercially reasonable efforts to cooperate with, and provide
reasonable assistance to, the ROFO Recipient (or its assignee) or any
prospective third party purchaser in connection with obtaining any governmental
or regulatory approval required in connection with the purchase and sale of the
Offered Securities; provided, that the Company shall not be obligated to
take any action that would reasonably be expected to cause or impose any
adverse effect on the business or operations of the Company.

SECTION 3.4. Right of Co-Sale on Transfers by Stockholders.  Following the fourth anniversary of the
Closing Date, so long as the Company has not completed an IPO, no Institutional
Stockholder shall Transfer any of its shares of Common Stock other than to a
Permitted Transferee except as set forth below:

(a)  In
the event of a proposed Transfer by an Institutional Stockholder or its
Transferees, (collectively, “Transferring Stockholder”) of shares of
Common Stock representing more than 10% of such Institutional Stockholder’s
Original Shares, each Stockholder (other than the Transferring Stockholder)
shall have the right to participate in the Transfer in the manner set forth in
this Section 3.4.  Prior to any such
Transfer, the Transferring Stockholder shall deliver to the Company prompt
written notice (the “Transfer Notice”), which the Company will forward
to the Stockholders (other than the Transferring Stockholder, the “Co-Sale
Participants”) within five (5) days of receipt, which notice shall state
(i) the name of the proposed Transferee, (ii) the number of shares of Common
Stock proposed to be Transferred (the “Transferred Securities”), (iii)
the proposed purchase price therefor, including a description of any non-cash
consideration sufficiently detailed to permit the determination of the Fair
Market Value thereof, and (iv) the other material terms and conditions of the
proposed Transfer, including the proposed Transfer date (which date may not be
less than thirty-five (35) days after delivery of the Transfer Notice).  Such notice shall be accompanied by a
written offer from the proposed Transferee to purchase the Transferred
Securities.  Each Co-Sale Participant
may Transfer to the proposed Transferee identified in the Transfer Notice their
Pro Rata Portion of such Co-Sale Participant’s shares of Common Stock by giving
written notice to the Company (who shall forward such notice to the other
Co-Sale Participants within five (5) days) and to the Transferring Stockholder
within twenty (20) days of the delivery of the Transfer Notice, which notice
shall state that such Co-Sale Participant elects to exercise its rights of
co-sale under this Section 3.4 and shall state the maximum number of shares
sought to be Transferred.  In the event
any such Co-Sale Participant elects to exercise its co-sale rights with respect
to less than all of its Pro Rata Portion (such remaining securities, the “Section
3.4 Non-Electing Shares”), each such other Co-Sale Participant shall be
entitled to sell an additional number of shares equal to its Pro Rata Portion
of the Section 3.4 Non-Electing Shares. 
Each Co-Sale Participant shall be deemed to have waived its right of
co-sale hereunder if it either fails to give notice within the prescribed time
period or if such Co-Sale Participant purchased shares of Common Stock in
exercising its right of first offer pursuant to Section 3.3.  The proposed Transferee of Transferred
Securities will not be obligated to purchase a number of shares of Common Stock
exceeding that set forth in the Transfer Notice and in the event such
Transferee elects to purchase less than all of the additional shares of Common
Stock sought to be Transferred by the Co-Sale Participants, the number of
shares of Common Stock to be Transferred by the Transferring Stockholder and
each such Co-Sale

 

20

 

Participant shall
be reduced on a pro rata basis.  The
consideration to be paid in respect of the share of Class C Common Stock shall
be the same as the consideration to be paid in respect of each share of Class A
Common Stock.

(b)  Each Co-Sale
Participant, in exercising its right of co-sale hereunder, may participate in
the Transfer by delivering to the Transferring Stockholder at the closing of
the Transfer of the Transferring Stockholder’s Transferred Securities to the
Transferee certificates representing the Transferred Securities to be
Transferred by such holder, duly endorsed for transfer or accompanied by stock
powers duly executed, in either case executed in blank or in favor of the
applicable purchaser against payment of the aggregate purchase price therefor
by wire transfer of immediately available funds.

(c)  In connection
with the sale, each Co-Sale Participant will agree to make or agree to the same
customary representations, covenants, indemnities and agreements as the
Transferring Stockholder so long as they are made severally and not jointly and
the liabilities thereunder are borne on a pro rata basis based on the
consideration to be received by each Stockholder; provided, however,
that any general indemnity given by the Transferring Stockholder, applicable to
liabilities not specific to the Transferring Stockholder, to the purchaser in
connection with such sale shall be apportioned to each Co-Sale Participant
according to the consideration received by each Co-Sale Participant and shall
not exceed such Co-Sale Participant’s proceeds from the sale.  The Transferring Stockholder shall use
commercially reasonable efforts to avoid having a non-competition covenant in
the sale documentation applicable to the Co-Sale Participants.

(d)  The following
Transfers of shares of Common Stock by any Stockholder or its Affiliates shall
not be subject to the co-sale rights provided by this Section 3.4:  (A) Transfers to Permitted Transferees of
such Stockholder (or Permitted Transferees of such Permitted Transferees) or
(B) Transfers following the consummation of an IPO.

SECTION 3.5.
Institutional Stockholders’ Drag Along Right.  (a)  If an Institutional Stockholder owns shares of
Common Stock in an amount that is equal to or exceeds 65% of the then issued
and outstanding Common Stock (such Institutional Stockholder the “Lead
Institutional Stockholder”) (after taking into account any options that
will be accelerated as a result of the transaction), and the Lead Institutional
Stockholder proposes to transfer at least 50.1% of the issued and outstanding
Common Stock of the Company (after taking into account any options that will be
accelerated as a result of the transaction) in a bona fide arm’s length
transaction to a person not Affiliated with the Lead Institutional Stockholder,
then if requested by the Lead Institutional Stockholder such other
Institutional Stockholder (together with its Affiliates) (the “Dragged
Stockholder”) shall be required to sell the same percentage of its shares
of Common Stock as the Lead Institutional Stockholder is selling in the
transaction (such transaction, a “Drag Transaction”).

(b)  The
consideration to be received by the Dragged Stockholder shall be the same form
and amount of consideration per Share to be received by the Lead Institutional
Stockholder, and after the consummation
of an IPO shall consist only of cash and/or freely-tradable securities
listed on a national securities exchange or on the Nasdaq National Market, and
the terms and conditions of such sale shall be the same as those upon which the
Lead Institutional Stockholder sells its shares of Common Stock; provided
that if such consideration prior to consummation of an IPO is not cash

 

21

 

and/or freely tradable securities the Dragged
Stockholder shall receive (i) as long as the Dragged Stockholders hold equity
securities of the purchaser comparable rights to those in Sections 2.4 (other
than Section 2.4(a)(ii)) and 2.5, (ii) if the Dragged Stockholder has over 5%
of the stock of the purchaser, the Dragged Stockholder shall receive the right
to designate one member of the board (or other governing body) of the
purchaser, (iii) the comparable incidental registration rights as the Dragged
Stockholder receives under the Registration Rights Agreement and (iv) co-sale
rights with respect to any sale by the Lead Institutional Stockholder (other
than a public distribution or a transfer to Affiliates).  In connection with the sale, the Dragged
Stockholder will agree to make or agree to the same customary representations,
covenants, indemnities and agreements as the Lead Institutional Stockholder so
long as they are made severally and not jointly and the liabilities thereunder
are borne on a pro rata basis based on the consideration to be received by each
Stockholder; provided, however, that (i) any general indemnity
given by the Lead Institutional Stockholder, applicable to liabilities not
specific to the Lead Institutional Stockholder, to the purchaser in connection
with such sale shall be apportioned to the Dragged Stockholder according to the
consideration received by the Selling Stockholder and shall not exceed the
Dragged Stockholder’s proceeds from the sale and (ii) the Dragged Stockholder
shall not be required to agree to a noncompetition covenant.

(c)  The fees and
expenses, other than those payable to any Stockholder or any of their
respective Affiliates, incurred in connection with a sale under this Section
3.5 and for the benefit of all Dragged Stockholders (it being understood that costs
incurred by or on behalf of an Institutional Stockholder for his, her or its
sole benefit will not be considered to be for the benefit of all Stockholders),
to the extent not required hereunder to be paid or reimbursed by the Company or
the Transferee or acquiring Person, shall be shared by the Institutional
Stockholders on a pro rata basis, based on the consideration received by each
Stockholder; provided that no Stockholder shall be obligated to make any
out-of-pocket expenditure prior to the consummation of the transaction
consummated pursuant to this Section 3.5 (excluding modest expenditures for
postage, copies, etc.).

(d)  The Lead
Institutional Stockholder shall provide written notice (the “Drag Along
Notice”) to the Dragged Stockholder of any proposed Drag Transaction as
soon as practicable (but in no event later than five days) following its
exercise of the rights provided in Section 3.5(a).  The Drag Along Notice shall set forth the consideration to be paid
by the purchaser for the securities, the material terms of the Drag Transaction
and the expected closing date.

(e)  If any
holders of shares of Common Stock of any class are given an option as to the
form and amount of consideration to be received in a Drag Transaction, all
holders of shares of Common Stock of such class will be given the same option.

(f)  At least ten
(10) Business Days prior to the consummation of the sale, the Dragged
Stockholder shall deliver to the Company to hold in escrow pending transfer of
the consideration therefor, the duly endorsed certificate or certificates
representing the shares of Common Stock held by the Dragged Stockholder to be
sold, and a stock power and limited power-of-attorney authorizing the Company
to take all actions necessary to sell or otherwise dispose of such
securities.  In the event that the
Dragged Stockholder should fail to deliver the shares of Common Stock, the
Company shall cause the books and records of the Company to show that such
shares of Common Stock are bound by the provisions of this Section 3.5 and that
such securities may only be Transferred to the purchaser in such Drag
Transaction.

 

22

 

(g)  Upon the
consummation of the Drag Transaction, the acquiring Person shall remit directly
to the Dragged Stockholder, by wire transfer if available and if requested by
the Dragged Stockholder, the consideration for the securities sold pursuant
thereto.

(h)  The DLJMB
Funds hereby agree that they (i) will not exercise any drag along or comparable
right that they may have with respect to the Syndicate Stockholders or any
other stockholder of the Company under any other agreement without the prior
written consent of the KKR Investor, except in connection with a Drag
Transaction in which the DLJMB Funds are the Lead Institutional Investor, and
(ii) will exercise any such right with respect to the Syndicate Stockholders or
any other stockholder of the Company if requested by the KKR Investor in
connection with any Drag Transaction.

(i)  Notwithstanding
anything to the contrary in the foregoing, if the DLJMB Funds is the Lead
Institutional Stockholder it shall drag the shares of Class A Common Stock held
by the KKR Investor (and its Permitted Transferees) before it drags the share
of Class C Common Stock.  The
consideration to be paid in respect of the share of Class C Common Stock shall
be the same as the consideration to be paid in respect of each share of Class A
Common Stock.

SECTION 3.6. Void Transfers.  Any Transfer or attempted Transfer of shares
of Common Stock in violation of any provision of this Agreement shall be void.

ARTICLE IV

EQUITY PURCHASE RIGHTS

SECTION 4.1. Equity Purchase Rights.  (a)  Subject to Section 4.1(g),
the Company hereby grants to the KKR Investor and the DLJMB Funds the right to
purchase 60% and 40%, respectively, of any part of any New Securities that the
Company may, from time to time, propose to sell or issue until the KKR Investor
(and its Permitted Transferees) first owns not less than 50% of the Class A
Common Stock then outstanding assuming the Class C Stock is converted into
Class A Stock (such right, the “Initial Equity Purchase Right”).  The Initial Equity Purchase Right shall
cease if the KKR Investor declines the Company’s offer to purchase any shares
of Class A Common Stock pursuant to such right.  At such time as the KKR Investor (and its Permitted Transferees)
acquires such amount of shares of Class A Common Stock that upon
conversion of the Class C Common Stock would give the Investor 50% of the
issued and outstanding Class A Common Stock, the share of Class C Common Stock
shall be converted into one share of Class A Common Stock.

(b)  Subject to
the Initial Equity Purchase Right, the Company hereby grants to each
Stockholder the right to purchase its Pro Rata Portion of all or any part of
New Securities that the Company may, from time to time, propose to sell or
issue (such right the “Equity Purchase Right”).  The number or amount of New Securities which
the Stockholders may purchase pursuant to this Section 4.1(b) shall be referred
to as the “Equity Purchase Shares.” 
The Equity Purchase Right provided in this Section 4.1(b) shall apply at
the time of issuance of any right, warrant or option or convertible or
exchangeable security and not to the conversion, exchange or exercise thereof.

 

23

 

(c)  The Company
shall give written notice of a proposed issuance or sale described in Section
4.1(a) or (b) to the Stockholders within five (5) Business Days following any
meeting of the Board at which any such issuance or sale is approved and at
least fifteen (15) days prior to the proposed issuance or sale.  Such notice (the “Issuance Notice”)
shall set forth the material terms and conditions of such proposed transaction,
including the name of any proposed purchaser(s), the proposed manner of
disposition, the number or amount and description of the New Securities
proposed to be issued, the proposed issuance date and the proposed purchase
price per share of New Securities, including a description of any non-cash
consideration sufficiently detailed to permit the determination of the Fair
Market Value thereof.  Such notice shall
also be accompanied by any written offer from the prospective purchaser to
purchase such New Securities.

(d)  At any time
during the 15-day period following the receipt of an Issuance Notice, the
Stockholders shall have the right to elect irrevocably to purchase up to the
number of the Equity Purchase Shares at the purchase price set forth in the Issuance
Notice (provided that, in the event any portion of the purchase price
per share to be paid by the proposed purchaser is to be paid in non-cash
consideration, the value of any such non-cash consideration per share shall be
the Fair Market Value thereof) and upon the other terms and conditions
specified in the Issuance Notice by delivering a written notice to the
Company.  Except as provided in the
following sentence, such purchase shall be consummated concurrently with the
consummation of the issuance or sale described in the Issuance Notice.  The closing of any purchase by any
Stockholder may be extended beyond the closing of the transaction described in
the Issuance Notice to the extent necessary to obtain required governmental
approvals and other required approvals and the Company and the Stockholders
shall use their respective best efforts to obtain such approvals.

(e)  Each
Stockholder exercising its right to purchase its respective portion of the
Equity Purchase Shares in full (an “Exercising Stockholder”) shall have
a right of over-allotment such that if the other Stockholder fails to exercise
its right hereunder to purchase its full Pro Rata Portion of New Securities (a
“Non-Purchasing Stockholder”), such Exercising Stockholder may purchase
its Pro Rata Portion of such securities by giving written notice to the Company
within ten (10) days from the date that the Company provides written notice of
the amount of New Securities as to which such Non-Purchasing Stockholders have
failed to exercise their Equity Purchase Rights hereunder.

(f)  If any
Stockholder or Exercising Stockholder fails to exercise fully the Equity
Purchase Right within the periods described above and after expiration of the
10-day period for exercise of the over-allotment provisions pursuant to Section
4.1(e) above, the Company shall be free to complete the proposed issuance or
sale of the New Securities described in the Issuance Notice with respect to
which Exercising Stockholders failed to exercise the option set forth in this
Section 4.1 on terms no less favorable to the Company than those set forth in
the Issuance Notice (except that the amount of securities to be issued or sold
by the Company may be reduced); provided that (x) such issuance or sale
is closed within ninety (90) days after the expiration of the 10-day period
described in Section 4.1(e) and (y) the price at which the New Securities are
Transferred must be equal to or higher than the purchase price described in the
Issuance Notice.  Such periods within
which such issuance or sale must be closed shall be extended to the extent
necessary to obtain required governmental approvals and other required
approvals and the Company shall use its commercially reasonable efforts to
obtain such approvals.  In the event
that the Company has not sold such New Securities within said 90-day (as may be
extended in accordance with the preceding sentence)

 

24

 

period, the Company shall not thereafter issue or
sell any New Securities, without first again offering such securities to the
Stockholders in the manner provided in this Section 4.1.

(g)  The Parties
to this Agreement acknowledge that Syndicate Stockholders, the Management
Stockholders and Marc Reisch have the right to purchase their Pro Rata Portion
of Equity Purchase Shares under Sections 4.1(a) and (b).  The exercise of such Equity Purchase Rights
(by Mr. Reisch or any other holder of shares of Common Stock (other than the
KKR Investor or the DLJMB Funds) with respect to shares of Common Stock
acquired at or subsequent to the Closing) shall reduce the Equity Purchase
Shares of the KKR Investor and the DLJMB Funds pro rata and the exercise of
Equity Purchase Rights by Syndicate Stockholders and Management Stockholders
with respect to shares of Common Stock held by them immediately prior to the
Closing shall reduce only the Equity Purchase Shares available for purchase by
the DLJMB Funds; provided that the Equity Purchase Rights of any
Syndicate Stockholder that is a Non-Purchasing Stockholder shall be made
available first to the DLJMB Funds and second to the KKR Investor.

(h)  Each of the
Stockholders shall have the right to assign its rights under this Section 4.1
to any Person such Stockholder may select, other than a Company Competitor.

ARTICLE V

MISCELLANEOUS

SECTION 5.1.
Stockholder Indemnification; Reimbursement of Expenses.

(a)  The Company
agrees to indemnify and hold harmless each Stockholder, their respective
directors, members, managers and officers and their Affiliates (the
Stockholders, and the respective directors, officers, partners, members,
managers, Affiliates and controlling persons thereof, each, a “Stockholder
Indemnitee”) from and against any and all liability, including all
obligations, costs, fines, claims, actions, injuries, demands, suits,
judgments, proceedings, investigations, arbitrations (including stockholder
claims, actions, injuries, demands, suits, judgments, proceedings,
investigations or arbitrations) and reasonable expenses, including reasonable
accountant’s and reasonable attorney’s fees and expenses (together the “Losses”),
incurred by such Stockholder Indemnitee before or after the date of this
Agreement and arising out of, resulting from, or relating to any litigation to
which any Stockholder Indemnitee is made a party in its capacity as a
stockholder or owner of securities (or a partner, director, officer, member,
manager, Affiliate or controlling person of any Stockholder Indemnitee) of the
Company or in connection with such Stockholder’s purchase of shares of Common
Stock or its status as a Stockholder; provided that the foregoing
indemnification rights in this Section 5.1 shall not be available to the extent
that (a) any such Losses are incurred as a result of such Stockholder
Indemnitee’s willful misconduct or gross negligence; (b) any such Losses are
incurred as a result of non-compliance by such Stockholder Indemnitee with any
laws or regulations applicable to any of them; (c) any such Losses are incurred
as a result of non-compliance by such Stockholder Indemnitee with its
obligations under any of the agreements or instruments referenced above or any
other agreements or instruments to which such Stockholder Indemnitee is or
becomes a party or otherwise becomes bound; or (d) subject to the rights of
contribution provided for below, to the extent indemnification for any Losses
would violate any applicable law, regulation or public policy.

 

25

 

For purposes of this Section 5.1, none of the
circumstances described in the limitations contained in the proviso in the
immediately preceding sentence shall be deemed to apply absent a final
non-appealable judgment of a court of competent jurisdiction to such effect, in
which case to the extent any such limitation is so determined to apply to any
Stockholder Indemnitee as to any previously advanced indemnity payments made by
the Company under this Section 5.1, then such payments shall be promptly repaid
by such Stockholder Indemnitee to the Company. 
The rights of any Stockholder Indemnitee to indemnification hereunder
will be in addition to any other rights any such party may have under any other
agreement or instrument referenced above or any other agreement or instrument
to which such Stockholder Indemnitee is or becomes a party or is or otherwise
becomes a beneficiary or under law or regulation.  In the event of any payment of indemnification pursuant to this
Section 5.1, so long as any Stockholder Indemnitee is fully indemnified for all
Losses, the Company will be subrogated to the extent of such payment to all of
the related rights of recovery of the Stockholder Indemnitee to which such
payment is made against all other Persons. 
Such Stockholder Indemnitee shall execute all papers reasonably required
to evidence such rights.  The Company
will be entitled at its election to participate in the defense of any third
party claim upon which indemnification is due pursuant to this Section 5.1 or
to assume the defense thereof, with counsel reasonably satisfactory to such
Stockholder Indemnitee unless, in the reasonable judgment of the Stockholder
Indemnitee, a conflict of interest between the Company and such Stockholder
Indemnitee may exist, in which case such Stockholder Indemnitee shall have the
right to assume its own defense and the Company shall be liable for all
reasonable expenses therefor (including the fees and expenses of one
alternative counsel per jurisdiction). 
Except as set forth above, should the Company assume such defense all
further defense costs of the Stockholder Indemnitee in respect of such third
party claim shall be for the sole account of such party and not subject to
indemnification hereunder.  The Company
will not without the prior written consent of the Stockholder Indemnitee effect
any settlement of any threatened or pending third party claim in which such
Stockholder Indemnitee is or had a threatened claim been brought could have
been a party and be entitled to indemnification hereunder unless such
settlement solely involves the payment of money and includes an unconditional
release of such Stockholder Indemnitee from all liability and claims that are
the subject matter of such claim.  If
the indemnification provided for above is unavailable in respect of any Losses,
then the Company, in lieu of indemnifying an Stockholder Indemnitee, shall
contribute to the amount paid or payable by such Stockholder Indemnitee in such
proportion as is appropriate to reflect the relative fault of the Company and
such Stockholder Indemnitee in connection with the actions which resulted in
such Losses, as well as any other equitable considerations.

(b)  The Company
agrees to pay or reimburse each Stockholder (i) for all reasonable costs and
expenses (including reasonable attorneys fees, charges, disbursement and
expenses) incurred in connection with any amendment, supplement, modification
or waiver of or to any of the terms or provisions of this Agreement and (ii)
for all costs and expenses of such Stockholder (including reasonable attorneys
fees, charges, disbursement and expenses) incurred in connection with
(1) the consent to any departure by the Company or any of its Subsidiaries
from the terms of any provision of this Agreement and (2) the enforcement
by such Stockholder of any right granted to it or provided for hereunder.

SECTION 5.2. Termination. Subject to the
early termination of any provision as a result of an amendment to this
Agreement agreed to by the Board and the Stockholders as provided under Section
5.3, (i) the provisions of Article II shall, with respect to each

 

26

 

Stockholder, terminate as provided in Section 2.6,
(ii) the provisions of Sections 3.3 and 3.4 and Article IV shall terminate
upon the consummation of an IPO, (iii) the provisions of Sections 2.4,
2.5, 3.2 and 5.6 shall terminate as provided therein, and (iv) Sections
3.1, 3.5, 3.6 and Article V (other than Section 5.6) of this Agreement shall
not terminate.  Nothing herein shall
relieve any party from any liability for the breach of any of the agreements
set forth in this Agreement.

SECTION 5.3. Amendments and Waivers. Except
as otherwise provided herein, no modification, amendment or waiver of any
provision of this Agreement shall be effective without the approval of the
Board and the Stockholders; provided that any Stockholder may waive (in
writing) the benefit of any provision of this Agreement with respect to itself
for any purpose.  The failure of any
party to enforce any of the provisions of this Agreement shall in no way be
construed as a waiver of such provisions and shall not affect the right of such
party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.  Any written
amendment or waiver to this Agreement that receives the vote or consent of the
Stockholders provided herein need not be signed by all Stockholders but shall
be effective in accordance with its terms and shall be binding upon all
Stockholders.

SECTION 5.4. Successors, Assigns and Transferees.  This Agreement shall bind and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns. 
Stockholders may assign their respective rights and obligations
hereunder to any Transferees only to the extent expressly provided herein.

SECTION 5.5. Legend.  (a)  All certificates representing
the shares of Common Stock held by each Stockholder shall bear a legend
substantially in the following form:

“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO A STOCKHOLDERS AGREEMENT DATED OCTOBER 4,
2004 (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY).  NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH
STOCKHOLDERS AGREEMENT AND (A) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) PURSUANT TO AN EXEMPTION
FROM REGISTRATION THEREUNDER.  THE
HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE
BOUND BY ALL OF THE PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT.

(b)  Upon the sale
of any shares of Common Stock pursuant to (i) an effective registration
statement under the Securities Act or pursuant to Rule 144 under the Securities
Act or (ii) another exemption from registration under the Securities Act
or upon the termination of this Agreement, the certificates representing such
shares of Common Stock shall be replaced, at the expense of the Company, with
certificates or instruments not bearing the legends required by this Section
5.5; provided that the Company may condition such replacement of
certificates under clause (ii) upon the receipt of an opinion of securities
counsel reasonably satisfactory to the Company.

SECTION 5.6. Non-Competition.  (a)  For so long as an Institutional Stockholder
owns at least 10% of the shares of Common Stock then outstanding, such Institutional
Stockholder

 

27

 

and
each Non-Compete Affiliate of such Institutional Stockholder shall be
prohibited, directly or indirectly, from owning, managing, operating,
controlling or participating in the ownership, management, operation or control
of any Company Competitor, except for (i) the acquisition of less than 5% of the
outstanding capital stock of a Company Competitor, (ii) the acquisition of a
Company Competitor described in clauses (A) and (B) in the definition thereof
that generates annual revenues of less than $25 million for the most recently
completed four fiscal quarters prior to the date of measurement or (iii) the
acquisition of a Company Competitor described in clauses (C), (D) and (E) in
the definition thereof that generates annual revenues of less than $10 million
for the most recently completed four fiscal quarters prior to the date of
measurement.

(b)  Each
Institutional Stockholder agrees that for so long as an Institutional
Stockholder owns at least 10% of the shares of Common Stock then outstanding, a
Controlled Portfolio Company shall not, directly or indirectly own, manage,
operate or participate in the ownership, management, operation or control of
any Company Competitor, except for (i) the acquisition of less than 5% of the
outstanding capital stock of a Company Competitor, (ii) a Company Competitor described in
clauses (A) and (B) in the definition thereof that generates annual revenues of
less than $25 million in such business for any twelve month period or (iii) a
Company Competitor described in clauses (C), (D) and (E) in the definition
thereof that generates revenues of less than $10 million in such business for
any twelve month period; provided that action taken by a Controlled
Portfolio Company shall not be deemed to violate this Section 5.6(b) if (X) it
is approved by the directors thereto and (Y) such Institutional Stockholder or
its Non-Compete Affiliate did not have the right to veto such action in its
capacity as an equity holder.  Any
director designated by such Institutional Stockholder or Non-Compete Affiliate
shall not be required to vote against any action that would result in a
violation of this Section 5.6(b) if he or she concludes after consulting with
counsel that such action would conflict with his or her duties to such
Controlled Portfolio Company.

(c)  Notwithstanding
Section 2.1(a), upon either a Material Competition Event or a violation of
Section 5.6(a) or (b), the responsible Institutional Stockholder shall cease to
have the right to designate any Directors; provided that upon either the
disposition of the Person that caused a Material Competition Event or a
violation of Section 5.6(a) or (b) or a Material Competition Event ceasing to
occur, such right to designate shall be reinstated.

(d)  (i)  At such time as an Institutional
Stockholder, Non-Compete Affiliate of such Institutional Stockholder or a
portfolio company of such Institutional Stockholder owns, manages, operates or
participates in the ownership, management, operation or control of any Company
Competitor (other than (i) the acquisition of less than 5% of the outstanding
capital stock of a Company Competitor or (ii) a Company Competitor (Y)
described in clauses (A) and (B) in the definition of Company Competitor that
generate annual revenues of less than $25 million in such businesses for the most recently
completed four fiscal quarters prior to the date of measurement and (Z)
described in clauses (C), (D) and (E) in the definition of Company Competitor
that generate annual revenues of less than $10 million in such businesses for the most recently
completed four fiscal quarters prior to the date of measurement), such
Institutional Stockholder shall cease to have any consent rights pursuant to
Section 2.3(a) with respect to any Business Lines in which such Company
Competitor is engaged; provided that upon the disposition of a Company
Competitor or a Material Competition Event ceasing to occur, such consent
rights shall be reinstated by the foregoing persons.

 

28

 

(ii)           Upon either a Material Competition
Event or a violation of Section 5.6(a) or (b), the responsible Institutional
Stockholder shall cease to have any consent rights pursuant to Section 2.3(a); provided
that upon disposition of any Person that caused a Material Competition Event or
a violation of Section 5.6(a) or (b), such consent rights shall be reinstated.

(e)  Definitions:

“Company Competitor”
means any Person that is primarily engaged
in (A) school photography services or school-related clothing, affinity
products and services, (B) commercial printing and binding, (C) printing
services to companies engaged in direct marketing, (D) fragrance,
cosmetics and toiletries-related sampling or (E) single use packaging for
fragrances, cosmetics and toiletries, in North America in the case of clauses
(A) through (C) and in North America and Europe in the case of clauses (D) and
(E).  A “Company Competitor” shall not
include a Non-Controlled Portfolio Company if a Non-Compete Affiliate has no
rights to designate a member of the board (or a comparable governing body) with
respect to such Person.  Merrill
Corporation shall not be deemed to be a “Company Competitor” with respect to
its financial printing and financial document services, strategic communication
services and document management services and any acquisitions or growth in the
foregoing lines of business.

“Controlled Portfolio
Company” means, with respect to either Institutional Stockholder, a Person
in which such Institutional Stockholder or a Non-Compete Affiliate owns more
than 50% of the voting securities or has consent or veto rights (through
equity, debt or a vote on the governing body) with respect to acquisitions or
entering into new lines of business.  In
the case of the DLJMB Funds, Merrill Corporation shall be deemed to be a
“Controlled Portfolio Company” if but only if the DLJMB Funds or any Affiliate
of the DLJMB Funds has veto rights over acquisitions or new lines of business.

“Material Competition
Event” means, with respect to either Institutional Stockholder, when such
Institutional Stockholder, Non-Compete Affiliates and portfolio companies which
they own, manage, operate, control or participate in the ownership, management,
operation or control of, other than Persons in whom they own less than 5% of
the equity securities of, are collectively, (i) engaged in a Business Lines
that represents at least 25% of the aggregate revenues of the Company and its
Subsidiaries for the four fiscal quarters ended on September 30, 2004 and (ii)
generate revenues in such Business Lines for the four fiscal quarters prior to
the date of measurement that are at least 15% of the revenues generated for the
four fiscal quarters ended on September 30, 2004 by the Company and its
Subsidiaries in such Business Lines; provided that revenues of
Non-Controlled Portfolio Companies in whom none of the Institutional
Stockholder, the Non-Compete Affiliates and portfolio companies has the right
to designate a director (or member of a governing body) shall be excluded from
the calculation in clauses (i) and (ii).

“Non-Compete Affiliate”
means, with respect to the KKR Investor, the KKR Millennium Fund, its analogous
non-U.S. fund and any buyout funds successors thereto and with respect to the
DLJMB Funds, DLJ Merchant Banking Partners III, L.P., its analogous non-U.S.
fund and any buyout funds successors thereto.

 

29

 

“Non-Controlled Portfolio
Company” means with respect to either Institutional Stockholder, a person
in whom such Institutional Stockholder or Non-Compete Affiliate has an
investment other than a Controlled Portfolio Company.

SECTION 5.7. Notices.  All notices and other communications
required or permitted hereunder shall be in writing and shall be deemed
effectively given: (a) upon personal delivery to the party to be notified, (b)
when sent by confirmed facsimile if sent during normal business hours of the
recipient, if not, then on the next Business Day, provided that a copy
of such notice is also sent via nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt, (c) five
(5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid or (d) one (1) Business Day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt.  All
communications shall be sent to such party’s address as set forth below or at
such other address or to such other person as the party shall have furnished to
each other party in writing in accordance with this provision:

	
   

  	
  If to the Company

  	
  Jostens Holding Corp.

  
	
   

  	
   

  	
  c/o Jostens, Inc.

  
	
   

  	
   

  	
  5501 Norman Center
  Drive

  
	
   

  	
   

  	
  Minneapolis, MN  55437

  
	
   

  	
   

  	
  Attention:  General Counsel

  
	
   

  	
   

  	
  Telecopy:  (952) 830-8492

  
	
   

  	
   

  	
   

  
	
   

  	
  If to the KKR Investor:

  	
  c/o Kohlberg Kravis & Roberts & Co.

  
	
   

  	
   

  	
  9 West 57th Street

  
	
   

  	
   

  	
  New York, New York 
  10019

  
	
   

  	
   

  	
  Attention: Alexander Navab

  
	
   

  	
   

  	
  Telecopy: (212) 750-0003

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  Simpson Thacher & Bartlett LLP

  
	
   

  	
  (which shall not

  	
  425 Lexington Avenue

  
	
   

  	
  constitute notice)

  	
  New York, New York 
  10017

  
	
   

  	
   

  	
  Attention: Gary I. Horowitz, Esq.

  
	
   

  	
   

  	
  Telecopy: (212) 455-2502

  
	
   

  	
   

  	
   

  
	
   

  	
  If to the DLJMB Funds:

  	
  c/o DLJ Merchant Banking III, Inc.

  
	
   

  	
   

  	
  Eleven Madison Avenue

  
	
   

  	
   

  	
  New York, NY 10010

  
	
   

  	
   

  	
  Attention: 
  Thompson Dean

  
	
   

  	
   

  	
  Facsimile: 
  (212) 538-0415

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  Weil, Gotshal & Manges
  LLP

  
	
   

  	
  (which shall not

  	
  767 Fifth Avenue

  
	
   

  	
  constitute notice)

  	
  New York, New York 10153

  
	
   

  	
   

  	
  Attention:  Douglas P. Warner, Esq.

  
	
   

  	
   

  	
  Facsimile:  (212) 310-8007

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

30

 

SECTION 5.8. Further Assurances.  At any time or from time to time after the
date hereof, the parties agree to cooperate with each other, and at the request
of any other party, to execute and deliver any further instruments or documents
and to take all such further action as the other party may reasonably request
in order to evidence or effectuate the consummation of the transactions
contemplated hereby and to otherwise carry out the intent of the parties
hereunder.

SECTION 5.9. Entire Agreement.  Except as otherwise expressly set forth
herein, this Agreement together with the Registration Rights Agreement embodies
the complete agreement and understanding among the parties hereto with respect
to the subject matter hereof and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, that may have related to the subject matter hereof in any way.

SECTION 5.10. Restrictions on Other Agreements;
Bylaws.  (a)  Following
the date hereof, no Stockholder or any of its, her or his Permitted Transferees
shall enter into or agree to be bound by any stockholder agreements or
arrangements of any kind with any Person with respect to any shares of Common
Stock except pursuant to the agreements specifically contemplated by the Contribution
Agreement, the Registration Rights Agreement, and the Other Stockholder
Agreements.

(b)  The
provisions of this Agreement shall be controlling if any such provisions or the
operation thereof conflict with the provisions of the By-laws or Charter.  Each of the parties covenants and agrees to
vote their shares of the Common Stock and to take any other action reasonably
requested by the Company or any Stockholder to amend the Company’s By-Laws
or Charter so as to avoid any conflict with the provisions hereof.

SECTION 5.11. Delays or Omissions.  It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, shall impair
any such right, power or remedy, nor shall it be construed to be a waiver of
any such breach, default or noncompliance, or any acquiescence therein, or of
or in any similar breach, default or noncompliance thereafter occurring.  It is further agreed that any waiver, permit,
consent or approval of any kind or character on the part of any party hereto of
any breach, default or noncompliance under this Agreement or any waiver on such
party’s part of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in
such writing.  All remedies, either
under this Agreement, by law, or otherwise afforded to any party, shall be
cumulative and not alternative.

SECTION 5.12.  Governing Law; Jurisdiction; Waiver
of Jury Trial.  This Agreement shall
be governed in all respects by the laws of the State of Delaware.  No suit, action or proceeding with respect
to this Agreement may be brought in any court or before any similar authority
other than in a court of competent jurisdiction in the State of New York, and
the parties hereto hereby submit to the exclusive jurisdiction of such courts
for the purpose of such suit, proceeding or judgment.  Each party hereto hereby irrevocably waives any right it may have
had to bring such an action in any other court, domestic or foreign, or before
any similar domestic or foreign authority. 
Each of the parties hereto hereby irrevocably and unconditionally waives
trial

 

31

 

 

by jury in any legal action or proceeding in relation
to this Agreement and for any counterclaim therein.

SECTION 5.13.  Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision or any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.

SECTION 5.14.  Enforcement.  Each party hereto acknowledges that money
damages would not be an adequate remedy in the event that any of the covenants
or agreements in this Agreement are not performed in accordance with its terms,
and it is therefore agreed that in addition to and without limiting any other
remedy or right it may have, the non-breaching party will have the right to an
injunction, temporary restraining order or other equitable relief in any court
of competent jurisdiction enjoining any such breach and enforcing specifically
the terms and provisions hereof.

SECTION 5.15.  Titles and Subtitles.  The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

SECTION 5.16.  No Recourse.  Notwithstanding anything that may be
expressed or implied in this Agreement, the Company and each Stockholder
covenant, agree and acknowledge that no recourse under this Agreement or any
documents or instruments delivered in connection with this Agreement shall be
had against any current or future director, officer, employee, general or
limited partner or member of any Stockholder or of any Affiliate or assignee
thereof, whether by the enforcement of any assessment or by any legal or
equitable proceeding, or by virtue of any statute, regulation or other
applicable law, it being expressly agreed and acknowledged that no personal
liability whatsoever shall attach to, be imposed on or otherwise be incurred by
any current or future officer, agent or employee of any Stockholder or any
current or future member of any Stockholder or any current or future director,
officer, employee, partner or member of any Stockholder or of any Affiliate or
assignee thereof, as such for any obligation of any Stockholder under this
Agreement or any documents or instruments delivered in connection with this
Agreement for any claim based on, in respect of or by reason of such
obligations or their creation.

SECTION 5.17.  Counterparts; Facsimile Signatures.  This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.  This
Agreement may be executed by facsimile signature.

SECTION 5.18.  Fees.  (a)  In connection with services related to the
Contribution Agreement and the transactions contemplated thereby, the Company
will pay, on the date hereof, (i) to the KKR Investor a transaction fee in the
amount of $18,000,000 and (ii) to DLJ Merchant Banking III, Inc. (“DLJMB”)
a transaction fee in the amount of $7,000,000,

 

32

 

reduced pro rata to the extent that such transaction
fees would cause total Transaction Expenses (as defined in the Contribution
Agreement) to exceed $75,000,000.

(b)  During the
term of this Agreement, the Company will pay to the KKR Investor and DLJMB in
the aggregate an annual fee of $3,000,000 (the “Management Fee”) in
exchange for ongoing management and advisory services provided by the KKR
Investor and DLJMB to the Company and its subsidiaries, such fee being payable
(i) quarterly in advance, commencing on the Closing Date (such first payment to
be made pro rata based on the number of days in the quarter remaining), and
(ii) to each of the KKR Investor and DLJMB in proportion to the economic
interests represented by the shares of Class A Common Stock and Class C Common
Stock of the Company owned by the KKR Investor, on the one hand, and the DLJMB
Funds, on the other hand, based on their ownership on the first day of such
quarter.  The management fee shall be
increased by 3% per annum.

SECTION 5.19.  Other Stockholder Agreements.  Each Stockholder hereby acknowledges the
obligations of the Company and certain Stockholders under the Other Stockholder
Agreements.  Each Stockholder hereby
agrees not to take any action that would interfere with the Company’s or any
other Stockholder’s ability to perform its obligations under the Other
Stockholder Agreements, except as expressly provided herein.

[Rest
of page intentionally left blank]

 

33

 

IN WITNESS WHEREOF, the
parties hereto have executed this Stockholders Agreement as of the date set
forth in the first paragraph hereof.

 

	
   

  	
  JOSTENS HOLDING CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  FUSION ACQUISITION LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  DLJ MERCHANT BANKING
  PARTNERS III, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  DLJ OFFSHORE PARTNERS
  III-1, C.V.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  DLJ OFFSHORE PARTNERS
  III-2, C.V.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  DLJ OFFSHORE PARTNERS III,
  C.V.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

 

 

 

	
   

  	
   

  	
   

  
	
   

  	
  DLJ MB PARTNERS III GmbH
  & Co. KG

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  MILLENNIUM PARTNERS II,
  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  MBP III PLAN INVESTORS,
  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
				

 

 

 

Schedule
I

Business
Lines

School photography services or
school-related clothing, affinity products and services

Commercial printing and binding

Printing services to companies
engaged in direct marketing

Fragrance, cosmetics and
toiletries-related sampling

Single use packaging for
fragrances, cosmetics and toiletries

 

 

Exhibit A

Assignment
and Assumption Agreement

Pursuant to the Stockholders
Agreement, dated as of October 4, 2004 (the “Stockholders Agreement”),
among Jostens Holding Corp., a Delaware corporation (the “Company”), and
each of the stockholders of the Company whose name appears on the signature
pages listed therein (each, a “Stockholder” and collectively, the “Stockholders”),
_________, (the “Transferor”) hereby assigns to the undersigned all of
the Transferor’s rights under the Stockholders Agreement that may be assigned
thereunder, and the undersigned hereby agrees that, having acquired shares of
Common Stock as permitted by the terms of the Stockholders Agreement, the
undersigned shall assume the obligations of the Transferor under the
Stockholders Agreement. Capitalized terms used but not defined herein shall
have the meanings assigned to them in the Stockholders Agreement.

Listed below is information
regarding the shares of Common Stock:

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name of Securities

  	
   

  	
  Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

IN WITNESS WHEREOF, the
undersigned has executed this Assumption Agreement as of __________ ___, 20__.

 

	
   

  	
  [NAME OF
  TRANSFEREE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

	
  Acknowledged by:

  
	
  JOSTENS HOLDING CORP.

  
	
   

  	
   

  	
   

  	 

	
  By:

  	
   

  	
   

  	 

	
   

  	
  Name:

  	
   

  	 

	
   

  	
  Title:Exhibit
10.30

 

AMENDED AND RESTATED 2004 STOCK
OPTION PLAN

FOR KEY EMPLOYEES OF

JOSTENS HOLDING CORP. AND ITS
SUBSIDIARIES

 

1.                                       Purpose
of Plan

 

The Amended and Restated 2004 Stock Option
Plan for Key Employees of Jostens Holding Corp. and Its Subsidiaries (the “Plan”)
is designed:

 

(a)                                  to
promote the long term financial interests and growth of Jostens Holding Corp.
(the “Company”) and its Subsidiaries by attracting and retaining management and
other personnel with the training, experience and ability to enable them to
make a substantial contribution to the success of the Company’s business;

 

(b)                                 to
motivate management personnel by means of growth-related incentives to achieve
long range goals; and

 

(c)                                  to
further the alignment of interests of participants with those of the
stockholders of the Company through opportunities for increased stock, or
stock-based ownership in the Company.

 

2.                                       Definitions

 

As used in the Plan, the following words
shall have the following meanings:

 

(a)                                  “Affiliate”
means with respect to any Person, any entity directly or indirectly
controlling, controlled by or under common control with such Person.

 

(b)                                 “Board”
means the Board of Directors of the Company.

 

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

 

(d)                                 “Committee”
means the Compensation Committee of the Board.

 

(e)                                  “Common
Stock” or “Share” means the Class A common stock, par value $0.01 per share, of
the Company, which may be authorized but unissued, or issued and reacquired.

 

 

(f)                                    “Employee”
means a person, including an officer, in the regular employment of the Company
or one of its Subsidiaries who, in the opinion of the Committee, is, or is
expected to have involvement in the management, growth or protection of some
part or all of the business of the Company.

 

(g)                                 “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(h)                                 “Fair
Market Value” means the price per share equal to (i) the average of the
last sale price of the Common Stock on the applicable 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 applicable date on any
given day, the average of the closing bid and asked prices of the Common Stock
on each such exchange on the applicable date or, (iii) if there is no such
bid and asked price on the applicable 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 closing sales price of the Common Stock as reported by NASDAQ on the
applicable date in the over-the-counter market, or, (v) if there has been
no Public Offering, the fair market value of the Common Stock as determined
(x) in the good faith discretion of the Board after consultation with
management of the Company and (y) without any premiums for control or
discounts for minority interests or restrictions on transfer.

 

(i)                                     “Grant”
means an award made to a Participant pursuant to the Plan and described in Section 5,
including, without limitation, an award of a Stock Option, Purchase Stock,
Restricted Stock, Stock Appreciation Right or Dividend Equivalent Right (as
such terms are defined in Section 5), or any combination of the foregoing.

 

(j)                                     “Grant
Agreement” means an agreement between the Company and a Participant that sets
forth the terms, conditions and limitations applicable to a Grant.

 

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

 

(l)                                     “Investors”
means Fusion Acquisition LLC, a Delaware limited liability company, and DLJ
Merchant Banking Partners III, L.P., DLJ Offshore Partners III-1, C.V., DLJ
Offshore Partners III-2, C.V., DLJ Offshore Partners III, C.V., DLJ MB Partners
III GmbH & Co. KG, Millennium Partners II, L.P. and MBP III Plan Investors,
L.P.

 

(m)                               “Participant”
means an Employee, non-employee member of the Board, consultant or other person
having a relationship with the Company or one of its Subsidiaries, to whom one
or more Grants have been made and remain outstanding.

 

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

 

(o)                                 “Public
Offering” means the sale of shares of Common Stock to the public subsequent to
the date hereof pursuant to a registration statement under the Securities Act
of 1933, as amended, which has been declared effective by the Securities and
Exchange Commission (other than a registration statement on Form S-4, S-8
or any other similar form).

 

2

 

(p)                                 “Subsidiary”
means any corporation in an unbroken chain of corporations beginning with the
Company if each of the corporations, or group of commonly controlled
corporations, other than the last corporation in the unbroken chain then owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.

 

3.                                       Administration
of Plan

 

(a)                                  The
Plan shall be administered by the Committee. 
The Committee may adopt its own rules of procedure, and action of a
majority of the members of the Committee taken at a meeting, or action taken
without a meeting by unanimous written consent, shall constitute action by the
Committee.  The Committee shall have the
power and authority to administer, construe and interpret the Plan, to make
rules for carrying it out and to make changes in such rules.  Any such interpretations, rules, and
administration shall be consistent with the basic purposes of the Plan.

 

(b)                                 The
Committee may delegate to the Chief Executive Officer and to other senior
officers of the Company its duties under the Plan subject to such conditions
and limitations as the Committee shall prescribe except that only the Committee
may designate and make Grants to Participants who are subject to Section 16
of the Exchange Act.

 

(c)                                  The
Committee may employ counsel, consultants, accountants, appraisers, brokers or
other persons.  The Committee, the
Company, and the officers and directors of the Company shall be entitled to
rely upon the advice, opinions or valuations of any such persons.  All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon all Participants, the Company and all other interested persons.  No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or the Grants, and all members of the Committee
shall be fully protected by the Company with respect to any such action,
determination or interpretation.

 

4.                                       Eligibility

 

The Committee may from time to time make
Grants under the Plan to such Employees, or other persons having a relationship
with Company or any of its Subsidiaries, and in such form and having such
terms, conditions and limitations as the Committee may determine.  The terms, conditions and limitations of each
Grant under the Plan shall be set forth in a Grant Agreement, in a form
approved by the Committee, consistent, however, with the terms of the Plan; provided,
however, that such Grant Agreement shall contain provisions dealing with
the treatment of Grants in the event of the termination of employment, death or
disability of a Participant, and may also include provisions concerning the
treatment of Grants in the event of a Change in Control of the Company.

 

5.                                       Grants

 

From time to time, the Committee will
determine the forms and amounts of Grants for Participants.  Such Grants may take the following forms in
the Committee’s sole discretion:

 

3

 

(a)                                  Stock
Options - These are options to purchase Common Stock.  At the time of Grant the Committee shall
determine, and shall include in the Grant Agreement or other Plan rules, the
option exercise period, the option exercise price, vesting requirements, and
such other terms, conditions or restrictions on the grant or exercise of the
option as the Committee deems appropriate including, without limitation, the right
to receive dividend equivalent payments on vested and/or unvested options.  In addition to other restrictions contained
in the Plan, an option granted under this Section 5(a) may not be
exercised more than 10 years after the date it is granted.  Payment of the option exercise price shall be
made in cash or in shares of Common Stock that the Participant has held for at
least six months, or a combination thereof, in accordance with the terms of the
Plan, the Grant Agreement and of any applicable guidelines of the Committee in
effect at the time.

 

(b)                                 Stock
Appreciation Rights - The Committee may grant Stock Appreciation Rights in
connection with, or independent of, the grant of a Stock Option.  Each Stock Appreciation Right shall be
subject to such other terms as the Committee may determine.  A Stock Appreciation Right means the right to
transfer and surrender to the Company all or a portion of a Stock Option in
exchange for a cash amount equal to the excess of (i) the aggregate Fair Market
Value, as of the date such Option or portion thereof is transferred or
surrendered, of the Common Stock underlying by such Option or portion thereof,
over (ii) the aggregate exercise price of such Option or portion thereof,
relating to such Common Stock.

 

(c)                                  Purchase
Stock - Purchase Stock are Shares offered to a Participant at such price as
determined by the Committee, the acquisition of which may make the Participant
eligible to receive Grants under the Plan, including, but not limited to, Stock
Options.

 

(d)                                 Restricted
Stock – Restricted Stock are Shares granted by the Committee to a
Participant, without charge to the Participant (other than as may be required
by applicable law).  The Restricted Stock
shall be subject to such other terms as the Committee may determine.

 

(e)                                  Dividend
Equivalent Rights – The Committee may grant Dividend Equivalent Rights
either alone or in connection with the grant of a Stock Option.  A Dividend Equivalent Right means the right
to receive a payment in respect of one share of Common Stock (whether or not
subject to a Stock Option) equal to the amount of any dividend paid in respect
of one share of Common Stock held by a shareholder in the Company.  Each Dividend Equivalent Right shall be
subject to such terms as the Committee may determine.

 

6.                                       Limitations
and Conditions

 

(a)                                  The
number of Shares available for Grants under this Plan shall be 330,000 unless
restricted by applicable law.  Shares
related to Grants that are forfeited, terminated, canceled or expire
unexercised, shall immediately become available for new Grants.

 

(b)                                 No
Grants shall be made under the Plan beyond ten years after the effective date
of the Plan, but the terms of Grants made on or before the expiration of the
Plan may extend beyond such expiration. 
At the time a Grant is made or amended or the terms or conditions of a
Grant are changed in accordance with the terms of the Plan or the Grant
Agreement, the Committee may provide for limitations or conditions on such
Grant.

 

4

 

(c)                                  Nothing
contained herein shall affect the right of the Company or any of its
Subsidiaries to terminate any Participant’s employment at any time or for any
reason.

 

(d)                                 Other
than as specifically provided in the Form of Management Stockholder’s Agreement
attached hereto as Exhibit A, no benefit under the Plan shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to do so shall be void.  No such benefit shall, prior to receipt
thereof by the Participant, be in any manner liable for or subject to the
debts, contracts, liabilities, engagements, or torts of the Participant.

 

(e)                                  Participants
shall not be, and shall not have any of the rights or privileges of,
stockholders of the Company in respect of any Shares purchasable in connection
with any Grant unless and until certificates representing any such Shares have
been issued by the Company to such Participants (or book entry representing
such shares has been made and such Shares have been deposited with the
appropriate registered book-entry custodian).

 

(f)                                    No
election as to benefits or exercise of any Grant may be made during a
Participant’s lifetime by anyone other than the Participant except by a legal
representative appointed for or by the Participant.

 

(g)                                 Absent
express provisions to the contrary, any Grant under this Plan shall not be
deemed compensation for purposes of computing benefits or contributions under
any retirement plan of the Company or its Subsidiaries and shall not affect any
benefits under any other benefit plan of any kind now or subsequently in effect
under which the availability or amount of benefits is related to level of
compensation.  This Plan is not a “Retirement
Plan” or “Welfare Plan” under the Employee Retirement Income Security Act of
1974, as amended.

 

(h)                                 Unless
the Committee determines otherwise, no benefit or promise under the Plan shall
be secured by any specific assets of the Company or any of its Subsidiaries,
nor shall any assets of the Company or any of its Subsidiaries be designated as
attributable or allocated to the satisfaction of the Company’s obligations
under the Plan.

 

7.                                       Transfers
and Leaves of Absence

 

For purposes of the Plan, unless the
Committee determines otherwise: (a) a transfer of a Participant’s employment
without an intervening period of separation among the Company and any
Subsidiary (or among any Subsidiaries) shall not be deemed a termination of
employment, and (b) a Participant who is granted in writing a leave of absence
or who is entitled to a statutory leave of absence shall be deemed to have
remained in the employ of the Company (and any Subsidiary) during such leave of
absence.

 

8.                                       Adjustments

 

In the event of any change in the outstanding
Common Stock by reason of a stock split, spin-off, stock combination,
reclassification, recapitalization, liquidation, dissolution, reorganization,
merger, Change in Control, or other event affecting the capital stock of the
Company, the Committee may adjust appropriately (a) the number and kind of
shares subject to

 

5

 

the Plan and available for or covered by Grants and (b) share prices
related to outstanding Grants, and make such other revisions to outstanding
Grants as it deems, in good faith, are equitably required (including, without
limitation, to the exercise price of Stock Options).

 

9.                                       Merger,
Consolidation, Exchange, Acquisition, Liquidation or Dissolution

 

In its absolute discretion, acting in good
faith, and on such terms and conditions as it deems appropriate, coincident
with or after the grant of any Grant, the Committee may provide that such Grant
cannot be exercised after the amalgamation, merger or consolidation of the
Company with or into another corporation, the exchange of all or substantially
all of the assets of the Company for the securities of another corporation, the
acquisition by another corporation of 80% or more of the Company’s then
outstanding shares of voting stock or the recapitalization, reorganization, reclassification,
liquidation, dissolution, or other event affecting the capital stock of the
Company, and the Committee shall, on such terms and conditions as it deems
appropriate, acting in good faith, also provide, either by the terms of such
Grant or by a resolution adopted prior to the occurrence of such amalgamation,
merger, consolidation, exchange, acquisition, recapitalization, reorganization,
reclassification, liquidation, dissolution or other event affecting the capital
stock of the Company, that, after written notice to all affected Participants
and for a reasonable period of time prior to such event, such Grant shall be
exercisable as to any Shares subject thereto which is being made unexercisable
after any such event, notwithstanding anything to the contrary herein (but
subject to the provisions of Section 6(b)) and that, upon the occurrence
of such event, such Grant shall terminate and be of no further force or effect;
provided, however, that the Committee may also provide, in its
absolute discretion, that even if the Grant shall remain exercisable after any
such event, from and after such event, any such Grant shall be exercisable only
for the kind and amount of securities and/or other property, or the cash
equivalent thereof (as determined by the Committee in good faith), receivable
as a result of such event by the holder of a number of Shares for which such
Grant could have been exercised immediately prior to such event.

 

10.                                 Amendment
and Termination

 

(a)                                  The
Committee shall have the authority to make such amendments to any terms and
conditions applicable to outstanding Grants as are consistent with this Plan
provided that no such action shall modify any Grant in a manner adverse to the
Participant without the Participant’s consent except as such modification is
provided for or contemplated in the terms of the Grant or this Plan (except
that any adjustment that is made pursuant to Section 8 or 9 hereof shall
be made by the Committee reasonably and in good faith).

 

(b)                                 The
Board of Directors may amend, suspend or terminate the Plan except that no such
action, other than an action under Section 8 or 9 hereof, may be taken
which would, without stockholder approval, increase the aggregate number of
Shares available for Grants under the Plan, decrease the price of outstanding
Grants, change the requirements relating to the Committee, extend the term of
the Plan or be materially adverse to all Participants with respect to any
outstanding Grants.

 

6

 

11.                                 Governing
Law; International Participants

 

(a)                                  This
Plan shall be governed by and construed in accordance with the laws of Delaware
applicable therein.

 

(b)                                 With
respect to Participants who reside or work outside the United States of America
and who are not (and who are not expected to be) “covered employees” within the
meaning of Section 162(m) of the Code, the Committee may, in its sole
discretion, amend the terms of the Plan or Awards with respect to such
Participants in order to conform such terms with the requirements of local law
or to obtain more favorable tax or other treatment for a Participant, the
Company or an Affiliate.

 

12.                                 Withholding
Taxes

 

The Company shall have the right to deduct
from any cash payment made under the Plan any minimum federal, state or local
income or other taxes required by law to be withheld with respect to such
payment.  It shall be a condition to the
obligation of the Company to deliver Shares upon the exercise of a Stock Option
that the Participant pay to the Company such amount as may be requested by the
Company for the purpose of satisfying any liability for such minimum
withholding taxes.

 

13.                                 Effective
Date and Termination Dates

 

The Plan shall be effective on and as of the
date of its approval by the stockholders of the Company and shall terminate ten
years later, subject to earlier termination by the Board pursuant to Section 10.

 

Approved by stockholders on January 6, 2005.

 

7

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