Document:

eex-ex44_883.htm

 

Exhibit 4.4

DESCRIPTION OF THE REGISTRANT’S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

The following is a description of the material terms of our capital stock. You are strongly encouraged, however, to read our amended and restated certificate of incorporation (as amended from time to time, our “Certificate of Incorporation”), [Second] Amended and Restated Bylaws (as amended from time to time, our “Bylaws”), and the Certificate of Designations (the “Certificate of Designations”) for our 7% Series A Convertible Participating Preferred Stock. The following is only a summary and is qualified by applicable law and by the provisions of our Certificate of Incorporation, Bylaws and such Certificate of Designations.

General

Our authorized capital stock consists of 800,000,000 shares of common stock, par value $0.01 per share and 80,000,000 shares of preferred stock, par value $0.01 per share, of which [71,446,346] have been designated 7% Series A Convertible Participating Preferred Stock (the “Series A Preferred Stock”).  

As of February [          ], 2021, [              ] shares of common stock and [71,446,346] shares of our Series A Preferred Stock were outstanding.

Our Controlling Stockholder

As of February [          ], 2021, certain investment funds managed by an affiliate of Onex Corporation (such funds, collectively, “Onex”) owned [47,058,332] shares of our common stock, representing [65.8%] of our outstanding common stock. In addition, as of February [             ], 2021, Onex owned [69,718,919] shares of our Series A Preferred Stock, representing [             ] shares of our common stock on an as-converted basis, after accounting for the accumulated paid-in-kind accreting return at a rate per annum equal to 7% on the accreted liquidation preference . Onex’s beneficial ownership of our common stock, on an as-converted basis, is approximately [85.3%.] Accordingly, Onex exercises a controlling influence over our business and affairs and has the power to determine all matters submitted to a vote of our stockholders, including the election of directors, the removal of directors with or without cause, and the approval of significant corporate transactions such as amendments to our Certificate of Incorporation, mergers, and the sale of all or substantially all of our assets. Onex could initiate corporate action even if its interests conflict with the interests of our other stockholders. This concentration of voting power could deter or prevent a change in control of us that might otherwise be beneficial to our stockholders.

Common Stock

Listing. Our common stock, par value $0.01 per share, is registered under Section 12 of the Securities Exchange Act of 1934, as amended, and listed on the New York Stock Exchange under the symbol “EEX.”

 

 

Voting Rights. Each outstanding share of common stock is entitled to one vote on all matters with respect to which the holders of our common stock are entitled to vote. See also “--7% Series A Convertible Participating Preferred Stock -- Voting and Director Designation Rights.”

Dividend Rights. Subject to preferences that may apply to shares of preferred stock, including the Series A Preferred Stock, outstanding at the time, holders of our outstanding common stock are entitled to any dividend declared by the board of directors out of funds legally available for this purpose. However, provisions of the agreements governing our indebtedness from time to time may impose restrictions on our ability to declare dividends on our common stock.

Conversion Rights. The common stock is not convertible.

Other Rights. The holders of our common stock will not have any preemptive or other similar rights to purchase any of our securities, cumulative voting, subscription, redemption or sinking fund rights.

Right to Receive Liquidation Distributions. Upon our voluntary or involuntary liquidation, dissolution or winding up, the holders of our common stock are entitled to receive, on a pro rata basis, our assets which are legally available for distribution, after payment of all debts and other liabilities and subject to the rights of any holders of preferred stock then outstanding (including the Series A Preferred Stock), to the holders of common stock.

Assessability. All shares of common stock outstanding are fully paid and nonassessable.

Preferred Stock

We have 80,000,000 shares of preferred stock, $0.01 par value, authorized, of which we have designated [71,446,346] shares of Series A Preferred Stock ([all] of which are outstanding). Any then-outstanding shares of preferred stock, including the Series A Preferred Stock, will have priority over the common stock with respect to dividends and other distributions, including the distribution of our assets upon liquidation. Unless required by law or by the rules of the New York Stock Exchange, our board of directors will have the authority without further stockholder authorization to issue from time to time shares of preferred stock in one or more series and to fix the terms, limitations, relative rights and preferences and variations of each series. Although we have no present plans to issue any further shares of preferred stock, the issuance in the future of additional shares of preferred stock, or the issuance of rights to purchase such shares, could decrease the amount of earnings and assets available for distribution to the holders of common stock, could adversely affect the rights and powers, including voting rights, of the common stock, and could have the effect of delaying, deterring or preventing a change in control of us or an unsolicited acquisition proposal.

 7% Series A Convertible Participating Preferred Stock

Term. The Series A Preferred Stock is perpetual, subject to the redemption and conversion rights summarized herein.

Ranking. The Series A Preferred Stock ranks senior to our common stock and all other forms of our equity and equity-like securities convertible into common stock, with respect to dividends 

 

 

and distributions on liquidation, winding-up and dissolution and junior to all of our existing and future indebtedness.

Liquidation Preference. Each share of Series A Preferred Stock was issued with an initial liquidation preference of $5.60, which liquidation preference accretes to include the cumulative dividends described below, to the extent not paid in cash, which we refer to as the accretion amount, and together with the amount of the initial liquidation preference, the accreted liquidation preference. Upon any liquidation or dissolution of us, before any distributions may be made with respect to our common stock and subject to the rights of holders of any Liquidation Senior Stock (as defined in the Certificate of Designation for the Series A Preferred Stock) and the rights of our creditors, the holders of Series A Preferred Stock are entitled to receive the greater of (a) the accreted liquidation preference, and (b) the amount the holders of Series A Preferred Stock would have received in respect of the number of shares of common stock that would be issuable if they had converted their Series A Preferred Stock into common stock immediately prior to such liquidation or dissolution.

Dividends. The Series A Preferred Stock accumulates an accreting return at a rate per annum equal to 7% on the accreted liquidation preference , payable quarterly in arrears (the “accretion amount”) on March 31st, June 30th, September 30th and December 31st of each year (each, a “return payment date”), beginning on September 30, 2020. Until July 1, 2023, the accretion amount will automatically be paid in-kind by adding to the accreted liquidation preference of each share the unpaid accretion amount that has accumulated on such share to, but excluding, the return payment date. On and after July 1, 2023, we may, at our option, pay the accumulated and unpaid accretion amount on the Series A Preferred Stock in cash. On any return payment date, in the event we do not pay all or any portion of the accretion amount that has accumulated since the previous return payment date, then such accretion amount will be automatically added to the accreted liquidation preference of each share of Series A Preferred Stock then outstanding. The accretion amount accrues on the accreted liquidation preference on a daily basis from the initial issuance of the Series A Preferred Stock. With respect to cash dividends, we may pay a noncumulative cash dividend on each share of the Series A Preferred Stock when, as and if declared by our board of directors and permitted under the Delaware General Corporation Law (the “DGCL”), out of funds legally available for the payment of distributions.

We may not declare or pay any dividends or distributions on our common stock prior to July 1, 2023. Thereafter we may not declare or pay any dividends or distributions on our common stock unless the entirety of the accretion amount has been, or will be concurrently, paid in full in cash, unless a majority of the holders of outstanding shares of the Series A Preferred Stock approve such dividend. In addition, holders of the Series A Preferred Stock will participate, pro-rata on an as-converted basis, in any dividends and distributions made to holders of our common stock or other equity securities (including securities convertible into equity securities on an as-converted basis).

Rights of Holders Upon Change of Control. In connection with a Change of Control (as defined below), holders of Series A Preferred Stock may elect to convert all, or any whole number of shares that is less than all, of their Series A Preferred Stock into shares of common stock at the then applicable conversion price. If such Change of Control occurs after the date on which no “person” or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) beneficially 

 

 

owns in excess of 50% of our common stock on an as converted basis, holders of shares of Series A Preferred Stock may elect to convert their Series A Preferred Stock into common stock as described in the prior sentence, or in the alternative, may elect to require us to redeem all, or any whole number of shares that is less than all, of their Series A Preferred Stock, in cash at a price per share equal to 100% of the accreted liquidation preference (the “Change of Control Repurchase Right”), provided that our obligation to make payment thereof is limited to funds legally available therefor (and in such event, we are required to redeem the maximum amount legally permissible). We are prohibited from voluntarily taking any action that would give rise to this redemption right of the holders of the Series A Preferred Stock unless sufficient funds are legally available to fully pay the maximum aggregate redemption price that would be payable if all holders of Preferred Stock made such redemption election with respect to all then-outstanding shares of Series A Preferred Stock. Prior to repurchasing the shares of Series A Preferred Stock that are subject to the Change of Control Repurchase Rights, we may elect, at our option, to make payment in full of any outstanding and unpaid principal and interest amounts on our existing Amended and Restated Senior Secured Credit Facility.

Redemption Rights

Redemption at Our Option: We have the right to redeem all, but not less than all, of the Series A Preferred Stock, subject to the rights of holders of the Series A Preferred Stock to convert the Series A Preferred Stock prior to such redemption, beginning on the six-year anniversary of June 29, 2020, which is the date on which shares of Series A Preferred Stock were first issued (such date, the “Private Placement Closing Date”) for a cash purchase price equal to (a) on or after the six-year anniversary and prior to the seven-year anniversary of the Private Placement Closing Date, 105% of the accreted liquidation preference, (b) on or after the seven-year anniversary and prior to the eight-year anniversary of the Private Placement Closing Date, 103% of the accreted liquidation preference or (c) on or after the eight-year anniversary of the Private Placement Closing Date, 100% of the accreted liquidation preference.

We will give notice of any redemption not less than 30 nor more than 60 days prior to the redemption date set forth in the notice. The redemption notice will specify, amongst other things, that the Series A Preferred Stock called for redemption may be converted at the option of the holder at any time before the close of business on the business day immediately preceding the redemption date (or, if the we fail to pay the redemption price due on such redemption date in full, at any time until such time as we pay such redemption price in full).

Redemption at Our Option Upon Change of Control. A Change of Control will be deemed to occur if: (i) a “person” or “group” (within the meaning of Section 13(d)(3) of the Exchange Act), other than Emerald Holding, Inc., its wholly owned subsidiaries or Onex or any of Onex’ affiliates become the direct or indirect beneficial owners (as determined in accordance with Rule 13d-3 of the Exchange Act) of shares of our common equity representing more than 50% of the voting power of all of our then-outstanding common equity or (ii) upon the consummation of any (x) sale, lease or other transfer, in one transaction or a series of transactions, of all or substantially all of our assets and our subsidiaries, taken as a whole, to any person or (y) transaction or series of transactions in connection with which all of our common stock is exchanged for, converted into, acquired for, or constitutes solely the right to receive, other securities, cash or other property; provided, however, that any such transaction pursuant to which 

 

 

the persons that directly or indirectly beneficially owned all classes of our common equity immediately prior to such transaction directly or indirectly beneficially own, immediately after such transaction, more than 50% of all classes of common equity of the surviving corporation or the parent thereof, in substantially the same proportions vis-à-vis each other as immediately before such transaction will be deemed not to be a Change of Control pursuant to clause (ii) (clauses (i) and (ii) together, a “Change of Control”). If there is a Change of Control prior to the six-year anniversary of the Private Placement Closing Date, we have the right to redeem all, but not less than all, of the Series A Preferred Stock, subject to the right of holders of the Series A Preferred Stock to convert the Series A Preferred Stock prior to such redemption, for a cash purchase price equal to 100% of the accreted liquidation preference, plus the net present value of the additional amount by which the accreted liquidation preference would have increased from the date of such redemption through the sixth anniversary of the Private Placement Closing Date.

 

On or before the 20th business day prior to the effective date of a Change of Control (or, if later, promptly after we discover that a Change of Control may occur) we will send to each holder a notice of such Change of Control. The Change of Control notice will specify, amongst other things, that the Series A Preferred Stock may instead be converted at the option of the holder at any time before the close of business on the business day immediately preceding the date fixed by us in the Change of Control notice for the repurchase of any Series A Preferred Stock in connection with such Change of Control.

Conversion Rights

Optional Conversion by Holders. Shares of the Series A Preferred Stock may be converted at the option of the holder thereof, in whole or in part, into a number of fully paid and non-assessable shares of our common stock equal to the (a) amount of the accreted liquidation preference, divided by (b) the applicable conversion price.

Mandatory Conversion. If, at any time following the third anniversary of the Private Placement Closing Date, the closing price of our common stock exceeds 175% of the then-applicable conversion price for a period of 20 consecutive trading days, we may, at our option, require that any or all of the then-outstanding shares of Series A Preferred Stock be converted automatically into common stock at the then-applicable conversion price, provided that such conversion will result in the issuance of unrestricted shares of common stock, the common stock is then listed (and trading is not suspended or limited in any material 

respect) on the NYSE, and we have not received a delisting or suspension notice and delisting or suspension is not reasonably likely to occur.

Conversion Price. The initial conversion price of the Series A Preferred Stock is $3.52 per share and is subject to customary anti-dilution adjustments, including downward adjustments to the conversion price in connection with certain future sales or issuances of securities by us that are below fair market value and adjustments in the case of any stock split, stock dividend, recapitalization or similar events, all as more fully described in the Certificate of Designations for the Series A Preferred Stock. Subject to obtaining any vote of stockholders required by the rules of the NYSE, if any, the conversion price may not be adjusted below $3.23 per share of 

 

 

common stock (other than as a result of any stock split, stock dividend, recapitalization or similar event).

No Fractional Shares. If, upon conversion of the Series A Preferred Stock, a holder would be entitled to receive a fractional interest in a share of our common stock (after aggregating all shares of common stock issuable upon conversion by such holder), we will, upon conversion, pay in lieu of such fractional interest, to the extent permitted under applicable law, cash based on the last reported sale price of a share of our common stock at the time of such conversion (as more fully described in the Certificate of Designations for the Series A Preferred Stock).

Voting and Director Designation Rights

Voting Generally. Holders of shares of Series A Preferred Stock will be entitled to vote with the holders of shares of our common stock and not as a separate class, at any annual or special meeting of our stockholders, and may act by written consent in the same manner as the holders of common stock, in each case, on an as-converted basis, subject to the specific Approval Rights described below.

In the event of any vote or action by written consent, each holder of shares of Preferred Stock will be entitled to that number of votes equal to the whole number of shares of common stock into which such holder’s aggregate number of shares of Series A Preferred Stock are convertible as of the close of business on the record date fixed for such vote or written consent.

Series A Preferred Stock Voting as a Separate Class. For so long as any shares of Series A Preferred Stock remain outstanding, the affirmative vote or consent of holders representing a majority of the voting power of the outstanding shares of Series A Preferred Stock is required to effect any of the following actions (the “Approval Rights”):

	
 
	
•
	
any amendment to our Certificate of Incorporation, our Bylaws or the Series A Preferred Stock Certificate of Designations that (i) authorizes or creates or increases the authorized number of shares of equity securities that are pari passu or senior to the Series A Preferred Stock or (ii) adversely affects the rights, preferences or voting powers of the Series A Preferred Stock;

	
 
	
•
	
a voluntary deregistration under the Exchange Act or delisting the common stock from the NYSE (other than in connection with a Change of Control Transaction in which shares of our common stock convert into the right to receive only cash consideration, listed common securities of the acquirer or other counterparty or a combination thereof);

	
 
	
•
	
the declaration or payments of any dividends or distributions on our common stock, unless at the time of payment of such distribution, the entirety of the accumulated and unpaid accretion amount from the last return payment date through such date has been, or will concurrently be paid in full in cash; or

 

 

	
 
	
•
	
the issuance of any convertible indebtedness, other class of preferred stock or other equity securities in each case with rights to payments or distributions in which the Series A Preferred Stock would not participate on a pro-rata, as-converted basis.

Board of Directors Representation. For so long as the Series A Preferred Stock represents a minimum percentage of the outstanding shares of common stock on an as-converted basis as described below, the holders of the Series A Preferred Stock shall have the following rights to representation on our board of directors (the “Preferred Stock Directors”):

 

	
Minimum Percentage
	
  
	
Board Representation

	
>50%
	
  
	
5 directors

	
>40%
	
  
	
4 directors

	
>30%
	
  
	
3 directors

	
>20%
	
  
	
2 directors

	
>10%
	
  
	
1 director

 

In limitation of the foregoing board representation rights, the number of directors that the holders of Series A Preferred Stock will be entitled to elect voting as a separate class will be reduced to the extent necessary to ensure that, at all times, at least two directors elected by the holders of our common stock and the Series A Preferred stock, voting together on an as-converted basis and, at any time that the minimum percentage is less than 40%, at least a majority of the board seats will be elected by the holders of our common stock and the Series A Preferred stock, voting together on an as-converted basis. In addition, for so long as the minimum percentage is greater than 50%, the size of our board may not be increased to more than nine seats, or decreased, without the approval of a majority of the Preferred Stock Directors. All decisions of our board with respect to the exercise or waiver of rights relating to the Series A Preferred Stock shall be determined by a majority of our directors that are not employees of Emerald or affiliated with Onex (“Unaffiliated Directors”), or by a committee of Unaffiliated Directors.

In addition, for so long as the outstanding shares of Series A Preferred Stock represent more than 30% of the outstanding shares of our common stock on an as-converted basis, without the approval of a majority of the Preferred Stock Directors, we may not:

	
 
	
•
	
incur new indebtedness (excluding any borrowing under our Amended and Restated Revolving Credit Facility (as defined in the Certificate of Designations)) (i) when our Adjusted EBITDA (as reported in our most recent annual report on Form 10-K or quarterly report on Form 10-Q, as adjusted to reflect the pro forma effect of any acquisitions or dispositions by us or our subsidiaries during the applicable period) for the trailing twelve months is less than $100 million, if incurring such new indebtedness would result in our gross debt to Adjusted EBITDA ratio for the trailing twelve-month period exceeding 4.50x, or (ii) when our Adjusted EBITDA (as adjusted in clause (i) hereof) for the trailing twelve months is greater than or equal to $100 million, if incurring such new indebtedness would result in our net debt to Adjusted EBITDA ratio exceeding 4.50x;

	
 
	
•
	
redeem or repurchase any of our stock junior to the Series A Preferred;

 

 

	
 
		

	
 
	
•
	
purchase or acquire any capital stock or assets of any third party, or dispose of our assets or the capital stock of our subsidiaries, in each case in any individual transaction or series of related transactions with a value in excess of $100 million;

	
 
	
•
	
hire, promote, demote or terminate our chief executive officer; or

	
 
	
•
	
make a voluntary filing for bankruptcy or commence a liquidation or dissolution of us

Provisions of Our Certificate of Incorporation, Bylaws and Delaware Law that May Have an Anti-Takeover Effect

Delaware law, our Certificate of Incorporation, our Bylaws and the Certificate of Designations for our Series A Preferred Stock contain provisions that could have the effect of delaying, deferring or discouraging another party from acquiring control of us. These provisions, which are summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors.

Certificate of Incorporation and Bylaws

Certain provisions in our Certificate of Incorporation, as amended from time to time, including by the Certificate of Designations for our Series A Preferred Stock, and Bylaws summarized below may be deemed to have an anti-takeover effect and may delay, deter or prevent a tender offer or takeover attempt that a stockholder might consider to be in its best interests, including attempts that might result in a premium being paid over the market price for the shares held by existing stockholders. 

Among other things, our Certificate of Incorporation and Bylaws:

	
 
	
o
	
authorize the issuance of blank check preferred stock that our board of directors could issue to increase the number of outstanding shares and to discourage a takeover attempt;

	
 
	
o
	
divide our board of directors into three classes with staggered three-year terms;

	
 
	
o
	
provide that stockholders may remove directors only “for cause” once Onex ceases to own more than 50% of all our outstanding common stock;

	
 
	
o
	
prohibit our stockholders from calling a special meeting of stockholders once Onex ceases to own more than 50% of all our outstanding common stock;

	
 
	
o
	
prohibit stockholder action by written consent once Onex ceases to own more than 50% of all our outstanding common stock, which will require that all stockholder actions be taken at a duly called meeting of our stockholders;

	
 
	
o
	
provide that the board of directors is expressly authorized to adopt, alter, or repeal our Bylaws;

 

 

	
 
	
o
	
establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; and

	
 
	
o
	
require the approval of holders of at least two-thirds of the outstanding shares of common stock to amend the Bylaws and certain provisions of our Certificate of Incorporation if Onex ceases to own more than 50% of all our outstanding common stock.

Under our Bylaws and the Certificate of Designations for the Series A Preferred Stock, holders of shares of our Series A Preferred Stock are entitled to vote on an as-converted basis with the holders of shares of our common stock and not as a separate class with respect to the matters described above. In addition, holders of Series A Preferred Stock have the rights described above under “-- Series A Preferred Stock Voting as a Separate Class.” 

Delaware Takeover Statute

Subject to certain exceptions, Section 203 of the Delaware General Corporation Law (“DGCL”) prohibits a Delaware corporation from engaging in any “business combination” (as defined below) with any “interested stockholder” (as defined below) for a period of three years following the date that such stockholder became an interested stockholder, unless: (i) prior to such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (ii) on consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned (x) by persons who are directors and also officers and (y) by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or (iii) on or subsequent to such date, the business combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.

Section 203 of the DGCL defines “business combination” to include: (i) any merger or consolidation involving the corporation and the interested stockholder; (ii) any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; (iii) subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; (iv) any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or (v) the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. In general, Section 203 defines an “interested stockholder” as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by such entity or person.

 

 

A Delaware corporation is permitted to opt-out of Section 203. In our Certificate of Incorporation, we have elected not to be governed by Section 203 of the DGCL, as permitted under and pursuant to subsection (b)(3) of Section 203.

Corporate Opportunity

Delaware law permits corporations to adopt provisions renouncing any interest or expectancy in certain opportunities that are presented to a corporation or its officers, directors, or stockholders. In our Certificate of Incorporation, to the fullest extent permitted by applicable law, we renounce any interest or expectancy that we have in any business opportunity, transaction, or other matter in which Onex, any officer, director, partner, or employee of any entity comprising an Onex entity, and any portfolio company in which such entities or persons have an equity interest (other than us) (each, an “Excluded Party”), participates or desires or seeks to participate in, even if the opportunity is one that we might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so. Each such Excluded Party shall have no duty to communicate or offer such business opportunity to us and, to the fullest extent permitted by applicable law, shall not be liable to us or any of our stockholders for breach of any fiduciary or other duty, as a director or officer or controlling stockholder, or otherwise, by reason of the fact that such Excluded Party pursues or acquires such business opportunity, directs such business opportunity to another person, or fails to present such business opportunity, or information regarding such business opportunity, to us. Notwithstanding the foregoing, our Certificate of Incorporation does not renounce any interest or expectancy we may have in any business opportunity, transaction or other matter that is (1) offered in writing solely to one of our directors or officers who is not also an Excluded Party, (2) offered to an Excluded Party who is one of our directors, officers or employees and who is offered such opportunity solely in his or her capacity as one of our directors, officers or employees, or (3) identified by an Excluded Party solely through the disclosure of information by or on our behalf.

Choice of Forum

Our Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder, employee or agent of the Company to us or our stockholders, (iii) any action asserting a claim against us, or our directors, officers or other employees, arising pursuant to any provision of the DGCL or our Certificate of Incorporation or Bylaws, or (iv) any action asserting a claim against us, or our directors, officers, stockholders or other employees, governed by the internal affairs doctrine. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of claims to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers and may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.eex-ex1011_1087.htm

 

Exhibit 10.11

FORM OF OPTION GRANT 2021

 

EMERALD EXPOSITIONS EVENTS, INC.

2017 OMNIBUS EQUITY PLAN

 

STOCK OPTION AGREEMENT

 

THIS AGREEMENT (the “Agreement”), effective as of January _, 2021 (the “Date of Grant”), is between Emerald Holding, Inc., a Delaware corporation (together with its successors, the “Company”), and ______ (the “Optionee”).

Section 1.Grant of Option.  The Company will propose, for shareholder approval, an amendment to the Company’s 2017 Omnibus Equity Plan (as may be amended from time to time, the “Plan”) to increase the number of shares available for issuance under the Plan (the “2021 Plan Amendment”). Subject to approval of the 2021 Plan Amendment, the Company hereby grants to the Optionee the right and option (the “Option”) to purchase all or any part of an aggregate of such number of Shares (“Option Shares”) as is set forth on the signature page hereto (subject to adjustment as provided in Section 12 of the Plan), on the terms and conditions set forth in this Agreement and in the Plan, a copy of which is being delivered to the Optionee concurrently herewith and is made a part hereof as if fully set forth herein.  The Option Shares shall be divided into three tranches as set forth on the signature page hereto, which shall consist of (i) the “Tranche A Option,” (ii) the “Tranche B Option,” and (iii) the “Tranche C Option,” the vesting and exercisability of each of which shall be subject to the satisfaction of the conditions specified in Section 4.1 below. The grant shall be accepted upon the execution of this Agreement by both parties hereto; provided, however, that this Agreement and the Option granted hereunder shall be null and void in the event the 2021 Plan Amendment is not approved by shareholders in accordance with the terms of the Plan.  By executing this Agreement, the Optionee hereby acknowledges and agrees that, except as otherwise determined by the Committee, this Option is intended to be in lieu of any “Subsequent Annual Equity Grant” awards (as described in the Optionee’s employment agreement) through 2025.  Except as otherwise defined herein, capitalized terms used in this Agreement shall have the same definitions as set forth in the Plan.  The Option is not intended to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code. 

Section 2.Purchase Price.  The price (the “Option Price”) at which the Optionee shall be entitled to purchase the Tranche A Options, the Tranche B Options, and the Tranche C Options, respectively, upon exercise, shall be the price per Share set forth on the signature page hereto (subject to adjustment as provided in Section 12 of the Plan).

Section 3.Term of Option.  The Option shall be exercisable to the extent and in the manner provided herein until the close of business on the day preceding the 10th anniversary of the Date of Grant (the “Term”); provided, however, that the Option may be earlier terminated as provided in Section 6, 7 or 8 hereof; and provided further that, subject to Section 7 and 8, if, as of the date the Option would otherwise terminate the Optionee is not permitted by applicable law or an insider trading policy of the Company to exercise the Option, the Term of the Option will be automatically extended until a date that is thirty (30) days after the prohibition no longer applies.

 

 

Section 4.Exercisability of Option.  

4.1.Vesting.  Subject to the provisions of this Agreement and the Plan, the Option shall vest and become exercisable in accordance with the following schedule, which, for the sake of clarity, shall be applied separately for each of the Tranche A Options, the Tranche B Options, and the Tranche C Options:

(a)Prior to the first anniversary of the Vesting Commencement Date, the Option may not be exercised (unless the Committee otherwise so determines in its sole discretion);

(b)On the first anniversary of the Vesting Commencement Date but before the second anniversary of the Vesting Commencement Date, the Option may be exercised to acquire up to 20% of the aggregate number of Option Shares; 

(c)On the second anniversary of the Vesting Commencement Date but before the third anniversary of the Vesting Commencement Date, the Option may be exercised to acquire up to 40% of the aggregate number of Option Shares, less any Option Shares previously acquired pursuant to the Option; 

(d)On the third anniversary of the Vesting Commencement Date but before the fourth anniversary of the Vesting Commencement Date, the Option may be exercised to acquire up to 60% of the aggregate number of Option Shares, less any Option Shares previously acquired pursuant to the Option;

(e)On the fourth anniversary of the Vesting Commencement Date but before the fifth anniversary of the Vesting Commencement Date, the Option may be exercised to acquire up to 80% of the aggregate number of Option Shares, less any Option Shares previously acquired pursuant to the Option; and 

(f)On the fifth anniversary of the Vesting Commencement Date, the Option may be exercised to acquire up to 100% of the aggregate number of Option Shares, less any Option Shares previously acquired pursuant to the Option.

For purposes of the foregoing, the “Vesting Commencement Date” shall mean January 4, 2021. 

Notwithstanding the foregoing, if a Change in Control occurs, subject to the Optionee’s continued employment through the date of such Change in Control, the Option shall become 100% vested and exercisable as of immediately prior to the Change in Control. 

The portion of the Option which becomes vested and exercisable as described in this Section 4.1 is hereinafter referred to as the “Vested Portion.”

Section 5.Manner of Exercise and Payment.

5.1.Notice of Exercise.  The Option shall be exercised when written notice of such exercise in substantially the form attached hereto as Exhibit A or such other form as the Committee may require from time to time (the “Exercise Notice”), signed by the person entitled to exercise the Option, has been delivered to the Company in accordance with the provisions of Section 9.6 hereof.  The Exercise Notice shall state that the Optionee is electing to exercise the Option, shall set forth the number of Option Shares in respect of which the Option is being exercised and shall be signed by the Optionee or, where applicable, by the Optionee’s legal representative.

5.2.Deliveries.  The Exercise Notice described in Section 5.1 shall be accompanied by payment of the full Option Price for the Option Shares in respect of which the Option is being exercised, together with any withholding taxes that may be due as a result of the exercise of the Option, which shall be 

 

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payable as provided in Section 9.11 below. The payment of the Option Price to be made by any of the following methods, as elected by the Optionee: (a) by delivery to the Company of a certified or bank check payable to the order of the Company, (b) cash by wire transfer or other immediately available funds to an account designated by the Company, or (c) a broker-assisted “cashless exercise” program, or (d) only if the Committee so permits, having withheld from the number of Option Shares otherwise issuable following the exercise of the Option the number of Option Shares having a Fair Market Value equal to the exercise price or (e) by another method or combination of methods under procedures established by the Company. 

5.3.Issuance of Shares.  Subject to Section 18.2 of the Plan, upon receipt of the Exercise Notice and full payment for the Option Shares in respect of which the Option is being exercised (in any form permitted above), the Company shall take such action as may be necessary under applicable law to cause the issuance to the Optionee of the number of Option Shares as to which the Option was exercised and the Optionee shall cooperate to the fullest extent requested by the Company (including by executing such documents and providing such information) as may be necessary to effect the issuance of such Option Shares in compliance with all applicable law.  If the Optionee fails to make any of the deliveries required by Section 5.2 of this Agreement, the Optionee’s exercise shall not be given effect and the Shares shall not be issued to the Optionee.  

5.4.Shareholder Rights.  The Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any Option Shares until: (a) the Option shall have been exercised in accordance with the terms of this Agreement and the Optionee shall have paid the full Option Price for the number of Option Shares in respect of which the Option was exercised and any withholding taxes due, (b) the Company shall have issued the Option Shares to the Optionee and (c) the Optionee’s name shall have been entered as a holder of record on the books of the Company.  Upon the occurrence of all of the foregoing events, the Optionee shall have full ownership rights with respect to such Option Shares.  

5.5.Prohibition Against Transfer of Option Shares. 

(a)The Optionee may not directly or indirectly, sell (including by way of “net settlement” or broker-assisted exercise), transfer, assign, donate, contribute, pledge, hypothecate, encumber or otherwise dispose of (any of the foregoing, a “Transfer”) any Option Shares held by the Optionee, or any interest therein, except in accordance with Section 5.5(b) or (c) below or with the prior written consent of the Company authorized by affirmative vote of a majority of the members of the Board.  Notwithstanding the foregoing, the sale by the Optionee (including by “broker-assisted” sale or net settlement of all or a portion the Option) of Option Shares in order to satisfy any withholding or other taxes associated with the exercise of the Option shall not be deemed to be a Transfer for purposes of this Section 5.5 (and, for the avoidance of doubt, shall not be subject to the limitations set forth in this Section 5.5).

(b)The restrictions contained in Section 5.5(a) shall not apply with respect to (i) any Transfer of Option Shares to members of the Optionee's “Family Group”, (ii) any Transfer of Option Shares to the Company and (iii) any Transfer of Option Shares to any Person in connection with a merger, consolidation, acquisition, sale, exchange, recapitalization, reorganization, or similar transaction, in each case as approved by the Board; provided, that the restrictions contained in this Section 5.5 shall continue to be applicable to the Option Shares after any such Transfer pursuant to clause (i), and provided further that the transferees of such Option Shares pursuant to clause (i) shall have agreed in writing to be bound by the restrictions contained herein.  Any Transfer or attempted Transfer of any Option Shares in violation of any provision of this Agreement shall be null and void ab initio, and the Company shall not record such Transfer on its books or treat any purported transferee of such Option Shares as the owner of such shares for any purpose.  For purposes of the foregoing, “Family Group” means the Optionee, along with any trust, foundation or similar entity controlled by the Optionee, the only beneficiaries of which, or a corporation, partnership or limited liability company, the only stockholders, limited and/or general partners or members, as the case may be, of 

 

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which, include only the Optionee, the Optionee's parents, the Optionee's spouse, the Optionee's descendants (whether natural or adopted), and spouses of the Optionee's descendants.

(c)Notwithstanding the provisions of Section 5.5(a) and (b), the Optionee may Transfer a number of Option Shares that does not exceed eighty five percent (85%) of the aggregate number of shares originally granted pursuant to this Option Agreement multiplied by a percentage equal to a fraction, the numerator of which is the number of shares of Common Stock disposed of by the Onex Partners V, LP between the Date of Grant and the date of the Optionee's proposed sale of Option Shares and the denominator of which is the number of shares of Common Stock that would have been held by the Onex Partners V, LP if it had converted its holdings of preferred stock into Common Stock as of the Date of Grant.

(d)The provisions of this Section 5.5 shall terminate automatically upon the earliest to occur of (i) the second anniversary of the date on which the Option becomes fully vested hereunder and (ii) the death or Disability of the Optionee, (iii) the Termination of the Optionee without Cause (as defined below), and other than due to death or Disability (as defined below), in which case clause (ii) shall apply), in which case the provisions of this Section 5.5 shall lapse with respect to the aggregate number of Option Shares held at the time of such Termination in equal installments on each of the six (6) month anniversary, twelve (12) month anniversary, and eighteen (18) month anniversary of the date of Termination, (iv) a Change in Control (in which case such termination shall occur immediately prior thereto) or (v) the date as of which Onex Partners V, LP no longer holds (either directly or that it may hold if it were to convert its holdings of preferred shares) at least 20% of the number of shares of Common Stock that would have been held by Onex Partners V, LP if it had converted its holdings of preferred stock into Common stock as of January 4, 2021 (disregarding, for purposes of determining whether its holdings are below such threshold, any shares attributable to accreting dividends on its preferred shares or other similar securities).

Section 6.Termination.

6.1.Termination.  

(a)If the Optionee Terminates, (i) subject to Section 4.1(f) and Section 6.1(b) herein, the Option, other than the Vested Portion of the Option, shall terminate and be of no further force and effect as of and following the close of business on the date of such Termination, and (ii) the Vested Portion of the Option shall be exercisable by the Optionee during the Post-Termination Exercise Period (as defined below), but in no event after the expiration of the Term.  Any portion of the Vested Portion of the Option that, following the Optionee’s Termination, is not exercised prior to the expiration of the Post-Termination Exercise Period shall terminate at the end of the Post-Termination Exercise Period.  Notwithstanding anything in this Agreement or the Plan to the contrary, the Option, whether or not exercisable, shall immediately terminate (x) upon a Termination of the Optionee by the Company or a Subsidiary for Cause, (y) in the event that the Optionee materially violates any provision of Section 7 hereof or (z) in the event that the Optionee materially violates any provision of any Restrictive Agreement (as hereinafter defined).

(b)Upon a termination (i) by the Company other than for “Cause” (as defined below), (ii) by reason of death or Disability (as defined below), or (iii) if the Optionee’s employment agreement with the Company provides for severance benefits in the event of termination for “Good Reason”, by the Optionee for “Good Reason” (as defined in the Optionee’s employment agreement), a pro-rated number of unvested Option Shares for each of Tranche A Options, the Tranche B Options and the Tranche C Options shall vest and become exercisable, such number for each Tranche to be equal to the unvested portion of such Tranche that would have become vested and exercisable in the ordinary course had the Optionee remained employed with the Company for an additional twelve (12) months, multiplied by a fraction, the numerator of which is the number of days the Optionee was employed by the Company from the last vesting date the occurred pursuant to this Agreement 

 

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(or, in the case of the first vesting date, since the Vesting Commencement Date) and the denominator of which is 365.

(c)For purposes of this Agreement, “Cause” shall mean (i) if the Optionee is a party to an employment or a severance agreement with the Company or one of the Subsidiaries in which “Cause” is defined, the occurrence of any circumstances defined as “Cause” in such employment or severance agreement, or (ii) if the Optionee is not a party to an employment or severance agreement with the Company or one of the Subsidiaries in which “Cause” is defined, (A) the Optionee’s indictment for, or conviction or entry of a plea of guilty or nolo contendere to (x) any felony or (y) any crime (whether or not a felony) involving moral turpitude, fraud, theft, breach of trust or other similar acts, whether under the laws of the United States or any state thereof or any similar foreign law to which the Optionee may be subject, (B) the Optionee’s being or having been engaged in conduct constituting breach of fiduciary duty, willful misconduct or gross negligence relating to the Company or any of the Subsidiaries or the performance of the Optionee’s duties, (C) the Optionee’s willful failure to (x) follow a reasonable and lawful directive of the Company or of the Subsidiary at which he or she is employed or provides services, or of the Board or (y) comply with any written rules, regulations, policies or procedures of the Company or a Subsidiary at which he or she is employed or to which he or she provides services which, if not complied with, would reasonably be expected to have an adverse effect (other than a de minimis adverse effect) on the business or financial condition of the Company, (D) the Optionee’s violation of his or her employment, consulting, separation or similar agreement with the Company or any non-disclosure, non-solicitation or non-competition covenant in any other agreement to which the Optionee is subject, (E) the Optionee’s deliberate and continued failure to perform his or her material duties to the Company or any of its Subsidiaries or (F) the Optionee’s violation of the Company’s Code of Business Conduct and Ethics, as it may be amended from time to time.

(d)For purposes of this Agreement, “Disability” shall mean the Optionee is entitled to and has begun to receive long-term disability benefits under the long-term disability plan of the Company in which the Optionee participates, or, if there is no such plan, the Optionee’s inability, due to physical or mental illness, to perform the essential functions of the Optionee’s job, with or without a reasonable accommodation, for 180 days out of any 270 day consecutive day period.

6.2.“Post-Termination Exercise Period” shall mean the period commencing on the Optionee’s Termination and ending at the close of business on the 90th day after the date of the Optionee’s Termination.  Notwithstanding anything to the contrary herein, in the event of the Optionee’s death or Disability, the Post-Termination Exercise Period shall mean the period commencing on the Optionee’s death or Disability and ending at the close of business on the 180th day after the date of the Optionee’s death or Disability.

Section 7.Prohibited Activities.  In consideration of and as a condition to the grant of the Option, the Optionee agrees to the provisions set forth in this Section 7.  

 

7.1.No Sale or Transfer.  The Optionee shall not sell, transfer, assign, grant a participation in, gift, hypothecate, encumber, mortgage, create any lien, pledge, exchange or otherwise dispose of the Option or any portion thereof other than to the extent permitted by Section 11.2 of the Plan.

7.2.Right to Terminate Option.  The Optionee understands and agrees that the Company has granted this Option to the Optionee to reward the Optionee for the Optionee’s future efforts and loyalty to the Company and its affiliates by giving the Optionee the opportunity to participate in the potential future appreciation of the Company.  Accordingly, if the Optionee (a) engages in any activity prohibited by Section 7 of this Agreement, (b) breaches or violates any obligations under any Restrictive Agreement to which the Optionee is a party or (c) is convicted of a felony against the Company or any of its affiliates, then, in addition to any other rights and remedies available to the Company, the Company shall be entitled, at its option, 

 

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exercisable by written notice, to terminate the Option (including the Vested Portion of the Option), or any unexercised portion thereof, which shall be of no further force and effect.  For the sake of clarity, the foregoing rights of the Company in this Section 7.2 apply only to the outstanding portion of the Option, and shall not apply to any Shares acquired upon exercise of any portion of the Option.

7.3.Proprietary Information.  The Optionee agrees that the Optionee will not at any time (a) disclose, directly or indirectly, any Proprietary Information to any Person other than the Company or executives thereof at the time of such disclosure who, in the reasonable judgment of the Optionee, need to know such Proprietary Information or such other Persons to whom the Optionee has been specifically instructed to make disclosure by the Board and in all such cases only to the extent required in the course of the Optionee’s service to the Company or (b) use any Proprietary Information, directly or indirectly, for the Optionee’s own benefit or for the benefit of any other Person.  Upon the Optionee’s Termination, the Optionee will immediately deliver to the Company all notes, letters, documents and records which may contain Proprietary Information which are then in the Optionee’s possession or control and will not retain any copies and summaries thereof.  All notes, letters, documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of the Company or its affiliates and any copies, in whole or in part, thereof (collectively, the “Documents”), whether or not prepared by the Optionee, shall be the sole and exclusive property of the Company.  The Optionee will safeguard all Documents and will surrender to the Company at the time the Optionee’s employment Terminates, or at such earlier time or times as the Board may specify, all Documents then in the Optionee’s possession or control.

7.4.Non-Competition and Non-Solicitation.  The Optionee agrees that during employment and for the Restricted Period (as defined below), the Optionee shall not:

(a)whether for compensation or without compensation, directly or indirectly, as an owner, principal, partner, member, shareholder, independent contractor, consultant, joint venture, investor, licensor, lender, employee or in any other capacity whatsoever, alone or in association with any other Person, carry on, be engaged or take part in, or render services or advice to, own, share in the earnings of, invest in the stocks, bonds or other securities of, or otherwise become financially interested in, any business, enterprise or other entity engaged directly or indirectly within the Territory (as defined below) in any Competitive Business (as defined below) activity; provided, however, that the Optionee shall be permitted to acquire a passive stock or equity interest in such a Competitive Business provided the stock or other equity interest acquired is not more than one percent of the outstanding interest in such business.  Nothing herein shall prevent the Optionee from engaging in any activity with, or holding a financial interest in, a non-competitive division, subsidiary or affiliate of a Competitive Business; and

(b)directly or indirectly through any officer, director, employee, representative or other agent or otherwise, (i) solicit or do business with any customer or supplier of the Company of whose names he was aware during his employment term (X) in any manner that interferes with such Person’s financial relationship with the Company, or (Y) in an effort to obtain such Person as a customer, supplier, consultant, salesman, agent or representative to any other business; or (ii) solicit or interfere with or endeavor to entice away any employee, consultant, officer, director or executive of the Company who was engaged in such relationship with the Company at any time during the Optionee’s employment term, (X) in any manner that interferes with such Person’s employment or consulting relationship with the Company or (Y) in an effort to obtain such Person as a customer, supplier, consultant, salesman, agent or representative to any Competitive Business.

7.5.Non-Disparagement.  The Optionee shall not at any time make (or cause to be made) to any Person any knowingly disparaging, derogatory or other negative statement about the Company or its affiliates.  The foregoing shall not be violated by (a) truthful statements in response to legal process, required governmental testimony or filings, or administrative or arbitral proceedings (including, without limitation, 

 

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depositions in connection with such proceedings), or (b) statements that the Optionee in good faith believes are necessary or appropriate to make in connection with his or her good faith performance of their duties to the Company.

7.6.Notice; Remedies.  The Optionee agrees to provide the Company with not less than thirty (30) days’ written notice of any resignation of employment from the Company. The Optionee specifically acknowledges and agrees that (a) the time, geographic and activity restrictions (as applicable) set forth in this Section 7 are reasonable and properly required for the protection of the Company and (b) the Company’s remedies under this Section 7 shall not prevent the Company or any Subsidiary from seeking injunctive or other equitable relief in connection with the Optionee’s breach of any Restrictive Agreement.  In the event that the provisions of this Section 7 should ever be deemed to exceed the limitation provided by applicable law, then the Optionee and the Company agree that such provisions shall be reformed to set forth the maximum limitations permitted.

7.7.Restatement of Financial Statements.  In addition to the other provisions in this Section 7, this Agreement, the Option and any Shares issued upon exercise of any portion of the Option shall be subject to any policies of the Company in effect on the Date of Grant or adopted by the Company at any time thereafter that provide for forfeiture of the Option and recoupment of any Shares issued upon exercise of any portion of the Option or of any gain received by the Optionee in connection with the sale of Shares received upon exercise of the Option in the event of any restatement of the Company’s financial statements.

7.8.Exceptions. 

(a)Notwithstanding the foregoing, nothing in this Section 7 shall prevent the Optionee from disclosing Proprietary Information to the extent required by law. Additionally, nothing in this Section 7 shall preclude the Optionee’s right to communicate, cooperate or file a complaint with any U.S. federal, state or local governmental or law enforcement branch, agency or entity (collectively, a “Governmental Entity”) with respect to possible violations of any U.S. federal, state or local law or regulation or otherwise make disclosures to any Governmental Entity, in each case, that are protected under the whistleblower or similar provisions of any such law or regulation; provided that in each case such communications and disclosures are consistent with applicable law.  Further, nothing in this Section 7 shall preclude the Optionee’s right to receive an award from a Governmental Entity for information provided under any whistleblower or similar program. 

(b)The Optionee shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law. The Optionee shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If the Optionee files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Optionee may disclose the trade secret to his or her attorney and use the trade secret information in the court proceeding, provided, that that the Optionee files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.

7.9.Survival of Obligations.  Notwithstanding the termination of this Agreement, the parties to this Agreement shall remain bound by the provisions of this Section 7, which may impose obligations upon the parties that extend beyond the termination of this Agreement.

For purposes of this Agreement, 

“Competitive Business” shall mean any business that is in competition with (a) the present products marketed or sold by the Company or any of its Subsidiaries or affiliates to their customers and as such products may be improved and/or modified, (b) the present services marketed, sold or provided by the Company or any 

 

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of its Subsidiaries or affiliates to their customers and as such services may be improved and/or modified or (c) the products and/or services the Company or any of its Subsidiaries or affiliates develops, designs, manufactures, markets, produces or supplies in the future to its customers, in each case including, without limitation, the business of operating business-to-business tradeshows, conferences and related publications and related digital media.

“Proprietary Information” shall mean confidential specifications, know-how, strategic or technical data, marketing research data, product research and development data, manufacturing techniques, confidential customer lists, sources of supply and trade secrets, all of which are confidential and may be proprietary and are owned or used by the Company, or any of its Subsidiaries or affiliates, and shall include any and all items enumerated in the preceding sentence and coming within the scope of the business of the Company or any of its Subsidiaries or affiliates as to which the Optionee may have access, whether conceived or developed by others or by the Optionee alone or with others during the period of service to the Company, whether or not conceived or developed during regular working hours.  Proprietary Information shall not include any records, data or information which (a) are in the public domain during or after the period of service by the Optionee provided the same are not in the public domain as a consequence of disclosure directly or indirectly by the Optionee in violation of this Agreement or (b) were known to the Optionee prior to commencing employment with the Company.

“Restricted Period” shall mean the 12-month period after the Optionee’s Termination from the Company or a Subsidiary for any reason.

 “Restrictive Agreement” shall mean any agreement between the Company or any Subsidiary and the Optionee that contains non-competition, non-solicitation, non-hire, non-disparagement or confidentiality restrictions applicable to the Optionee. 

“Territory” shall mean the United States of America and every other territory or country where the Company maintains employees, owns property or otherwise conducts business during any time that the Optionee is employed by the Company or owns any Shares (or rights to acquire Shares).

Section 8.Corporate Transaction.  Subject to Section 4(g), the provisions of Section 13 of the Plan shall apply to this Option in the event of a Corporate Transaction. In no event will any portion of the Option, whether vested or unvested, be terminated in connection with any Corporate Transaction that is not a Change in Control unless such portion has been fully accelerated as of immediately prior to the Corporate Transaction (and treated in accordance with Section 13.1(b)(i) of the Plan) or continued in accordance with Section 13.1(a) of the Plan (and the requirements set forth herein).

Section 9.Miscellaneous.

9.1.Acknowledgment.  The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof as the same may be amended from time to time.  The Optionee hereby acknowledges that the Optionee has reviewed the Plan and this Agreement and understands the Optionee’s rights and obligations thereunder and hereunder.  The Optionee also acknowledges that the Optionee has been provided with such information concerning the Company, the Plan and this Agreement as the Optionee and the Optionee’s advisors have requested.

 

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9.2.Reserved.

9.3.Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

(a)Governing Law.  This Agreement shall in all respects be governed by, and construed in accordance with, the laws (excluding conflict of laws rules and principles) of the State of Delaware applicable to agreements made and to be performed entirely within such State, including all matters of construction, validity and performance.

(b)Submission to Jurisdiction; Waiver of Jury Trial.  Any litigation against any party to this Agreement arising out of or in any way relating to this Agreement shall be brought in any federal or state court located in the State of New York in New York County and each of the parties hereby submits to the exclusive jurisdiction of such courts for the purpose of any such litigation; provided, that a final judgment in any such litigation shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Each party irrevocably and unconditionally agrees not to assert (i) any objection which it may ever have to the laying of venue of any such litigation in any federal or state court located in the State of New York in New York County, (ii) any claim that any such litigation brought in any such court has been brought in an inconvenient forum and (iii) any claim that such court does not have jurisdiction with respect to such litigation.  To the extent that service of process by mail is permitted by applicable law, each party irrevocably consents to the service of process in any such litigation in such courts by the mailing of such process by registered or certified mail, postage prepaid, at its address for notices provided for herein.  Each party hereto irrevocably and unconditionally waives any right to a trial by jury and agrees that either of them may file a copy of this paragraph with any court as written evidence of the knowing, voluntary and bargained-for agreement among the parties irrevocably to waive its right to trial by jury in any litigation.

9.4.Specific Performance.  Each of the parties agrees that any breach of the terms of this Agreement will result in irreparable injury and damage to the other party, for which there is no adequate remedy at law.  Each of the parties therefore agrees that in the event of a breach or any threat of breach, the other party shall be entitled to an immediate injunction and restraining order to prevent such breach, threatened breach or continued breach, and/or compelling specific performance of the Agreement, without having to prove the inadequacy of money damages as a remedy or balancing the equities between the parties.  Such remedies shall be in addition to any other remedies (including monetary damages) to which the other party may be entitled at law or in equity.  Each party hereby waives any requirement for the securing or posting of any bond in connection with any such equitable remedy.

9.5.Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible.

9.6.Notice.  Unless otherwise provided herein, all notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made (a) as of the date delivered, if delivered personally or by email, (b) on the date the delivering party receives confirmation, if delivered by facsimile, (c) three business days after being mailed by registered or certified 

 

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mail (postage prepaid, return receipt requested) or (d) one business day after being sent by overnight courier (providing proof of delivery), to the parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section): 

(a)If to the Company:

Emerald Holding, Inc.

100 Broadway, 14th Floor
New York, NY 10005
Attention:  Mitchell Gendel; mitch.gendel@emeraldx.com 

 

(b)If to the Optionee, at the most recent address contained in the Company’s records.

9.7.Binding Effect; Assignment; Third-Party Beneficiaries.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and any of their respective successors, personal representatives and permitted assigns who agree in writing to be bound by the terms hereof.  Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by the Optionee without the prior written consent of the Company.   

9.8.Amendments and Waivers.  Subject to applicable law, this Agreement and any of the provisions hereof may be amended, modified, supplemented or cancelled, in whole or in part, prospectively or retroactively, in each case by the Committee; provided that no such action shall adversely affect the Optionee’s rights under this Agreement without the Optionee’s consent.  The waiver by a party hereto of a breach by another party hereto of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach by such other party or as a waiver of any other or subsequent breach by such other party, except as otherwise explicitly provided for in the writing evidencing such waiver.  Except as otherwise expressly provided herein, no failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder, or otherwise available in respect hereof at law or in equity, shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.  

9.9.Counterparts.  This Agreement may be executed by .pdf or facsimile signatures and in any number of counterparts with the same effect as if all signatory parties had signed the same document.  All counterparts shall be construed together and shall constitute one and the same instrument.

9.10.Entire Agreement.  This Agreement and the Plan constitute the entire agreement between the parties, and supersede all prior agreements and understandings, oral and written, between the parties hereto with respect to the subject matter hereof.  In the event of a conflict between any term or provision contained in this Agreement and a term or provision of the Plan, the terms of the Plan shall govern. 

9.11.Withholding.  Whenever Option Shares are to be issued upon exercise of the Option, to satisfy the withholding amount (determined in accordance with applicable law, in each case, at up to the maximum statutory withholding rate if so elected by Optionee), the Company will (i) if so permitted by the Committee, withhold from the Option Shares otherwise issuable upon a Payment Date the number of Option Shares having a Fair Market Value equal to the withholding amount, (ii) arrange a broker-assisted “sell-to-cover” transaction, or (iii) permit the Optionee to provide to the Company an amount in cash in order to satisfy the withholding amount. 

9.12.No Right to Continued Employment or Business Relationship.  This Agreement shall not confer upon the Optionee any right with respect to continued employment or a continued business 

 

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relationship with the Company or any affiliate thereof, nor shall it interfere in any way with the right of the Company or any affiliate thereof to Terminate such Optionee at any time.

9.13.General Interpretive Principles.  Whenever used in this Agreement, except as otherwise expressly provided or unless the context otherwise requires, any noun or pronoun shall be deemed to include the plural as well as the singular and to cover all genders.  The headings of the sections, paragraphs, subparagraphs, clauses and subclauses of this Agreement are for convenience of reference only and shall not in any way affect the meaning or interpretation of any of the provisions hereof.  Unless otherwise specified, references herein to Sections refer to Sections of this Agreement.  Words of inclusion shall not be construed as terms of limitation herein, so that references to “include,” “includes” and “including” shall not be limiting and shall be regarded as references to non-exclusive and non-characterizing illustrations.

[signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, effective as of the Date of Grant.

 

			
	
EMERALD HOLDING, INC.

	
 
	
 
	
 

	
By:
	
 

	
 
	
Name: Mitchell Gendel

	
 
	
Title:   General Counsel and Corporate Secretary

 

		
	
Agreed and acknowledged as

	
of the Date of Grant:

	
 
	
 

	
 
	
 

	
Name: [GRANTEE NAME]

 

	
Shares Subject to the Option:

	
 
	
 
	
 
	
 

	
Option Price:

	
 
	
Tranche A Option Price:
	
$5.26 per Share

	
 
	
 
	
 

	
 
	
Tranche B Option Price:
	
$6.00 per Share

	
 
	
 
	
 

	
 
	
Tranche C Option Price:
	
$8.00 per Share

 

 

 

 

 

Exhibit A

 

EMERALD holding, inc.

NOTICE OF OPTION EXERCISE

Subject to the terms and conditions hereof, the undersigned (the “Purchaser”) hereby elects to exercise his or her option to purchase __________ shares (the “Shares”) of Emerald Holding, Inc. (the “Company”) under the Emerald Holding, Inc. 2017 Omnibus Equity Plan (the “Plan”) and the Stock Option Agreement dated as of _______________ (the “Option Agreement”).  The purchase price for the Shares shall be $______ per Share for a total purchase price of $[●] (subject to applicable withholding taxes).  

The Purchaser tenders herewith payment of the full Option Price in the form of (circle applicable method(s)):

(a)cash, by check or by wire transfer;

(b)with permission of the Committee, by utilizing a broker-assisted “cashless exercise”; or 

(c)with permission of the Committee, by reducing the number of Shares to be issued to him or her hereby by that number of Shares having an aggregate Fair Market Value on the date hereof equal to the aggregate purchase price of the Shares.  

The Purchaser will deliver any other documents that the Company requires in connection with this exercise election. 

In connection with the purchase of Shares, Purchaser represents and covenants the following:

1.Tax Withholding.  The Purchaser authorizes payroll withholding and will make arrangements satisfactory to the Company to pay or provide for any applicable federal, state and local withholding obligations of the Company in connection with the exercise of the Option set forth herein.  The Purchaser may satisfy any federal, state or local tax withholding obligation relating to the exercise of the Option by any of the methods set forth in the Option Agreement.  The Purchaser understands that ownership of the Shares will not be transferred to the Purchaser until the total Option Price and all applicable withholding taxes have been paid.

   

2.Knowledge and Representation.  The Purchaser is relying on his or her own business judgment and knowledge and the advice of his or her own counsel, tax advisors and other advisors, regarding the risks of an investment in the Company, in making the decision to purchase the Shares.  The Purchaser, either alone or with his or her advisors, has sufficient knowledge and experience in business and financial matters to evaluate the merits and risks of the purchase of the Shares and has the capacity to protect his or her own interests in connection with such purchase.  In furtherance of the foregoing, the Purchaser represents and warrants that (i) no representation or warranty, express or implied, whether written or oral, as to the financial condition, results of operations, prospects, properties or business of the Company or as to the desirability or value of an investment in the Company has been made to the Purchaser by or on behalf of the Company, and (ii) the Purchaser will continue to bear sole responsibility for making his or her own independent evaluation and monitoring of the risks of his or her investment in the Company.  In addition, the Purchaser understands that he or she is purchasing the Shares pursuant to the terms and conditions of the Plan and the Option Agreement, copies of which the Purchaser has read and understands.

 

 

 

3.Tax Consequences.  The Purchaser understands that he or she may suffer adverse tax consequences as a result of his or her purchase or disposition of the Shares.  The Purchaser represents that he or she has consulted any tax consultants he or she deems advisable in connection with the purchase or disposition of the Shares and that he or she is not relying on the Company for any tax advice.  Purchaser understands that, prior to the issuance of any Shares, Purchaser will have to make satisfactory arrangements with the Company to satisfy any withholding requirements applicable to the exercise of the option.

 

								
	
Please record the ownership of such Shares in the name of:

	
 

	
Name:
	
 

	
 
	
 

	
Address:
	
 

	
 
	
 

	
Social Security or Tax I.D. Number:
	
 

	
 
	
 

	
 
	
 

	
 
	
Signature:
	
 

	
 
	
 
	
 

	
Dated:
	
 
	
, 20

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