Document:

Exhibit 10.4

 

 

 

STOCKHOLDERS AGREEMENT

 

of

 

WOODSIDE HOMES, INC.

 

 

dated as of [·], 2014

 

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
1.1
    	
Certain Defined Terms
    	
1
    
	
1.2
    	
Other Definitional Provisions
    	
6
    
	
 
    	
 
    	
 
    
	
ARTICLE II CORPORATE GOVERNANCE
    	
7
    
	
 
    	
 
    	
 
    
	
2.1
    	
Board Representation
    	
7
    
	
2.2
    	
Size of the Board
    	
7
    
	
2.3
    	
Expenses
    	
8
    
	
2.4
    	
Committees of the Board
    	
8
    
	
2.5
    	
Additional Management Provisions
    	
9
    
	
2.6
    	
Woodside LLC Activities; Approvals
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE III INFORMATION RIGHTS
    	
10
    
	
 
    	
 
    	
 
    
	
3.1
    	
Available Financial Information
    	
10
    
	
3.5
    	
Preemptive Rights
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE IV MISCELLANEOUS
    	
12
    
	
 
    	
 
    	
 
    
	
4.1
    	
Termination of Rights
    	
12
    
	
4.2
    	
Confidentiality
    	
13
    
	
4.3
    	
Amendments and Waivers
    	
13
    
	
4.4
    	
Successors, Assigns and Permitted Transferees
    	
13
    
	
4.5
    	
Notices
    	
14
    
	
4.6
    	
Further Assurances
    	
15
    
	
4.7
    	
Entire Agreement; No Third Party Beneficiaries
    	
15
    
	
4.8
    	
Restrictions on Other Agreements; By-laws
    	
15
    
	
4.9
    	
Governing Law
    	
15
    
	
4.10
    	
Jurisdiction and Forum; Waiver of Jury Trial
    	
16
    
	
4.11
    	
Severability
    	
16
    
	
4.12
    	
Enforcement
    	
16
    
	
4.13
    	
Titles and Subtitles
    	
16
    
	
4.14
    	
Effectiveness
    	
16
    
	
4.15
    	
No Recourse
    	
16
    
	
4.16
    	
Counterparts; Facsimile Signatures
    	
16
    

 

Exhibit A — Joinder Agreement

 

i

 

THIS STOCKHOLDERS AGREEMENT (as amended from time to time, this “Agreement”) is entered into as of [·], 2014, among WOODSIDE HOMES, INC., a Delaware corporation (the “Company”), and each of [Oaktree Funds] (each, a “Stockholder” and collectively, the “Stockholders”).  Capitalized terms used herein without definition have the meaning given to them in Section 1.1.

 

RECITALS

 

WHEREAS, the Company is undertaking an underwritten initial public offering (the “IPO”) of shares of its Class A Common Stock, par value $0.01 per share (“Class A Common Stock”);

 

WHEREAS, as a result of a reorganization in connection with the IPO, the Stockholders will own membership interests (“Units”) in Woodside Homes Company, LLC, a Delaware limited liability company (“Woodside LLC”), and shares of the Company’s Class B Common Stock, par value $0.01 per share (“Class B Common Stock”), which together, subject to certain restrictions, are exchangeable for Class A Common Stock pursuant to that certain exchange agreement, dated as of [the date hereof], by and among Woodside LLC, the Company, the Stockholders and the other parties named therein (the “Exchange Agreement”); and

 

WHEREAS, in connection with, and effective upon, the date of completion of the IPO (the “Closing Date”), the Company and the Stockholders wish to set forth certain understandings between such parties, including with respect to certain governance 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

 

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

 

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with, such Person, including for the avoidance of doubt any investment fund or other entity controlled or managed by, or under common control or management with, such Person; provided, however, that in no event shall (i) 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 (ii) any Person that is an operating company primarily engaged in the business of homebuilding or developing residential communities or a parent company of any such Person (other than an investment fund that, in addition to its interest in such Person, has investments in companies other than such Person) constitute an “Affiliate” of any Stockholder.

 

“Agreement” has the meaning given to such term in the preamble.

 

“Annual Budget” has the meaning assigned to such term in Section 3.1(a)(ii).

 

“As-Exchanged Basis” has the meaning set forth in the definition of Post-IPO Shares.

 

“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.  Notwithstanding the foregoing, for all purposes of this Agreement, each Stockholder shall be deemed to beneficially own any shares of Common Stock issuable upon the exchange of Units of Woodside LLC in accordance with the Exchange Agreement.

 

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

 

“Business Day” means any day other than a Saturday, Sunday or a day on which commercial banks are authorized or required to close in New York City, New York

 

“Bylaws” means the Amended and Restated 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 and the terms of the Charter.

 

“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.

 

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

 

“Class B Common Stock” has the meaning set forth in the Recitals.

 

“Closing Date” has the meaning set forth in the Recitals.

 

“Common Stock” means the shares of Class A Common Stock, including any shares of capital stock into which Class A Common Stock may be converted (as a result of a recapitalization, share exchange or similar event) or that are issued with respect to Class A Common Stock (including, without limitation, with respect to any stock split or stock dividend, or a successor security).

 

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“Company” has the meaning given to such term in the preamble.

 

“control” (including the terms “controlling”, “controlled by” and “under common control with”)  means, with respect to the relationship between or among two or more Persons, 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.

 

“Director” means any member of the Board.

 

“EDGAR” means the SEC’s Electronic Gathering, Analysis and Retrieval System or any successor thereto.

 

“Equity Securities” means all Common Stock of the Company and any and all securities of the Company or any of its subsidiaries, convertible into, or exchangeable or exercisable for, options, warrants or other rights to acquire, shares of Common Stock.

 

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

 

“Exchange Agreement” has the meaning set forth in the Recitals.

 

“Excluded Securities” means Equity Securities issued in connection with: (a) a grant to or exercise by any existing or prospective consultants, employees, officers or Directors pursuant to any stock option, employee stock purchase or similar equity-based plans or other compensation arrangement; (b) the conversion or exchange of any securities of Woodside Homes Company LLC into shares of Common Stock, including pursuant to the Exchange Agreement; (c) the issuance of any Common Stock or any security convertible into, or exchange or exercisable for, shares of Common Stock by the Company in a primary or underwritten public offering of such Common Stock or other security or in an offering in which such Common Stock or other securities will be resold in reliance on Rule 144A under the Securities Act; (d) any acquisition by the Company of the stock, assets, properties or business of any Person; (e) any merger, consolidation, acquisition or other business combination involving the Company or any Subsidiary of the Company; (f) a stock split, stock dividend or any similar recapitalization of the Company; (g) the conversion or exchange of any security issued pursuant to clause (c) above; or (h) any issuance of warrants or other similar rights to purchase Equity Securities to lenders or other institutional investors (excluding the Stockholders) in any arm’s length transaction providing debt financing to the Company or any of its subsidiaries (collectively, the “Financing Warrants”) [where such Financing Warrants, together with all then outstanding Financing Warrants, are not equal to and not convertible into an aggregate of more than 5% of the outstanding Equity Securities on a fully diluted basis at the time of the issuance of such Financing Warrants, in each case, approved by the Board.

 

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“Exercise Period” has the meaning given to such term in Section 3.3(c).

 

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

 

“Group” has the meaning given to such term in Section 13(d)(3) of the Exchange Act and Rule 13d-5(b)(1) thereunder.

 

“Information” means all confidential information about the Company or any of its Subsidiaries that is or has been furnished to any Stockholder or any of its Representatives by or on behalf of the Company or any of its Subsidiaries, or any of their respective Representatives, whether written or oral or in electronic or other form and whether prepared by the Company, its advisers or otherwise, together with all written or electronically stored documentation prepared by such Stockholder or its Representatives based on or reflecting, in whole or in part, such information; provided that the term “Information” does not include any information that (i) is or becomes generally available to the public through no action or omission by such Stockholder or its Representatives, (ii) is or becomes available to such Stockholder on a non-confidential basis from a source, other than the Company or any of its Subsidiaries, or any of their respective Representatives, that to such Stockholder’s knowledge, after reasonable inquiry, is not prohibited from disclosing such information to such Stockholder by a contractual, legal or fiduciary obligation, (iii) is independently developed by a Stockholder or its Representatives or Affiliates on its own behalf without use of any Information or (iv) was in such Stockholder’s, its Affiliates’ or its Representatives’ possession prior to the date of this Agreement and was not obtained from the Company, Woodside LLC or their respective Affiliates.

 

“IPO” has the meaning given to such term in the Recitals.

 

“Insolvency Event” means any of the following: (a) Woodside LLC files a petition under any chapter of title 11 of the United States Code (the “Bankruptcy Code”) or commences a proceeding under any similar law in any other jurisdiction or any other similar law of any jurisdiction affecting creditors’ rights; makes an assignment for the benefit of its creditors; or commences a proceeding for the appointment of a receiver, trustee, liquidator, custodian or conservator of itself or of the whole or substantially all of its property; (b) a petition is filed against Woodside LLC under any chapter of the Bankruptcy Code or any proceeding is commenced under any similar law of any other jurisdiction, or any other similar law of any jurisdiction affecting creditors’ rights or for the appointment of a receiver, trustee, liquidator, custodian or conservator of Woodside LLC or of the whole or substantially all of its property and Woodside LLC consents to, approves of or acquiesces in any such petition or proceeding (including by any decision not to oppose any such petition or proceeding) or (c) Woodside LLC admits in writing its inability to pay its debts generally as such debts become due.

 

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

 

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

 

“Oaktree Designee” has the meaning given to such term in Section 2.1(c).

 

“Permitted Transferee” means, with respect to any Stockholder, an Affiliate of such Stockholder, including any investment fund or other entity or separately managed account controlled or managed by, or under common control with, such Stockholder; provided, however, that in no event shall (i) 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 (ii) any Person that is an operating company primarily engaged in the business of homebuilding or developing residential communities or a parent company of any such Person (other than an investment fund that, in addition to its interest in such Person, has investments in companies other than such Person) constitute a “Permitted Transferee.”  Any Stockholder shall also be a Permitted Transferee of the Permitted Transferees of itself.

 

“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 any two or more of the foregoing.

 

“Post-IPO Shares” means, with respect to the Stockholders, the number of shares of Common Stock beneficially owned, determined assuming each Unit (together with each share of Class B Common Stock) held by such Stockholders was exchanged for Class A Common Stock pursuant to the terms of the Exchange Agreement (hereinafter,  on an “As-Exchanged Basis”),  by the Stockholders following completion of the IPO (after taking into account (i) any shares sold by the Stockholders and their Affiliates as selling stockholders in the IPO and, if applicable, after delivery of shares of Common Stock by the Stockholders and their Affiliates to the underwriters in respect of an overallotment option granted to them by the Stockholders and their Affiliates and (ii) the purchase of any Units by the Company from the Stockholders using the proceeds of the IPO), as such number of shares may be equitably adjusted to reflect any dividend, split, subdivision or combination of shares, or reclassification, recapitalization, merger, consolidation or other reorganization of or with respect to the Common Stock occurring subsequent to such time.

 

“Pro Rata Ownership Interest” means, with respect to any Stockholder, on any issuance date for New Securities, such Stockholders’ percentage ownership (on an As-Exchanged Basis) of the total number of shares of Common Stock outstanding on such date immediately prior to the issuance of such New Securities, determined on a fully-diluted basis.

 

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“Pro Rata Portion” has the meaning given to such term in Section 3.3(a).

 

“Representatives” means, with respect to any Person, any of such Person’s, or its Affiliates’, directors, officers, employees, general partners, Affiliates, direct or indirect shareholders, members or limited partners, attorneys, accountants, financial and other advisers, and other agents and representatives, including in the case of Stockholders any person designated for nomination by the Board as a Director by the Stockholders.

 

“Stockholder” and “Stockholders” have the meanings given to such terms in the preamble, and includes any Permitted Transferee of such Stockholder to whom the rights and obligations under this Agreement are assigned in accordance with Section 4.4 hereof.

 

“Stonehill Agreement” means that certain stockholders agreement, dated as of the date hereof, by and between the Company and Stonehill Institutional Partners, L.P.

 

“Stonehill Designee” has the meaning given to such term in the Stonehill Agreement.

 

“Subsidiary” means, with respect to any Person, any corporation, entity or other organization whether incorporated or unincorporated, of which (i) such first Person directly or indirectly owns or controls at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions or (ii) such first Person is a general partner, managing member or otherwise exercises similar management control.

 

“Unit” has the meaning set forth in the Recitals.

 

“Woodside LLC” has the meaning set forth in the Recitals.

 

“Woodside LLC Agreement” means that certain Second Amended and Restated Limited Liability Company Agreement of Woodside LLC, as the same may be amended, modified or supplemented from time to time in accordance with the terms thereof.

 

1.2          Other Definitional Provisions.

 

(a)           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.

 

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

 

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ARTICLE II

 

CORPORATE GOVERNANCE

 

2.1          Board Representation.

 

(a)           The Stockholders shall have the right, but not the obligation, to nominate:  (i) two individuals for election to the Board so long as the Stockholders or their Affiliates collectively beneficially own Common Stock representing at least 60% of their Post-IPO Shares and (ii) one individual for election to the Board so long as the Stockholders or their Affiliates collectively beneficially own Common Stock representing at least 20% (but less than 60%) of their Post-IPO Shares.

 

(b)           If at any time the Stockholders have nominated fewer designees than they are entitled to nominate under Section 2.1(a), the Stockholders shall have the right, but not the obligation, at any time, to designate such additional designees to which they are entitled for election or appointment to the Board.

 

(c)           In the event that a vacancy is created at any time by the death, retirement,  resignation or disqualification of any Oaktree Designee (as defined below) during his or her term, the resulting vacancy on the Board and any committee of the Board shall be filled by an individual designated by the Stockholders. Each individual nominated or designated by the Stockholders pursuant to Sections 2.1(a), (b) or (c) shall be referred to herein as an “Oaktree Designee.”

 

(d)           The Company agrees, to the fullest extent permitted by applicable law (including with respect to any fiduciary duties under Delaware law), to (i) include in the slate of nominees recommended by the Company and/or the Board (or any committee thereof) for election to the Board at any meeting of stockholders called for the purpose of electing Directors the Oaktree Designees and (ii) to recommend to the stockholders of the Company each such individual to be elected as a Director and to solicit proxies or consents in favor thereof at least to the same extent as proxies or consents are solicited in favor of any other nominee recommended by the Company and/or the Board (or any committee thereof).  The Company is entitled to identify each such individual as an Oaktree Designee pursuant to this Agreement.  Without limiting the foregoing, the Company shall, to the fullest extent permitted by applicable law (including with respect to any fiduciary duties under Delaware law), as promptly as practicable, take all necessary and appropriate actions to cause the election, removal and replacement of the Oaktree Designees pursuant to this Section 2.1 (including, without limitation, increasing the size of the Board or any committee of the Board to the extent necessary to give effect to Section 2.1(b)).

 

2.2          Size of the Board.  On the Closing Date, the Board shall consist of seven (7) Directors.  The size of the Board shall not be increased without the prior written 

 

7

 

consent of the Stockholders so long as the Stockholders or their Affiliates collectively beneficially own at least 10% of the outstanding Common Stock; provided, however, that the size of the Board may be increased without the consent of the Stockholders solely to the extent necessary to appoint an Oaktree Designee in accordance with Section 2.1(b) of this Agreement or a Stonehill Designee in accordance with Section 2.1(b) of the Stonehill Agreement, in each case until the next annual election of Directors.

 

2.3          Expenses.   Each Director shall be entitled to reimbursement from the Company for his or her reasonable out-of-pocket expenses (including travel) incurred in attending any meeting of the Board or any committee thereof or governing body of any Subsidiary of the Company or any committee thereof to the same extent as other Directors that are not members of management of the Company are reimbursed.

 

2.4          Committees of the Board.

 

(a)           From and after the Closing Date, the Company shall cause the Board to maintain the following committees: (i) an Audit Committee, (ii) a Compensation Committee, (iii) a Nominating and Corporate Governance Committee, (iv) any other committee necessary to comply with applicable laws and regulations and New York Stock Exchange rules and regulations and (v) any other committee as the Board shall determine in its discretion. Each committee shall be comprised of at least three (3) members of the Board and shall have the responsibilities described in resolutions of the Board creating such committee.

 

(b)           Each committee of the Board shall include at least one (1) Oaktree Designee so long as the Stockholders or their Affiliates collectively beneficially own Common Stock representing at least 20% of their Post-IPO Shares; provided that the right of any such Oaktree Designee to serve on a committee shall be subject to the Company’s obligation to comply with any applicable independence requirements of a national securities exchange upon which the Company’s Common Stock is listed.

 

(c)           On the Closing Date, each committee shall be comprised of three (3) Directors.  The size of each committee of the Board shall not be increased without the prior written consent of the Stockholders so long as the Stockholders or their Affiliates collectively beneficially own at least 10% of the outstanding Common Stock; provided, however, that the size of any committee of the Board may be increased without the consent of the Stockholders solely to the extent necessary to permit an Oaktree Designee appointed in accordance with Section 2.1(b) and Section 2.4(b) of this Agreement or a Stonehill Designee appointed in accordance with Section 2.1(b) and Section 2.4(b) of the Stonehill Agreement to join such committee until the next annual election of Directors.

 

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2.5          Additional Management Provisions.

 

Each of the parties covenants and agrees to take all best efforts within its control to ensure that the Charter and Bylaws do not, at any time, conflict with the provisions of this Agreement as in effect on the date hereof.

 

2.6          Woodside LLC Activities; Approvals.  For so long as any Units remain outstanding (other than any Units held by the Company or its Subsidiaries), the Company, in its capacity as Managing Member of Woodside LLC, shall not cause or permit Woodside LLC to take any action without the approval of the Board to the extent such action would require the approval of the Board if taken by the Company itself, including, without limitation, the following:

 

(a)           to incur indebtedness (other than an amount that is not (i) material to the Company and its Subsidiaries, taken as a whole, and (ii) incurred in the ordinary course of business);

 

(b)           to offer, sell or issue any equity securities, or offer, sell or issue any securities which are convertible into or exchangeable or exercisable for equity securities, including, but not limited to, any preferred shares, other than Units that are offered, sold or issued solely to the Company in accordance with the Woodside LLC Agreement;

 

(c)           to effect or cause to be effected, or enter any contract or agreement that would, directly or indirectly, result or have the effect of causing, a Change of Control (as defined in the Exchange Agreement);

 

(d)           to approve an Insolvency Event;

 

(e)           pay or declare any dividends on any securities of Woodside LLC, distribute any assets (including property or cash) of Woodside LLC other than as required pursuant to the terms of the Woodside LLC Agreement or in the ordinary course of business or repurchase any outstanding Units;

 

(f)            make any material acquisition or disposition (whether by merger, stock purchase, asset purchase or otherwise) of another business or party other than in the ordinary course of business; or

 

(g)           adopt or amend any shareholder rights plan or similar agreement.

 

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ARTICLE III

 

INFORMATION RIGHTS

 

3.1          Available Financial Information.

 

(a)           Upon written request of the Stockholders, the Company will deliver, or cause to be delivered, to the Stockholders or their designated Representatives:

 

(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 a consolidated statement of operations 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 (i) a comparison of such statements to the corresponding periods of the prior fiscal year and to the Company’s business plan then in effect and (ii) such other non-GAAP financial and other financial data that the chief financial officer of the Company deems relevant for consideration by the Board on a monthly basis;

 

(ii)           an annual budget, a business plan and financial forecasts for the Company for the next fiscal year of the Company (the “Annual Budget”), as soon as practicable, and in any event within five (5) Business Days , after approval of the Board, which shall include at least a projection of income and a projected statement of operations for each fiscal quarter in such fiscal year, in each case prepared in reasonable detail; it being recognized by the Stockholders 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 Annual Budget shall be delivered to the Stockholders as promptly as practicable following the close of the most recent fiscal quarter 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, (x) the annual financial statements required to be filed by the Company pursuant to the Exchange Act, (y) 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 (z) a Company-prepared comparison to the Annual Budget 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, (x) the quarterly financial statements required to be filed by the Company pursuant to the Exchange Act, (y) 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

 

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accordance with GAAP (subject to normal year-end audit adjustments and the absence of notes thereto) and setting forth in each case in comparative form the figures for the corresponding period of the previous fiscal year and (z) a Company-prepared comparison to the Annual Budget for such year as approved by the Board.

 

(b)           Notwithstanding anything to the contrary in Sections 3.1(a)(iii) and (a)(iv), the Company may satisfy its obligations thereunder by (i) providing the financial statements of any wholly-owned Subsidiary of the Company to the extent that such financial statements reflect the entirety of the operations of the business or (ii) filing such financial statements of the Company or any wholly-owned Subsidiary of the Company whose financial statements satisfy the requirements of clause (i), as applicable, with the Securities and Exchange Commission on EDGAR or in such other manner as makes them publicly available.

 

3.2          Compliance with Securities Laws.  Each Stockholder acknowledges that Information furnished to it pursuant to this Agreement may include material non-public information concerning the Company and its related parties or their respective securities and hereby confirms that it is familiar with the Exchange Act and the rules and regulations promulgated thereunder.

 

3.3          Preemptive Rights.

 

(a)           [Without duplication of the rights set forth in Section 3.2(f) of the Woodside LLC Agreement, so long as the Stockholders collectively beneficially own Common Stock representing at least 20% of their Post-IPO Shares, the Company hereby grants to each of the Stockholders the right to purchase, on any issuance date of new Equity Securities other than Excluded Securities that the Company may from time to time issue or sell to any other Person for cash or no consideration (“New Securities”), a number of New Securities in an amount such that such Stockholder’s Pro Rata Ownership Interest shall remain unaffected by the issuance of shares of Common Stock issuable upon conversion, exchange or exercise of the New Securities (such Stockholders’ “Pro Rata Portion”).

 

(b)           The Company shall give written notice (an “Issuance Notice”) of any proposed issuance or sale described in subsection (a) above to the Stockholders at least 15 Business Days prior to such issuance or sale.  The Issuance Notice shall set forth the material terms and conditions of the proposed issuance, including:

 

(i)            the number and description of the New Securities proposed to be issued and the percentage of the Company’s outstanding Equity Securities (on an As-Exchanged Basis and fully diluted basis) such issuance would represent;

 

(ii)           the proposed issuance date; and

 

(iii)          the proposed purchase price per New Security.

 

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(c)           Each of the Stockholders shall for a period of 15 Business Days following the receipt of an Issuance Notice (the “Exercise Period”) have the right to elect irrevocably to purchase its Pro Rata Portion of the New Securities at the purchase price, and on the same terms and conditions, set forth in the Issuance Notice (or such other purchase price agreed between the Member and the Company) by delivering a written notice to the Company.  The closing of any purchase of New Securities pursuant to this Section 3.3 by any of the Stockholders shall be consummated concurrently with the consummation of the issuance or sale described in the Issuance Notice.

 

(d)           Upon the issuance or sale of any New Securities in accordance with this Section 3.3, the Company shall deliver certificates (if any) evidencing the New Securities, which New Securities shall be issued free and clear of any liens (other than those arising hereunder and those attributable to the actions of the purchasers thereof), and the Company shall so represent and warrant to the purchasers thereof, and further represent and warrant to such purchasers that such New Securities shall be, upon issuance thereof to the and after payment therefor, duly authorized, validly issued, fully paid and non-assessable.  Each Stockholder shall deliver to the Company the purchase price for the New Securities purchased by it by certified or bank check or wire transfer of immediately available funds.  Each party to the purchase and sale of New Securities shall take all such other actions as may be reasonably necessary to consummate the purchase and sale including, without limitation, entering into such additional agreements as may be necessary or appropriate.]

 

ARTICLE IV

 

MISCELLANEOUS

 

4.1          Termination of Rights.  This Agreement shall terminate on the earlier to occur of (a) such time as the Stockholders cease to beneficially own any shares of Common Stock and (b) upon the delivery of a written notice by the Stockholders to the Company requesting that this Agreement terminate.

 

Confidentiality.  Each Stockholder hereby agrees, on behalf of itself and its Representatives, that it and its Representatives will keep strictly confidential and will not disclose, divulge or use for any purpose, other than to hold, vote and monitor its existing investment in the Company, any Information; provided that nothing herein shall prevent the Stockholders from (i) disclosing such Information (a) upon the order of any court or administrative agency, (b) upon the request or demand of any regulatory agency or authority having jurisdiction over such party, (c) to the extent required by law or legal process or required or requested pursuant to subpoena, interrogatories or other discovery requests, (d) to the extent necessary in connection with the exercise of any remedy hereunder, (e) to such party’s Representatives that in the reasonable judgment of such party need to know such Information, (f) to any potential transferee of Equity Securities as long as such transferee agrees to be bound by the provisions of this Section 4.2 as if a

 

12

 

Stockholder and the Company consents to such disclosure (such consent not to be unreasonably withheld or delayed) or (g) as part of a Stockholder’s or its Affiliates’ reporting or review procedures, or in connection with a Stockholder’s or its Affiliates’ fund-raising, marketing, informational or reporting activities; provided that recipients of Information provided pursuant to this subsection (g) are party to a non-disclosure or other confidentiality obligation; provided further that, in the case of clause (a), (b) or (c), such party shall notify the other parties hereto of the proposed disclosure as far in advance of such disclosure as practicable and use reasonable efforts to ensure that any Information so disclosed is accorded confidential treatment, when and if available, (ii) using such Information (a) to review and evaluate a Stockholders’ investment in the Company, or (b) in connection with any transactions contemplated by this Agreement or (iii) pursuing or consummating any transaction that such Stockholder would otherwise be permitted to pursue or consummate pursuant to Article XII of the Company’s Amended and Restated Certificate of Incorporation.  Notwithstanding the foregoing, any Stockholder and each of its Representatives may disclose to any and all Persons, without limitation of any kind, the tax treatment, tax strategies and tax structure of the Company and all materials of any kind (including opinions or other tax analyses) that are provided to the Stockholder and its Representatives relating to such tax treatment, tax strategies and tax structure.

 

4.2          Amendments and Waivers.  This Agreement may be amended, supplemented or otherwise modified only by a written instrument executed by the Company and Stockholders beneficially owning a majority of the shares of Common Stock then beneficially owned by the Stockholders.  Neither the failure nor delay on the part of any party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.  No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

 

4.3          Successors, Assigns and Permitted 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.  Any Stockholder may assign its rights and obligations hereunder to any Permitted Transferee. Notwithstanding the foregoing, no assignment permitted under the terms of this Section 4.4 will be effective unless the transferee to which such assignment is being made, if not a Stockholder, has delivered a joinder agreement, substantially in the form attached hereto as Exhibit A, agreeing to be bound by the terms and conditions of this Agreement and become a party hereto, whereupon such Person will be treated as a Stockholder for all purposes of this Agreement, with the same rights, benefits and obligations hereunder.

 

4.4          Notices.  All notices and other communications to be given to any party hereunder shall be sufficiently given for all purposes hereunder if in writing and

 

13

 

delivered by hand, courier or overnight delivery service, or when received in the form of a facsimile or other electronic transmission (receipt confirmation requested), and shall be directed to the address set forth below (or at such other address or facsimile number as such party shall designate by like notice):

 

(a)           if to the Company, to:

 

Woodside Homes, Inc.

39 East Eagleridge Drive, Suite 102

North Salt Lake City, Utah  84054

Attention:  General Counsel

Fax:  (801) 813-8003

 

with a copy (which shall not constitute notice) to:

 

Milbank, Tweed, Hadley & McCloy LLP
 601 Figueroa Street, 30th Floor
 Los Angeles, California 90017
 Attention:  Deborah J. Conrad, Esq.
 Fax:  (213) 892-4721

 

(b)           if to a Stockholder party to this Agreement on the date hereof, to:

 

Oaktree Capital Management, L.P.

333 South Grand Avenue, 29th Floor

Los Angeles, California  90071

Attention:  Ken Liang and Armen Panossian
 Fax:  (213) 830-6499

 

with a copy (which shall not constitute notice) to:

 

Debevoise & Plimpton LLP
 919 Third Avenue
 New York, New York 10022
 Attention:  Matthew E. Kaplan, Esq.
 Fax:  (212) 521-7334

 

(c)           if to any other Stockholder, to the address of such other Stockholder as shown in the stock record book of the Company.

 

4.5          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

 

14

 

the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the parties hereunder.  The Company hereby grants the Stockholders and their respective Affiliates permission to use the Company’s and its subsidiaries’ name and logo in marketing materials.

 

4.6          Entire Agreement; No Third Party Beneficiaries.  This Agreement constitutes the entire agreement among the parties with respect to the subject matter of this Agreement and supersedes any prior discussions, correspondence, negotiation, proposed term sheet, agreement, understanding or agreement and there are no agreements, understandings, representations or warranties between the parties other than those set forth or referred to in this Agreement, and this Agreement is not intended to confer in or on behalf of any Person not a party to this Agreement (and their successors and assigns) any rights, benefits, causes of action or remedies with respect to the subject matter or any provision hereof.

 

4.7          Restrictions on Other Agreements; Bylaws.  The provisions of this Agreement as in effect on the date hereof shall be controlling if any such provision or the operation thereof conflicts with the provisions of the Bylaws.  Each of the parties covenants and agrees to take, or cause to be taken, to the fullest extent permitted by applicable law (including with respect to any fiduciary duties under Delaware law), any action reasonably requested by the Company or any Stockholder, as the case may be, to amend the Bylaws so as to avoid any conflict with the provisions hereof as in effect on the date hereof, including, in the case of the Stockholders, to vote their shares of Common Stock or Class B Common Stock, as applicable.

 

4.8          Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to principles of conflicts of laws thereof to the extent that such principles would require or permit the application of laws of another jurisdiction.

 

4.9          Jurisdiction and Forum; Waiver of Jury Trial.  In any judicial proceeding involving any dispute, controversy or claim arising out of or relating to this Agreement, each of the parties unconditionally accepts the jurisdiction and venue of the Delaware Court of Chancery or, if the Court of Chancery does not have subject matter jurisdiction over this matter, the Superior Court of the State of Delaware (Complex Commercial Division), or if jurisdiction over the matter is vested exclusively in federal courts, the United States District Court for the District of Delaware, and the appellate courts to which orders and judgments thereof may be appealed.  In any such judicial proceeding, the parties agree that in addition to any method for the service of process permitted or required by such courts, to the fullest extent permitted by law, service of process may be made by delivery provided pursuant to the directions in Section 4.5.  EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW TRIAL BY JURY IN ANY JUDICIAL PROCEEDING

 

15

 

INVOLVING ANY DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

4.10        Severability.  If any provision of this Agreement, or the application of such provision to any Person or circumstance or in any jurisdiction, shall be held to be invalid or unenforceable to any extent, (a) the remainder of this Agreement shall not be affected thereby, and each other provision hereof shall be valid and enforceable to the fullest extent permitted by law, (b) as to such Person or circumstance or in such jurisdiction such provision shall be reformed to be valid and enforceable to the fullest extent permitted by law and (c) the application of such provision to other Persons or circumstances or in other jurisdictions shall not be affected thereby.

 

4.11        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.  Any requirements for the securing or posting of any bond with respect to such remedy are hereby waived by each of the parties hereto.

 

4.12        Titles and Subtitles.  The titles of the articles, sections and subsections of this Agreement are for convenience of reference only and will not affect the meaning or interpretation of this Agreement.

 

4.13        Effectiveness.  This Agreement shall become effective upon the Closing Date.

 

4.14        No Recourse.  This Agreement may only be enforced against, and any claims or cause of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as parties hereto and no past, present or future Affiliate, Director, officer, employee, incorporator, member, manager, partner, stockholder, agent, attorney or representative of any party hereto shall have any liability for any obligations or liabilities of the parties to this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby.

 

4.15        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 or electronic signature(s).

 

[Rest of page intentionally left blank]

 

16

 

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

 

 

	
 
    	
WOODSIDE   HOMES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

17

 

	
 
    	
OAKTREE AC INVESTCO, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
OAKTREE AC INVESTCO 2, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
OAKTREE AC INVESTCO 3, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

[Signature Page - Stockholders Agreement]

 

18

 

Exhibit A

 

JOINDER AGREEMENT

 

Reference is made to the Stockholders Agreement, dated as of [·], 2014 (as amended from time to time, the “Stockholders Agreement”), among Woodside Homes, Inc. (the “Company”) and certain stockholders of the Company party thereto.  The undersigned agrees, by execution hereof, to become a party to, and to be subject to the rights and obligations under, the Stockholders Agreement.

 

 

	
[NAME]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Date:
    	
 
    
	
 
    	
 
    
	
Address:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Acknowledged   by:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
WOODSIDE   HOMES, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Date:
    	
 
    

 

19Exhibit 10.11

 

PH HOLDING LLC
  WOODSIDE SHARE UNIT PLAN

 

Amended and Restated as of May 30, 2012

Originally Effective as of January 1, 2011

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE I
    	
 
    	
ESTABLISHMENT, PURPOSE   AND TERM
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1.1
    	
 
    	
Establishment
    	
 
    	
1
    
	
1.2
    	
 
    	
Purposes of the   Plan
    	
 
    	
1
    
	
1.3
    	
 
    	
Term
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE II
    	
 
    	
DEFINITIONS
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.1
    	
 
    	
“Affiliate”
    	
 
    	
1
    
	
2.2
    	
 
    	
“Award Agreement”
    	
 
    	
1
    
	
2.3
    	
 
    	
“Award”
    	
 
    	
1
    
	
2.4
    	
 
    	
“Beneficiary”
    	
 
    	
2
    
	
2.5
    	
 
    	
“Board of   Directors” or “Board”
    	
 
    	
2
    
	
2.6
    	
 
    	
“Cause”
    	
 
    	
2
    
	
2.7
    	
 
    	
“Change in   Control”
    	
 
    	
2
    
	
2.8
    	
 
    	
“Code”
    	
 
    	
4
    
	
2.9
    	
 
    	
“Committee”
    	
 
    	
4
    
	
2.10
    	
 
    	
“Company”
    	
 
    	
4
    
	
2.11
    	
 
    	
“Disability”
    	
 
    	
4
    
	
2.12
    	
 
    	
“Effective Date”
    	
 
    	
4
    
	
2.13
    	
 
    	
“Fair Market   Value”
    	
 
    	
4
    
	
2.14
    	
 
    	
“Grant Date”
    	
 
    	
4
    
	
2.15
    	
 
    	
“Grant Price”
    	
 
    	
4
    
	
2.16
    	
 
    	
“Membership   Units”
    	
 
    	
4
    
	
2.17
    	
 
    	
“Participant”
    	
 
    	
4
    
	
2.18
    	
 
    	
“Performance   Goals”
    	
 
    	
5
    
	
2.19
    	
 
    	
“Performance   Measure”
    	
 
    	
5
    
	
2.20
    	
 
    	
“Performance   Period”
    	
 
    	
5
    
	
2.21
    	
 
    	
“Performance   Share Unit” (or “PSU”)
    	
 
    	
5
    
	
2.22
    	
 
    	
“Performance   Share Unit Award”
    	
 
    	
5
    
	
2.23
    	
 
    	
“Plan”
    	
 
    	
5
    
	
2.24
    	
 
    	
“Termination of   Employment”
    	
 
    	
5
    
	
2.25
    	
 
    	
“Units”
    	
 
    	
5
    
	
2.26
    	
 
    	
“Vested”
    	
 
    	
6
    
	
2.27
    	
 
    	
“Vesting Date”
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE III
    	
 
    	
ADMINISTRATION
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.1
    	
 
    	
Committee   Structure
    	
 
    	
6
    
	
3.2
    	
 
    	
Committee Actions
    	
 
    	
6
    
	
3.3
    	
 
    	
Committee   Authority
    	
 
    	
6
    
	
3.4
    	
 
    	
Committee   Determinations and Decisions
    	
 
    	
8
    
	
3.5
    	
 
    	
Board Authority
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IV
    	
 
    	
PERFORMANCE SHARE UNITS   SUBJECT TO PLAN
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.1
    	
 
    	
Number of   Performance Share Units
    	
 
    	
8
    
	
4.2
    	
 
    	
Release of   Performance Share Units
    	
 
    	
8
    
	
4.3
    	
 
    	
Participant   Rights
    	
 
    	
8
    
	
4.4
    	
 
    	
Effect of Certain   Changes
    	
 
    	
8
    
	
4.5
    	
 
    	
Value of   Performance Share Units
    	
 
    	
9
    
	
4.6
    	
 
    	
CEO Performance   Share Units
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE V
    	
 
    	
ELIGIBILITY
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VI
    	
 
    	
PERFORMANCE SHARE UNIT   AWARDS
    	
 
    	
9
    

 

i

 

TABLE OF CONTENTS

(CONTINUED)

 

	
 
    	
 
    	
 
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
6.1.
    	
 
    	
General
    	
 
    	
9
    
	
6.2.
    	
 
    	
Earning   Performance Share Unit Awards
    	
 
    	
10
    
	
6.3.
    	
 
    	
Termination of   Employment
    	
 
    	
10
    
	
6.4.
    	
 
    	
Non-transferability
    	
 
    	
11
    
	
6.5
    	
 
    	
Forfeiture and   Clawback of PSU Rights and Payments
    	
 
    	
12
    
	
6.6
    	
 
    	
Dissolution
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VII
    	
 
    	
CHANGE OF CONTROL   PROVISIONS
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VIII
    	
 
    	
PROVISIONS APPLICABLE TO   UNITS ACQUIRED UNDER THIS PLAN
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IX
    	
 
    	
MISCELLANEOUS
    	
 
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
9.1
    	
 
    	
Amendments and   Termination
    	
 
    	
13
    
	
9.2
    	
 
    	
Unfunded Status   of Plan
    	
 
    	
13
    
	
9.3
    	
 
    	
Withholding
    	
 
    	
13
    
	
9.4
    	
 
    	
Governing Law;   Construction; Venue; Jury-Trial Waiver
    	
 
    	
13
    
	
9.5
    	
 
    	
Nontransferability;   Beneficiaries
    	
 
    	
13
    
	
9.6
    	
 
    	
No Effect on   Employment Relationship
    	
 
    	
14
    
	
9.7
    	
 
    	
Indemnification
    	
 
    	
14
    
	
9.8
    	
 
    	
Severability
    	
 
    	
14
    
	
9.9
    	
 
    	
Successors and   Assigns
    	
 
    	
14
    
	
9.10
    	
 
    	
Entire Agreement
    	
 
    	
14
    
	
9.11
    	
 
    	
Code   Section 409A
    	
 
    	
15
    
	
9.12
    	
 
    	
Gender and Number
    	
 
    	
15
    
	
9.13
    	
 
    	
Headings
    	
 
    	
15
    

 

ii

 

ARTICLE I
  ESTABLISHMENT, PURPOSE AND TERM

 

1.1                              Establishment

 

PH Holding LLC (“Company”) originally established the PH Holding LLC 2011 Woodside Share Unit Plan to be effective as of January 1, 2011. The Company now hereby amends and restates the PH Holding LLC 2011 Woodside Share Unit Plan with a restated effective date of May 30, 2012 (the restated effective date will not affect the original effective date of the original plan) and further amends the name of such plan to the “PH Holding LLC Woodside Share Unit Plan” (the “Plan”).

 

1.2                               Purposes of the Plan

 

The Company intends for the Plan to foster and promote the long-term financial success of the Company by motivating performance through incentive compensation. The Plan also is intended to attract and retain talent and enable Participants to participate in the long-term growth and financial success of the Company.

 

1.3                               Term

 

The Plan is intended to survive for the ten (10) year period beginning on January 1, 2011.  Additional Awards shall be made after the expiration of the term, but outstanding awards shall be administered in accordance with the provisions thereof. The Plan shall continue in effect until all matters relating to the settlement of Awards and administration of the Plan have been completed.

 

ARTICLE II
  DEFINITIONS

 

For purposes of the Plan, the following terms and phrases shall have the definitions as set forth below:

 

2.1                               “Affiliate” means any individual, corporation, partnership, association, limited liability company, trust, unincorporated association or other entity with whom the Company would be considered a single employer under Section 414(b) or (c) of the Code.

 

2.2                               “Award Agreement” means any agreement entered into pursuant to the Plan by which an Award is granted to a Participant.

 

2.3                               “Award” means any Performance Share Unit Award granted to a Participant under the Plan. Awards shall be subject to the terms and conditions of the Plan and shall be evidenced by an Award Agreement containing such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall deem desirable.  Performance Share Unit Awards may be subject to Performance Goals which shall be established by the Committee. Notwithstanding the foregoing, the Committee shall have discretion to define Change in Control in the Award Agreement in a manner the Committee determines to be desirable and more restrictive than the definition of Change

 

1

 

in Control set forth in this Plan document. By way of example and not limitation, an Award Agreement may set forth a definition of Change in Control that is limited to any of the subsections under Section 2.7 of this Plan or may specifically exclude a specific transaction or the effects thereof from the definition of Change in Control.

 

2.4                               “Beneficiary” means any person or other entity which has been designated by a Participant in his or her most recent written beneficiary designation filed with the Committee to receive the compensation specified under the Plan to the extent permitted. If there is no designated beneficiary, then the term means any person or other entity entitled by will or the laws of descent and distribution to receive such compensation.

 

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

 

2.6                               “Cause” means, unless otherwise specifically provided in an Award Agreement:

 

(a)                                 a Participant’s willful failure or willful refusal to perform any material portion or aspect of his duties under any agreement entered into between the Participant and the Company or an Affiliate;

 

(b)                                 a Participant’s willful failure or willful refusal to follow directions of the Board of Directors or any other act of material, willful insubordination on the part of the Participant;

 

(c)                                  the engaging by a Participant in willful misconduct which is materially and demonstrably injurious to the Company or an Affiliate;

 

(d)                                 the commission by a Participant of an act of fraud or embezzlement;

 

(e)                                  any conviction of, or plea of guilty or nolo contendere to, a Participant with respect to a felony (other than a traffic violation involving no injury to another); or

 

(f)                                   any act of fraud or dishonesty committed by a Participant which is materially detrimental to the business or reputation of the Company or an Affiliate.

 

2.7                               “Change in Control” shall be deemed to have occurred upon any of the following events:

 

(a)                                 The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of greater than 50% during the 12-month period ending on the date of the most recent acquisition by such Person of either (i) the then-outstanding Membership Units, including any Units issued in addition to the original 9,500,000 Class A and Class B Units(the “Outstanding Company Units”) or (ii) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation or other entity controlled by the

 

2

 

Company, or (iv) any acquisition by any corporation or other entity pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 2.7; or

 

(b)                                 a majority of members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election; or

 

(c)                                  Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Membership Units and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock (or other applicable equity interest) and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation or other entity resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Membership Units and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation or other entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation or other entity resulting from such Business Combination) beneficially owns, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock (or other applicable equity interest) of the corporation (or other entity) resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such corporation (or other entity) except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Board as of January 1, 2011 (the “Incumbent Board”), or of the action of the Board, providing for such Business Combination.

 

Notwithstanding the foregoing or anything herein to the contrary, and except as otherwise set forth in any Award Agreement to comply with Code Section 409A, the definition of Change in Control shall specifically exclude any change in ownership or voting power resulting solely from the issuance of new equity units by PH Holding LLC  as part of a recapitalization transaction that occurs on or before December 31, 2013 (the “New Unit Transaction”) and shall specifically exclude a change in the membership of the Board that results solely from the New Unit Transaction; provided however, after the consummation of the New Unit Transaction, any subsequent changes to the ownership, voting control, and membership of the Board shall be included in the determination of a Change in Control.  It is expressly intended that any changes in the composition of the Board that is the direct effect of the New Unit Transaction not be taken into account when determining whether there has been a Change in Control under this Plan.

 

3

 

2.8                               “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto.

 

2.9                               “Committee” means the Compensation Committee of the Board unless otherwise determined by the Board.  If no committee shall be appointed, the Board shall be the Committee.

 

2.10                        “Company” means PH Holding LLC, a Delaware limited liability company. Wherever the context of the Plan so admits or requires, “Company” also means “Affiliate.”

 

2.11                        “Disability” means and shall be deemed to have occurred if, despite any reasonable accommodation required by law, (i) a Participant has been determined under the Company’s or an Affiliate’s long-term disability plan to be eligible for long-term disability benefits or (ii) in the absence of a Participant’s participation in, application for benefits under, or existence of such a plan, a Participant’s inability to perform the essential functions of his or her position because of an illness or injury for (X) a period of 180 consecutive days or (Y) an aggregate of 180 days within any period of 12 consecutive months.

 

2.12                        “Effective Date” means May 30, 2012, whereas the original effective date was January 1, 2011 (the restated effective date will not affect the original effective date of the original plan).

 

2.13                        “Fair Market Value” means the amount determined by dividing the book value of the Company as of a stated determination date by the total Membership Units of the Company of 9.5 million (9,500,000). The “book value” of the Company for this purpose shall be determined at the end of the last preceding calendar quarter as stockholder’s equity less any convertible or preferred stock or other equity, as determined in good faith by the Committee in its sole discretion using generally accepted accounting principles; provided, however, that in determining the Fair Market Value of a Unit upon a Change of Control, the Committee may use such measure of the “book value” of the Company as it shall determine in its sole discretion and in good faith to be appropriate to reflect the total value of the Company in connection with such Change of Control event. In addition, for purposes of a Change of Control, if the Company is acquired as the result of a multiple of book value (i.e., 3x book value) said multiple shall be proformed in determining the Fair Market Value of a Unit. Book value would also be increased for any cash dividends paid.

 

2.14                        “Grant Date” means the date as of which an Award is granted pursuant to the Plan.

 

2.15                       “Grant Price” means the price stated as the “Grant Price” in an Award Agreement, and which shall be equal to the Fair Market Value of a Unit as of the Grant Date.

 

2.16                        “Membership Units” means the Class A and Class B membership units of the Company in the amount of 9,500,000 units, as such units may be classified, reclassified, converted or exchanged by reorganization, merger, conversion or otherwise, and shall not include the Class C membership units.

 

2.17                        “Participant” means a person who satisfies the eligibility conditions of Article V and to whom an Award has been granted by the Committee under the Plan.

 

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2.18                        “Performance Goals” mean the level of performance established by the Committee as the Performance Goal with respect to a Performance Measure. Performance Goals may vary from Performance Period to Performance Period and from Participant to Participant and may be established on a stand-alone basis, in tandem or in the alternative.

 

2.19                        “Performance Measure” means any performance measure selected by the Committee using such criteria as it shall determine, for purpose of Awards of Performance Share Units. Any such performance criterion or combination of such criteria may apply to a Participant’s Award opportunity in its entirety or to any designated portion or portions of the Award opportunity, as the Committee may specify. Performance Measures may vary from Performance Period to Performance Period and from Participant to Participant.

 

2.20                        “Performance Period” means the time period during which a Performance Share Unit Award shall be earned, as designated in the Award Agreement prescribed by the Committee. Unless otherwise stated in an Award Agreement, the Performance Period shall be at least three (3) full calendar years beginning on the Grant Date.

 

2.21                        “Performance Share Unit” (or “PSU”) means a right granted pursuant to the terms and conditions established by the Committee and which is described in Section 6.1.  Each Performance Share Unit shall equal one of the Membership Units of the original 9.5 million Membership Units of the Company, provided that the value of each Performance Share Unit shall be determined by Article IV of the Plan and the Award Agreement.

 

2.22                        “Performance Share Unit Award” means an Award consisting of Performance Share Units described in Article VI that may be dependent upon the achievement of Performance Goals.

 

2.23                        “Plan” means the PH Holding LLC Woodside Share Unit Plan, as herein set forth and as may be amended from time to time.  Prior to the Effective Date, the Plan was named the “PH Holding LLC 2011 Woodside Share Unit Plan”.

 

2.24                        “Termination of Employment” means the occurrence of any act or event whether pursuant to an employment agreement or otherwise that actually or effectively causes or results in the person’s ceasing, for whatever reason, to be employee of the Company or of any Affiliate, including, without limitation, death, Disability, dismissal, severance at the election of the Participant, or severance as a result of the discontinuance, liquidation, sale or transfer by the Company or its Affiliates of a business owned or operated by the Company or its Affiliates. With respect to any non-employee member of the Board, Termination of Employment means the termination of a Participant’s status as a non-employee director of the Board. With respect to any other person who is not an employee with respect to the Company or an Affiliate, the Award Agreement shall establish what act or event shall constitute a Termination of Employment for purposes of the Plan. A Termination of Employment shall occur with respect to an employee who is employed by an Affiliate if the Affiliate shall cease to be an Affiliate and the Participant shall not immediately thereafter become an employee of the Company or an Affiliate.

 

2.25                        “Units” means whole units of the Company used for purposes of determining the amount owed to a Participant pursuant to the Plan.

 

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2.26                        “Vested”, unless otherwise specifically provided in an Award Agreement or determined by the Committee and/or subject to Section 6.3 , shall mean the Participant vests one-third (1/3) for each completed year of service from Grant Date.

 

2.27                        “Vesting Date” means the date or dates as of which a Performance Share Unit Award or portion thereof vests in accordance with this Plan or an Award Agreement.

 

In addition, certain other terms used herein have definitions given to them in the first place in which they are used.

 

ARTICLE III
  ADMINISTRATION

 

3.1                               Committee Structure

 

The Plan shall be administered by the Committee. A majority of the Committee shall constitute a quorum at any meeting thereof (including telephone conference) and the acts of a majority of the members present, or acts approved in writing by the entire Committee without a meeting, shall be the acts of the Committee for purposes of this Plan. Any member of the Committee may resign upon notice to the Board. The Board shall have the authority to remove, replace or fill any vacancy of any member of the Committee upon notice to the Committee and the affected member.  The Committee may not change the timing and form of payment of any distribution as provided under the Plan without Board approval.

 

3.2                               Committee Actions

 

The Committee may authorize any one or more of its members or an officer of the Company to execute and deliver documents on behalf of the Committee. The Committee may allocate among one or more of its members, or may delegate to one or more of its agents, such duties and responsibilities as it determines, provided that the Committee shall not delegate the authority to grant Awards. A member of the Committee shall be recused from Committee action regarding an Award granted or to be granted to such member.

 

3.3                               Committee Authority

 

Subject to applicable law and other terms of the Plan, the Committee shall have the authority:

 

(a)                                 to select those persons to whom Awards may be granted from time to time;

 

(b)                                 to determine whether and to what extent Awards are to be granted hereunder;

 

(c)                                  to determine the number of Performance Share Units to be covered by each Award granted hereunder;

 

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(d)                                 to determine the terms and conditions of any Award granted hereunder (including any provisions deemed necessary or appropriate by the Committee in good faith for an Award to avoid being subject to taxation under Code Section 409A(a)(1));

 

(e)                                  to adjust the terms and conditions, at any time or from time to time, of any Award, subject to the limitations contained elsewhere herein, including but not limited to Article VIII, provided that no change may be made to the form and timing of payment once an Award has been made;

 

(f)                                   to determine to what extent and under what circumstances Performance Share Units and other amounts payable with respect to an Award shall be deferred, subject to compliance in good faith with the requirements of the Plan and the Code, provided that no change may be made to the form and timing of payment once an Award has been made;

 

(g)                                  to provide for the forms of Award Agreement to be utilized in connection with this Plan;

 

(h)                                 to determine what legal requirements are applicable to the Plan and Awards, and to require of a Participant that appropriate action be taken with respect to such requirements;

 

(i)                                     to cancel, with the consent of the Participant or as otherwise provided in the Plan or an Award Agreement, outstanding Awards;

 

(j)                                    to determine whether and with what effect an individual has incurred a Termination of Employment;

 

(k)                                 to determine the restrictions or limitations on the Award;

 

(l)                                     to determine whether an Award is to be adjusted, modified or purchased, or is to become fully or partially exercisable, under the Plan or the terms of an Award Agreement;

 

(m)                             to determine the permissible methods of Award payment within the terms and conditions of the Plan and the particular Award Agreement;

 

(n)                                 to adopt, amend and rescind such rules and regulations as, in its opinion, may be advisable in the administration of this Plan;

 

(o)                                 to appoint and compensate agents, counsel, auditors or other specialists to aid it in the discharge of its duties; and

 

(p)                                 to make all other determinations which may be necessary or advisable for the administration of the Plan.

 

The Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall, from time to time, deem advisable, to interpret the terms and provisions of the Plan and any Award issued under the Plan (and any Award Agreement) and to otherwise supervise the administration of the Plan. The Committee’s policies and procedures may differ with respect to Awards granted  at different times and may differ with respect to a Participant from time to time, or with respect to different Participants at the same or different times.

 

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3.4                               Committee Determinations and Decisions

 

Any determination made by the Committee pursuant to the provisions of the Plan shall be made in its sole discretion. All decisions made by the Committee pursuant to the provisions of the Plan shall be final and binding on all persons, including the Company and Participants. Any determination shall not be subject to de novo review if challenged in court. Neither the Committee (including any member thereof) nor the Company shall have any liability to any Participant for any matter it determined in good faith as being in compliance with this Plan and the Code even if such determination was later proved incorrect.

 

3.5                               Board Authority

 

All duties, responsibilities and authority granted to the Committee pursuant to the Plan shall also extend to the Board, unless specifically delegated to the Committee, and all references to the “Committee” in this Plan shall be deemed to also include the Board.

 

ARTICLE IV
  PERFORMANCE SHARE UNITS SUBJECT TO PLAN

 

4.1                               Number of Performance Share Units

 

Subject to the adjustment under Section 4.4, the total number of Performance Share Units reserved and available for distribution pursuant to Awards under the Plan shall be equal to  ten percent (10%) of the total Membership Units of the Company of 9.5 million (9,500,000) , subject to Section 4.4.

 

4.2                               Release of Performance Share Units

 

Subject to Section 4.1, the Committee shall have full authority to determine the number of Performance Share Units available for Awards. In its discretion the Committee may include (without limitation), as available for distribution, Performance Share Units subject to any Award that have been previously forfeited.

 

4.3                               Participant Rights

 

No person shall have any rights as a holder of common stock or voting security of the Company on account of any Award granted under this Plan.

 

4.4                               Effect of Certain Changes

 

In the event of any recapitalization or other change in the capital structure of the Company, reorganization, a partial or complete liquidation, or any other transaction or event involving the Company and having an effect similar to any of the foregoing, then the Committee shall make appropriate adjustments or substitutions relating, as applicable, to the number of Performance Share Units available for Awards under the  Plan, the number of Performance Share Units covered by outstanding Awards, and any other characteristics or terms of the Awards as the Committee may deem necessary or appropriate to reflect equitably the effects of such changes to the Participants.

 

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4.5                               Value of Performance Share Units

 

Unless expressly provided otherwise in an Award Agreement, the total amount to be paid to the Participant for each vested Performance Share Unit shall be equal to:

 

(a)                                 The Fair Market Value of one of the Membership Units of the Company as of the end of the last calendar quarter preceding the event under Article VI or VII of the Plan causing an amount to be payable (including but not limited to an involuntary termination without cause, a Change in Control, or a First Distribution),

 

less

 

(b)                                 The Grant Price of the Performance Share Unit as set forth in the Award Agreement.

 

4.6                               CEO Performance Share Units

 

Pursuant to the letter agreement between the Company and Joel Shine, dated January 1, 2010, Mr. Shine is intended to receive an equity interest in the Company (the “Shine Incentive”).  The Plan is intended to fulfill the requirements of the Shine Incentive by granting certain Performance Share Units to Mr. Shine pursuant to separate Award Agreement (the “Shine Incentive PSUs”).  The value of the Shine Incentive PSUs shall be defined by the Award Agreement and not by Section 4.5 of the Plan.

 

ARTICLE V
  ELIGIBILITY

 

Except as herein provided, the persons who shall be eligible to participate in the Plan and be granted Awards shall be those persons who are lawful employees of, or consultants or advisors to, the Company or any Affiliates, or non-employee members of the Board of Directors. Of those persons described in the preceding sentence, the Committee may, from time to time, select persons to be granted Awards and shall determine the terms and conditions with respect thereto. In making any such selection and in determining the form of the Award, the Committee shall give consideration to such factors deemed appropriate by the Committee.

 

ARTICLE VI
  PERFORMANCE SHARE UNIT AWARDS

 

6.1.                            General

 

The Committee shall have authority to grant Performance Share Unit Awards under the Plan at any time or from time to time. A Performance Share Unit consists of the right to receive cash, as provided in the particular Award Agreement, upon achievement of certain Performance Goals, if any, and may be awarded either alone or in addition to other Awards granted under the Plan. Performance Share Units shall be denominated in units of value. Subject to the terms of the Plan, the Committee shall have complete discretion to determine the number of Performance Share Units, if any, granted to a Participant. Each Performance Share Unit Award shall be evidenced by, and be subject to the terms of, an Award Agreement which will become effective upon execution by the Participant.

 

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6.2.                            Earning Performance Share Unit Awards

 

After the applicable Performance Period shall have ended, the Committee shall determine the extent to which the established Performance Goals, if any, have been achieved.

 

6.3.                            Termination of Employment

 

Unless otherwise specifically provided in an Award Agreement or determined by the Committee, if a Participant’s employment or service is voluntarily terminated by the Participant (other than through death or Disability or hardship, see Section 6.3 (a) below), or is terminated by the Company (other than termination due to a Change in Control of the Company as described in Section 6.3(b), without Cause  as described in Section 6.3(c), or for Cause as described in Section 6.3(d)), then any Performance Share Unit Awards previously granted to the Participant under the Plan which remain unvested shall automatically lapse and be forfeited at the close of business on the date of such Participant’s Termination of Employment.

 

(a)                                 Termination of Employment Due to Death or Disability or Hardship. In the event of a Termination of Employment due to death or to Disability or hardship (“Hardship”, as determined by a majority vote of the Committee in its sole discretion) or Change of Control, during a Performance Period, the Participant shall receive a pro rata share of the Performance Share Unit Awards relating to such Performance Period based upon the period of time he or she is employed by the Company in the Performance Period, with vesting continuing through the end of the current year.

 

(b)                                 Change of Control. A Termination of Employment due to a Change of Control of the Company shall be governed by Article VII.

 

(c)                                  Involuntary Termination without Cause. If a Participant’s Termination of Employment is voluntarily terminated by the Company without Cause: (i) that portion of any Performance Share Unit Awards that has not Vested on or prior to such date of termination shall automatically lapse and be forfeited at the close of business on the date of such Participant’s Termination of Employment , and (ii) all Vested Performance Share Unit Awards previously granted to the Participant under the Plan shall be payable at the Fair Market Value as of the end of the last calendar quarter preceding the date of the Participant’s Termination of Employment.

 

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(d)                                 Termination for Cause. If a Participant’s Termination of Employment is voluntarily terminated by the Company for Cause: (i) that portion of any Performance Share Unit Awards that has not Vested on or prior to such date of termination shall automatically lapse and be forfeited at the close of business on the date of such Participant’s Termination of Employment and (ii) any Vested Performance Share Unit Awards previously granted to the Participant under the Plan shall automatically lapse and be forfeited at the close of business on the date of such Participant’s Termination of Employment.

 

(e)                                  Voluntary Termination.  If a Participant’s Termination of Employment is voluntarily terminated by the Participant, (i) that portion of any Performance Share Unit Awards that has not Vested on or prior to such date of termination shall automatically lapse and be forfeited at the close of business on the date of such Participant’s Termination of Employment and (ii) all Vested Performance Share Unit Awards previously granted to the Participant under the Plan shall be valued at the Fair Market Value as of the end of the last calendar quarter preceding the date of the Participant’s Termination of Employment, and the timing and amount of payment shall be governed by subsection (e) below.

 

(f)                                   Distribution of Vested Performance Share Unit Awards. The distribution of the Fair Market Value of the Vested Performance Share Units shall be made pursuant to the following schedule, provided that all of the Participant’s PSUs are fully Vested and earned under an Award Agreement, and subject to terms of the Plan and the applicable Award Agreement:

 

(i)                                     fifty percent (50%) of the Fair Market Value (as of the end of the most recent calendar quarter preceding the Vesting Date) of the fully Vested PSUs shall be distributed within ninety (90) days after all of the PSUs under an Award Agreement have reached the Vesting Date (the “First Distribution”).  The First Distribution shall reduce the number of the Participant’s Vested PSUs by the number of PSUs necessary to satisfy the Participant’s First Distribution.  The Shine Incentive PSUs shall not be eligible for a First Distribution.

 

(ii)                                  a Participant’s remaining Vested PSUs shall be distributed within ninety (90) days after an event described in Article VI or Article VII of the Plan that permits such distribution (the “Second Distribution”).  The Fair Market Value of the Vested PSUs for the Second Distribution shall be determined as of the end of the last calendar quarter preceding the event under Article VI or VII of the Plan causing an amount to be payable or as otherwise required by the Plan.  The Shine Incentive PSUs shall be paid pursuant to Article VI and VII, and as further described in the applicable Award Agreement.

 

6.4.                            Non-transferability

 

Performance Share Unit Awards may not be sold, assigned, margined, transferred, encumbered, conveyed, gifted, alienated, hypothecated, pledged, or otherwise disposed of.

 

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6.5                               Forfeiture and Clawback of PSU Rights and Payments

 

If the Participant breaches any noncompetition, confidentiality, nonsolicitation, noninterference, or nondisclosure agreement, or other agreement that may apply to the Participant, then, unless the Award Agreement or such other agreement otherwise provides:

 

(a)                                 all unvested and vested PSU rights will terminate and be forfeited; and

 

(b)                                 the Participant will be required to immediately repay all PSU payments previously made to such Participant.

 

Such forfeiture and clawback shall be in addition to any other right the Company may have with respect to any such violation or breach. The Company may undertake any legal action to collect and recover the amount of any such required repayment.

 

6.6                               Dissolution

 

Distributions will be permitted if the Plan is terminated within twelve (12) months of a corporate dissolution taxed under Internal Revenue Code Section 331, subject to any requirements of Code Section 409A and regulations promulgated thereunder.

 

ARTICLE VII
  CHANGE OF CONTROL PROVISIONS

 

Notwithstanding any other provision of the Plan to the contrary and unless otherwise specifically provided in an Award Agreement, in the event of a Change of Control of the Company, any Performance Goal or other condition with respect to any Performance Share Units shall be deemed to have been satisfied in full, and such Award shall be fully vested and distributable upon the date of the Change of Control of the Company, and shall be paid within ninety (90) days after such event.

 

ARTICLE VIII
  PROVISIONS APPLICABLE TO UNITS ACQUIRED UNDER THIS PLAN

 

Except to the extent specifically required by applicable securities laws, none of the Company, an Affiliate or the Committee shall have any duty or obligation to affirmatively disclose material information to a record or beneficial holder of common stock or an Award, and such holder shall have no right to be advised of any material information regarding the Company or any Affiliate at any time prior to, upon, or in connection with receipt or the exercise or distribution of an Award. The Company makes no representation or warranty as to the future value of the Performance Share Units awarded in accordance with the provisions of the Plan.

 

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ARTICLE IX
  MISCELLANEOUS

 

9.1                               Amendments and Termination

 

The Board may amend, alter, or discontinue the Plan at any time, but no amendment, alteration or discontinuation shall be made which would materially impair the rights of a Participant under an Award theretofore granted without the Participant’s consent. Notwithstanding the immediately preceding sentence, an amendment may be made without a Participant’s consent to cause the Plan or an Award to comply with applicable law (including, but not limited to, any changes needed to avoid taxation of an Award as a “nonqualified deferred compensation plan” under Code Section 409A). The Committee may amend, alter or discontinue the terms of any Award theretofore granted, prospectively or retroactively, on the same conditions and limitations (and exceptions to limitations) as apply to the Board, and further subject to any approval or limitations the Board may impose.

 

9.2                               Unfunded Status of Plan

 

It is intended that the Plan be an “unfunded” plan for incentive compensation. The Company may create trusts or other arrangements to meet the obligations created under the Plan to deliver Performance Share Units or make payments; provided, however, that the existence of such trusts or other arrangements is consistent with the “unfunded” status of the Plan and all property held thereunder and income thereon shall remain solely the property and rights of the Company (without being restricted to satisfying the obligations created under the Plan) and shall be subject to the claims of the Company’s general creditors. The Company’s obligations created under the Plan shall constitute a general, unsecured obligation, payable solely out of its general assets.

 

9.3                               Withholding

 

Any payment to be made under this Plan or an Award Agreement shall be subject to the withholding of such amount therefrom as may be required to comply with any applicable federal, state or other law. Participants shall bear all taxes on amounts due under the Plan or an Award Agreement to the extent no taxes or insufficient taxes are withheld, irrespective of whether withholding is required.

 

9.4                               Governing Law; Construction; Venue; Jury-Trial Waiver

 

This Plan and any Award Agreement shall be governed by and construed and enforced in accordance with Utah law, excluding its choice-of-law principles, except where federal law may preempt the application of state law. The Company and a Participant, by accepting an Award, mutually agree to (i) submit and consent to the exclusive jurisdiction, including removal jurisdiction, of the state and federal courts located in Salt Lake County, Utah (or the county where the Company’s principal executive offices are located if different) for any action or proceeding relating to this Plan or an Award Agreement; (ii) waive any objection to such venue; (iii) agree that any judgment in any such action or proceeding may be enforced in other jurisdictions; and (iv) irrevocably waive the right to trial by jury and agree not to ask for a jury in any such proceeding.

 

9.5                               Nontransferability; Beneficiaries

 

No Award shall be assignable or transferable by the Participant. No Award shall be subject to the debts of a Participant or Beneficiary or subject to attachment or execution or process in any court action or proceeding unless otherwise provided in this Plan. If a deceased Participant has named no Beneficiary, any Award held by the Participant at the  time of death shall be transferred as provided in his or her will or by the laws of descent and distribution.

 

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9.6                               No Effect on Employment Relationship

 

Nothing contained herein shall be deemed to alter the relationship between the Company or an Affiliate and a Participant, or the contractual relationship between a Participant and the Company or an Affiliate if there is a written contract regarding such relationship. Nothing contained herein shall be construed to constitute a contract of employment between the Company or an Affiliate and a Participant or any guaranty of employment or continued employment. The Company or an Affiliate and each of the Participants continue to have the right to terminate the employment or service relationship at any time for any reason, except as provided in a written contract. The Company or an Affiliate shall have no obligation to retain the Participant in its employ or service as a result of this Plan. There shall be no inference as to the length of employment or service hereby, and the Company or an Affiliate reserves the same rights to terminate the Participant’s employment or service as existed prior to the individual becoming a Participant in this Plan.

 

9.7                               Indemnification

 

Indemnification of members of the Committee and the Board with respect to any action taken or failure to act under the Plan or any Award Agreement shall be determined under the Company’s bylaws. The foregoing rights of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under contract, as a matter of law or otherwise, or under any power that the Company may have to indemnify them or hold them harmless.

 

9.8                               Severability

 

If any provision of this Plan shall for any reason be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereby, and this Plan shall be construed as if such invalid or unenforceable provision were omitted.

 

9.9                               Successors and Assigns

 

This Plan shall inure to the benefit of and be binding upon each successor and assign of the Company. All obligations imposed upon a Participant, and all rights granted to the Company hereunder, shall be binding upon the Participant’s heirs, legal representatives and successors.

 

9.10                        Entire Agreement

 

This Plan and the Award Agreement constitute the entire agreement with respect to the subject matter hereof and thereof, provided that in the event of any inconsistency between the Plan and the Award Agreement, the terms and conditions of this Plan shall control.

 

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9.11                        Code Section 409A

 

This Plan, including the Awards and Award Agreements, is intended to comply with Code Section 409A in its entirety and shall be interpreted in such a manner that is consistent with Code Section 409A, including all applicable regulations and guidance issued thereunder. However, to the extent that a payment or a particular provision hereunder (including under an Award Agreement) meets an exception to Code Section 409A, then such payment and/or provision shall be interpreted and administered in such a manner as to comply with the requirements under Code Section 409A for meeting the applicable exception.  Notwithstanding the preceding, no persons connected with this Plan or the Award Agreements in any capacity, including but not limited to the Company and its Affiliates, and their respective directors, officers, agents and employees, makes any representation, commitment or guarantee that any tax treatment, including but not limited to, federal, state and local income, estate and gift tax treatment, will be applicable with respect to any amounts payable under the Plan or the Award Agreements or that such tax treatment will apply to a Participant.

 

9.12                        Gender and Number

 

Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural.

 

9.13                        Headings

 

The headings contained in this Plan are for reference purposes only and shall not affect the meaning or interpretation of this Plan.

 

IN WITNESS WHEREOF, this Plan has been amended and restated as of this 30th day of May, 2012.

 

	
PH   Holding LLC
    	
 
    
	
 
    	
 
    
	
By: 
    	
/s/   David Barclay
    	
 
    
	
 
    	
 
    
	
Title:   Compensation Committee Chair
    	
 
    
			

 

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