Document:

Exhibit
10.4

 

STOCK SUBSCRIPTION
AGREEMENT

 

STOCK SUBSCRIPTION AGREEMENT, dated as of April 7,
2004, between CDRV Investors, Inc., a Delaware corporation (the “Company”),
and Clayton, Dubilier & Rice Fund VI Limited Partnership, a Cayman Islands
exempted limited partnership (together with any other investment vehicle
managed by Clayton, Dubilier & Rice, Inc., the “Purchaser”).

 

W  I
T  N  E  S  S  E  T  H:

 

WHEREAS, pursuant to a Stock Purchase Agreement, dated
as of February 15, 2004, as amended from time to time (the “Stock Purchase
Agreement”), among Merck KGaA, Merck Holding GmbH, VWR International
Holding Europe GmbH, EMD Chemicals Inc. and CDRV Acquisition Corporation, an
indirect, wholly-owned subsidiary of the Company (“AcquisitionCo”),
AcquisitionCo has agreed to acquire all of the outstanding capital stock of VWR
International Corporation, a Delaware corporation (“VWR”), and all of
the outstanding equity ownership interests of VWR International Immobilien
GmbH, a German private limited liability company, not held directly or
indirectly by VWR (such transaction, the “Acquisition”);

 

WHEREAS, concurrently with the closing of the
Acquisition, the Company will issue 4,800,000 shares of its common stock, par
value $0.01 per share (the “Common Stock”), to the Purchaser, and up to
an aggregate of 700,000 shares of Common Stock to certain co-investors of the
Purchaser (the “Co-Investors”), pursuant to stock subscription
agreements between the Company, on the one hand, and each of the Purchaser and
the Co-Investors, on the other hand (collectively, the “Stock Subscription
Agreements”);

 

WHEREAS, the Purchaser desires to subscribe for and
purchase, and the Company desires to sell to the Purchaser, not less than
4,800,000 shares of Common Stock, at a subscription price of $100.00 per share;

 

NOW, THEREFORE, to implement the foregoing and in
consideration of the mutual agreements contained herein, the parties hereto
hereby agree as follows:

 

1.                                       Purchase
and Sale of Common Stock.

 

(a)                                  Purchase
of Common Stock.  Subject to all of
the terms and conditions of this Agreement, the Purchaser hereby subscribes for
and shall purchase, and the Company shall sell to the Purchaser, 4,800,000
shares of Common Stock (the “Shares”), at a subscription price of
$100.00 per Share, at the Closing provided for in Section 2(a) hereof.

 

 

(b)                                 Consideration.  Subject to all of the terms and conditions
of this Agreement, the Purchaser shall deliver to the Company at the Closing
referred to in Section 2(a) hereof immediately available funds in the amount of
$480,000,000.

 

2.                                       Closing.

 

(a)                                  Time
and Place.  Except as otherwise
mutually agreed by the Company and the Purchaser, the Closing (the “Closing”)
of the transaction contemplated by this Agreement shall be held at the offices
of Debevoise & Plimpton LLP, 919 Third Avenue, New York, New York at 9:00
a.m. (New York time) on April 7, 2004.

 

(b)                                 Delivery
by the Company.  At the Closing, the
Company shall deliver to the Purchaser a stock certificate registered in such
Purchaser’s name and representing the Shares, which certificate shall bear the
legend set forth in Section 4(b).

 

(c)                                  Delivery
by the Purchaser.  At the Closing,
the Purchaser shall deliver to the Company the consideration referred to in
Section 1(b).

 

3.                                       Management
Rights.  For so long as the
Purchaser owns any shares of the Common Stock of the Company and there has not
been an underwritten public offering of the Common Stock (other than a Special
Registration, as such term is defined in the Registration and Participation
Agreement referred to in Section 4(g)):

 

(a)                                  Election
of Directors.  The Company shall
vote, or shall cause the shares of its subsidiaries to be voted, for the
election of persons designated by the Purchaser (“Purchaser’s Designees”)
to serve as directors of the Company and each of CDRV Holdings, Inc., a
Delaware corporation and wholly-owned subsidiary of the Company (“Holdings”),
AcquisitionCo, CDRV Delaware, Inc., a Delaware corporation and wholly-owned
subsidiary of Holdings, CDRV International Holdings I, Inc., a Delaware
corporation and wholly-owned subsidiary of Holdings (to be renamed CDRV
International Holdings, Inc.) and CDRV International Holdings II, Inc., a
Delaware corporation and wholly-owned subsidiary of AcquisitionCo (to be
renamed VWR International Holdings, Inc.) and their respective subsidiaries and
successors in interest (collectively, the “VWR Companies”).  If at any time a vacancy is created on the
Board of Directors of the Company or any of the VWR Companies, by reason of the
death, removal or resignation of any of Purchaser’s Designees, the Company
shall take such action as may be required promptly to fill such vacancy with,
and shall vote, or shall cause the shares of its subsidiaries to be voted, for
the election of, a person designated by the Purchaser to fill such position.

 

(b)                                 Right
of Consultation.  The Purchaser
shall have the right, and the Company shall, and shall cause each of the VWR
Companies to, grant to the Purchaser the right, to consult with and advise the
management of the Company

 

 

and each of the VWR Companies, at any time or from
time to time, on all matters relating to the business, assets and operations of
the Company and the VWR Companies, including, without limitation, significant
changes in management personnel and compensation or employee benefits,
introduction of new products or new lines of business, expansion into new
geographical regions, acquisitions of any corporation, partnership or other
business entity or any division thereof or equity interest therein, important acquisitions
or dispositions of property, plant and equipment, significant research and
development programs, the purchase or sale of important patents, trademarks,
licenses and concessions, and the proposed compromise of any significant
litigation.

 

(c)                                  Observation
Rights.  The Purchaser shall have
the right, and the Company shall, and shall cause each of the VWR Companies to,
grant to the Purchaser the right, to have its representatives (in addition to
its representatives that are directors of such entities) attend meetings of the
Boards of Directors of the Company and each of the VWR Companies, and any
committees of any such Boards of Directors. 
The Company shall give, or shall cause each of the VWR Companies to give,
as appropriate, to the Purchaser (i) at least three days’ notice of each
regular meeting of the Board of Directors of the Company and each of the VWR
Companies, (ii) such notice as is necessary under the circumstances to
enable the Purchaser’s representatives to attend each special or emergency
meeting of the Board of Directors of the Company and each of the VWR Companies,
(iii) on or prior to the date of each meeting of the Board of Directors
of the Company and each of the VWR Companies, all information given to the
directors at such meeting and (iv) within 90 days following each meeting
of the Board of Directors of the Company and each of the VWR Companies, copies
of the minutes of such meeting.

 

(d)                                 Inspection
and Access.  The Company shall
provide to the Purchaser true and correct copies of all monthly, quarterly and
annual financial and operating reports and budgets prepared by or on behalf of
the Company and each of the VWR Companies, and such other documents, reports,
financial data and other information as the Purchaser may reasonably request.  The Company shall permit any authorized
representatives designated by the Purchaser to visit and inspect any of the
properties of the Company or any of its subsidiaries, including its and their
books of account (and to make copies and take extracts therefrom), and to
discuss its and their affairs, finances and accounts with its and their
officers and their current and prior independent public accountants (and by
this provision the Company authorizes such accountants to discuss with such
representatives the affairs, finances and accounts of the Company and its
subsidiaries, whether or not a representative of the Company is present), all
at such reasonable times and as often as the Purchaser may reasonably request.

 

 

4.                                       Purchaser’s
Representations, Warranties and Covenants.

 

(a)                                  Investment
Intention.  The Purchaser represents
and warrants that it is acquiring the Shares solely for its own account for
investment and not with a view to or for sale in connection with any
distribution thereof in any transaction or series of transactions that would be
in violation of the securities laws of the United States or any state
thereof.  The Purchaser agrees that it
will not, directly or indirectly, offer, transfer, sell, pledge, hypothecate or
otherwise dispose of any of the Shares (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of any Shares), except in compliance with
the Securities Act of 1933, as amended (the “Securities Act”), and the
rules and regulations of the Securities and Exchange Commission (the “Commission”)
thereunder, and in compliance with applicable state securities or “blue sky”
laws.  The Purchaser further
understands, acknowledges and agrees that none of the Shares may be
transferred, sold, pledged, hypothecated or otherwise disposed of unless (i)
(A) such disposition is pursuant to an effective registration statement
under the Securities Act, (B) the Purchaser shall have delivered to the
Company an opinion of counsel, which opinion and counsel shall be reasonably
satisfactory to the Company, to the effect that such disposition is exempt from
the provisions of Section 5 of the Securities Act, or (C) a no-action
letter from the Commission, reasonably satisfactory to the Company, shall have
been obtained with respect to such disposition and (ii) such disposition
is pursuant to registration under any applicable state securities laws or an
exemption therefrom.

 

(b)                                 Legend.  The Purchaser acknowledges that the
certificate or certificates representing the Shares shall bear the following
legend:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES
LAWS AND MAY NOT BE TRANSFERRED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS (i) (A) SUCH DISPOSITION IS PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
(B) THE HOLDER HEREOF SHALL HAVE DELIVERED TO THE COMPANY AN OPINION OF
COUNSEL, WHICH OPINION AND COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE
COMPANY, TO THE EFFECT THAT SUCH DISPOSITION IS EXEMPT FROM THE PROVISIONS OF
SECTION 5 OF SUCH ACT OR (C) A NO-ACTION LETTER FROM THE

 

 

SECURITIES AND EXCHANGE COMMISSION, REASONABLY
SATISFACTORY TO COUNSEL FOR THE COMPANY, SHALL HAVE BEEN OBTAINED WITH RESPECT
TO SUCH DISPOSITION AND (ii) SUCH DISPOSITION IS PURSUANT TO
REGISTRATION UNDER ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
THEREFROM.”

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
ENTITLED TO THE BENEFITS OF AND ARE BOUND BY THE OBLIGATIONS SET FORTH IN A
REGISTRATION AND PARTICIPATION AGREEMENT, DATED AS OF APRIL 7, 2004, AMONG THE
COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY, A COPY OF WHICH IS LOCATED AT THE
PRINCIPAL OFFICE OF THE COMPANY.”

 

(c)                                  Securities
Law Matters.  The Purchaser
acknowledges receipt of advice from the Company that (i) the Shares have
not been registered under the Securities Act or qualified under any state
securities or “blue sky” laws, (ii) it is not anticipated that there
will be any public market for the Shares, (iii) the Shares must be held
indefinitely and the Purchaser must continue to bear the economic risk of the
investment in the Shares unless the Shares are subsequently registered under
the Securities Act and such state laws or an exemption from registration is
available, (iv) Rule 144 promulgated under the Securities Act (“Rule
144”) is not presently available with respect to the sales of any
securities of the Company and the Company has made no covenant to make Rule 144
available, (v) when and if the Shares may be disposed of without
registration in reliance upon Rule 144, such disposition can be made only in
limited amounts in accordance with the terms and conditions of such Rule, if
the Purchaser is deemed to be an “affiliate” of the Company within the meaning
of Rule 144, (vi) the Company does not plan to file reports with the
Commission or make public information concerning the Company available unless
required to do so by law or by the terms of its financing agreements, (vii)
if the exemption afforded by Rule 144 is not available, sales of the Shares may
be difficult to effect because of the absence of public information concerning
the Company, (viii) a restrictive legend in the form heretofore set
forth shall be placed on the certificates representing the Shares and (ix)
a notation shall be made in the appropriate records of the Company indicating
that the Shares are subject to restrictions on transfer set forth in this Agreement
and, if the Company should in the future engage the services of a stock
transfer agent, appropriate stop-transfer restrictions will be issued to such
transfer agent with respect to the Shares.

 

 

(d)                                 Compliance
with Rule 144.  If any of the Shares
are to be disposed of in accordance with Rule 144, the Purchaser shall transmit
to the Company an executed copy of Form 144 (if required by Rule 144) no later
than the time such form is required to be transmitted to the Commission for
filing and such other documentation as the Company may reasonably require to
assure compliance with Rule 144 in connection with such disposition.

 

(e)                                  Ability
to Bear Risk.  The Purchaser
represents and warrants that (i) the financial situation of the
Purchaser is such that it can afford to bear the economic risk of holding the
Shares for an indefinite period and (ii) the Purchaser can afford to
suffer the complete loss of its investment in the Shares.

 

(f)                                    Access
to Information.  The Purchaser
represents and warrants that (i) it has participated in the preparation
and negotiation of the Acquisition Agreement and has carefully reviewed all of
the materials furnished to it in connection with the transactions contemplated
thereby and hereby, (ii) it has been granted the opportunity to ask
questions of, and receive answers from, representatives of the Company
concerning the terms and conditions of the purchase of the Shares and to obtain
any additional information that it deems necessary to verify the accuracy of
the information contained in such material, and (iii) its knowledge and
experience in financial and business matters is such that it is capable of
evaluating the risks of the investment in the Shares.

 

(g)                                 Registration
and Participation Agreement.  The
Purchaser acknowledges and agrees that it shall be entitled to the rights and
subject to the obligations created under the Registration and Participation
Agreement, dated as of the date hereof, among the Company, the Purchaser, the
Co-Investors and the other parties thereto (the “Registration and
Participation Agreement”), and that the Shares shall constitute Registrable
Securities (as defined in the Registration and Participation Agreement)
thereunder.  The Purchaser agrees that,
in the event that the Company files a registration statement under the
Securities Act with respect to an underwritten public offering of any shares of
its capital stock, the Purchaser will not effect any public sale or
distribution of any shares of the Common Stock (other than as part of such
underwritten public offering) during the Holdback Period (as defined in the
Registration and Participation Agreement).

 

5.                                       Representations
and Warranties of the Company.  The
Company represents and warrants to the Purchaser that (a) the Company
has been duly incorporated and is in good standing under the laws of State of
Delaware, (b) this Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding obligation
of the Company enforceable against the Company in accordance with its terms, (c)
the Shares, when issued and delivered in accordance with the terms hereof, will
be duly authorized, validly issued, fully paid and nonassessable, and free and
clear of any liens or encumbrances other than those created pursuant to this
Agreement or otherwise in connection with the transactions contemplated hereby
and (d) the authorized capital stock of the Company consists of
7,000,000 shares of Common

 

 

Stock, of which 5,500,000 shares of Common Stock will be issued and outstanding
upon the consummation of the transactions contemplated by the Stock
Subscription Agreements.  The Company
fully anticipates that the Acquisition will be consummated promptly following
the Closing.

 

6.                                       Covenants
of the Company.

 

(a)                                  Rule
144.  The Company agrees that at all
times after it has filed a registration statement pursuant to the requirements
of the Securities Act or Section 12 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), relating to any class of equity securities
of the Company (other than (i) the registration of equity securities of
the Company and/or options in respect thereof to be offered primarily to
directors and members of management and employees of the Company or its direct
or indirect subsidiaries, or (ii) the registration of equity securities
and/or options in respect thereof solely on Form S-4 or S-8 or any successor
form), it will file the reports required to be filed by it under the Securities
Act and the Exchange Act and the rules and regulations adopted by the
Commission thereunder (or, if the Company is not required to file such reports,
it will, upon the request of the Purchaser, make publicly available such
information as necessary to permit sales pursuant to Rule 144 under the
Securities Act), and will take such further action as the Purchaser may
reasonably request, all to the extent required from time to time to enable the
Purchaser to sell Shares without registration under the Securities Act within
the limitation of the exemptions provided by (x) Rule 144, as such Rule
may be amended from time to time, or (y) any successor rule or
regulation hereafter adopted by the Commission.

 

(b)                                 State
Securities Laws.  The Company agrees
to use its best efforts to comply with all state securities or “blue sky” laws
applicable to the sale of the Shares to the Purchaser.

 

(c)                                  Expenses.  Whether or not the Closing occurs, the
Company hereby agrees to pay all expenses relating to this Agreement, including
but not limited to (i) the cost of printing, reproducing and
distributing this Agreement, the Shares and any associated documents, (ii)
the Purchaser’s reasonable out-of-pocket expenses incurred in connection with
this Agreement, the Shares and any associated documents, (iii) the
reasonable fees and disbursements of the Purchaser’s counsel, (iv) the
cost of delivering the Shares purchased at the Closing, insured to the
satisfaction of the Purchaser, to such address as the Purchaser shall
designate, (v) all reasonable out-of-pocket expenses relating to any
amendment or modification of, or any waiver, consent or preservation of rights
under, this Agreement and (vi) all other expenses, including counsel’s
fees, incurred by the Company in connection with the transactions contemplated
by this Agreement or any other agreements or documents entered into in
connection with the Acquisition.

 

 

7.                                       Miscellaneous.

 

(a)                                  Notices.  All notices, demands and other
communications made in connection with this Agreement shall be in writing.  Any notice or other communication in connection
herewith shall be deemed duly given to any party (i) two business days
after it is sent by express, registered or certified mail, return receipt
requested, postage prepaid or (ii) one business day after it is sent by
overnight courier guaranteeing next day delivery, in each case, to the
addresses set forth below:

 

(i)                                     if
to the Company, to:

 

CDRV Investors, Inc.

1403 Foulk Road, Suite 106

Wilmington, Delaware 
19803

Attention:  Secretary

 

(ii)                                  if
to the Purchaser, to:

 

Clayton, Dubilier & Rice

Fund VI Limited Partnership

1403 Foulk Road, Suite 106

Wilmington, Delaware 
19803

Attention:  General Partner

 

Copies of any notice or other communication given under this Agreement
shall also be given to:

 

(i)                                     Clayton,
Dubilier & Rice, Inc.

375 Park Avenue

New York, New York 
10152

Telephone: 
(212) 407-5200

Facsimile: 
(212) 407-5252

Attention:  Richard J. Schnall

 

and

 

(ii)                                  Debevoise
& Plimpton LLP

919 Third Avenue

New York, New York 
10022

Telephone: 
(212) 909-6000

Facsimile: 
(212) 909-6836

Attention:  Franci J. Blassberg, Esq.

 

 

(b)                                 Binding
Effect; Benefits.  This Agreement
shall be binding upon and inure to the benefit of the parties to this Agreement
and their respective successors and assigns. 
Nothing in this Agreement, express or implied, is intended or shall be
construed to give any person other than the parties to this Agreement or their
respective successors or assigns any legal or equitable right, remedy or claim
under or in respect of any agreement or any provision contained herein.

 

(c)                                  Waiver;
Amendment.

 

(i)                                     Waiver.  Either party hereto may by written notice to
the other (A) extend the time for the performance of any of the
obligations or other actions of the other under this Agreement, (B)
waive compliance with any of the conditions or covenants of the other contained
in this Agreement and (C) waive or modify performance of any of the
obligations of the other under this Agreement. 
Except as provided in the preceding sentence, no action taken pursuant
to this Agreement, including, without limitation, any investigation by or on
behalf of either party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties,
covenants or agreements contained herein. 
The waiver by either party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any preceding or
succeeding breach and no failure by either party to exercise any right or
privilege hereunder shall be deemed a waiver of such party’s rights or
privileges hereunder or shall be deemed a waiver of such party’s rights to
exercise the same at any subsequent time or times hereunder.

 

(ii)                                  Amendment.  This Agreement may be amended, modified or
supplemented only by a written instrument executed by the Purchaser and the
Company.

 

(d)                                 Assignability.  Neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by the Company or the Purchaser without the prior written consent of
the other party.  Notwithstanding
anything to the contrary in the immediately preceding sentence, the Company may
assign this Agreement in connection with a merger, reorganization or sale,
transfer or contribution of all or substantially all of the assets or stock of
the Company to any of its subsidiaries or affiliates, and, upon the
consummation of any such merger, reorganization, sale, transfer or
contribution, such subsidiary or affiliate shall automatically and without
further action assume all of the obligations and succeed to all the rights of
the Company under this Agreement.

 

(e)                                  Applicable
Law.  This Agreement shall be
governed by and construed in accordance with the law of the State of New York,
regardless of the law that might be applied under principles of conflict of
laws to the extent such principles would require or permit the application of
the laws of another jurisdiction.

 

 

(f)                                    Section
and Other Headings, etc.  The
section and other headings contained in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this Agreement.

 

(g)                                 Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which together shall constitute one and the same instrument.

 

[The remainder of this
page is intentionally left blank.]

 

 

IN WITNESS WHEREOF, the Company and the Purchaser have
duly executed this Agreement by their authorized representatives as of the date
first above written.

 

	
   

  	
  CDRV INVESTORS, INC

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ RICHARD J. SCHNALL

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Richard J. Schnall

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CLAYTON, DUBILIER & RICE

  FUND VI LIMITED PARTNERSHIP

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  CD&R Associates VI Limited Partnership,

  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  CD&R Investment Associates VI, Inc.,

  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ THERESA A. GORE

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Theresa A. Gore

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President, Treasurer, and Assistant SecretaryExhibit 10.5

 

VWR
International, Inc. Directors Compensation Policy

 

•                                          Compensation Generally. 
For each full calendar year of participation on the Board of Directors
(the “Board”)
of VWR International, Inc., an Eligible Director will receive (i)
Seventy Thousand Dollars ($70,000) per year (“Base Compensation”), payable quarterly
in arrears half in cash and half in shares of Common Stock of CDRV Investors,
Inc., the indirect parent of VWR International, (as such terms are defined the
CDRV Investors, Inc. Stock Incentive Plan (the “Plan”)), (ii) Fifteen Thousand
Dollars ($15,000) per year, payable in cash annually in arrears, for service as
the chairperson of the Audit Committee of the Board, and (iii) Ten
Thousand Dollars ($10,000) per year, payable in cash annually in arrears, for
service as the chairperson of any other committee established by the Board,
including but not limited to the Compensation Committee, the Executive
Committee, and the Nominating and Governance Committee.   Any cash payable to an Eligible Director
hereunder shall be paid as soon as reasonably practicable after the close of
the applicable period.  All shares of
Common Stock shall be subject to the terms and conditions of this Policy and
the Plan (including, without limitation, Article VII thereof) and, in the event
of a conflict between any term of this Policy and the terms of the Plan, the
terms of this Policy shall control.

•                                          Definition of Eligible Director. 
For purposes of this Policy, an “Eligible Director” shall mean a director of
the Company (i) who is neither an officer nor an employee of the
Company, (ii) if a consulting agreement with Clayton Dubilier &
Rice, Inc. (“CD&R”)
or one of its affiliates is then in effect, who is not an employee of CD&R,
and (iii) in each case, who is not serving as a director of the Company
at the request of his or her employer.

•                                          Partial Year Service. 
In the event that an Eligible Director’s service to the Board or any
committee commences or terminates after the beginning of a calendar year, such
Eligible Director will only be entitled to receive a pro rata portion of his or
her annual compensation under this Policy.

•                                          Deferral Elections. 
An Eligible Director may elect to defer receipt of a percentage in
excess of 50% up to a maximum of 100% of any Base Compensation payable in
respect of such Eligible Director’s future services (a “Deferral Election”)
and, in lieu thereof, receive additional shares represented by Common Shares
that shall be subject to the terms and conditions of this Policy and the Plan.

•                                          Timing of Deferral Elections. 
A Deferral Election may be made (i) on or before December 31
of any calendar year in respect of the calendar year following the year in
which such election is made, and (ii) for any Eligible Director who
becomes a director after the beginning of a calendar year, within 30 days
following an Eligible Director’s election as a director with respect to Base
Compensation to be earned in any calendar quarter within the calendar year in
which such Eligible Director becomes a director and subsequent to the calendar
quarter in which such Eligible Director becomes a director.

 

1

  

 

•                                          Form and Duration of Deferral Election. 
A Deferral Election shall be made by written notice delivered to the
Company.  Such Deferral Election shall
continue in effect unless and until the Eligible Director revokes or modifies
such Deferral Election by written notice delivered to the Company.  Any such revocation or modification of a
Deferral Election shall become effective as of the end of the calendar year in
which such notice is given and only with respect to any compensation to be
payable to such Eligible Director in respect of such Director’s services in
subsequent calendar years; provided that no Deferral Election and no revocation
or modification of a Deferral Election shall be effective if it is delivered
within six months of any prior Deferral Election or revocation or modification
of a Deferral Election.  Common Shares
credited to the Eligible Director’s Stock Account (as defined below) prior to
the effective date of any such revocation or modification of a Deferral
Election shall not be affected by such revocation or modification and shall be
distributed only in accordance with the otherwise applicable terms of this
Policy or the Plan.  An Eligible Director
who has revoked a Deferral Election may deliver to the Company a new Deferral
Election to defer Base Compensation no sooner than in the calendar year following
the year in which such new Deferral Election is delivered.  The Company reserves the right to change the
ability of Eligible Directors to revoke or modify their Deferral Elections.

•                                          Stock Accounts. 
Any shares of Common Stock received by an Eligible Director under the
terms of this Policy (including any Base Compensation deferred pursuant to a
Deferral Election) shall be credited, in whole or in part, to a memorandum
account (the “Stock
Account”) established to record the number of shares of Common
Stock (as defined in the Plan) payable to an Eligible Director under this
Policy.  The number of shares of Common
Stock credited to an Eligible Director’s Stock Account as of the close of each
calendar quarter shall, as determined by the Board or the Nominating and
Governance Committee, be equal to the quotient of (x) the amount of Base
Compensation so deferred as of the end of such quarter divided by (y) the
Fair Market Value (as such term is defined in the Plan) of one share of Common
Stock as of the end of such quarter. 
Each Eligible Director shall receive from the Company on an annual basis
(or more frequently as may be determined by the Board or the Nominating and
Governance Committee), an accounting of such Eligible Director’s Stock
Account.  An Eligible Director shall be
fully vested in his or her Common Stock and Stock Account at all times.

•                                          Dividends/Distributions; Other
Adjustments.  Whenever a dividend other than a dividend
payable in the Company’s capital stock is declared with respect to the Common
Stock, the number of shares of Common Stock in the Eligible Director’s Stock
Account shall be increased by the number of shares of Common Stock, as
determined on the related dividend record date, equal to the quotient of (x) the
product of (A) the number of shares of Common Stock in the Eligible
Director’s Stock Account and (B) the amount of any cash dividend
declared by the Company on a share of Common Stock (or, in the case of any
dividend distributable in property other than the Company’s capital stock, the
per share value of such 

 

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                                                dividend, as determined by the Company
for purposes of income tax reporting), divided by (y) the Fair
Market Value.  In the case of any
dividend declared on the Common Stock which is payable in the Company’s capital
stock, the Eligible Director’s Stock Account shall be increased by the number
of shares of Common Stock, as determined on the related dividend payment date,
equal to the product of (i) the number of shares of Common Stock
previously credited to the Eligible Director’s Stock Account and (ii) the
number of shares of the Company’s capital stock (including any fraction
thereof) distributable as a dividend on one share of Common Stock.  In the event of any change in the number or
kind of outstanding shares by reason of any recapitalization, reorganization,
merger, consolidation, stock split or any similar change affecting the shares,
other than a stock dividend as provided above, the Board or the Nominating and
Governance Committee shall make an appropriate adjustment in the number of
shares of Common Stock credited to the Eligible Director’s Stock Account.  Fractional Units shall be credited, but shall
be rounded to the nearest whole share, with amounts equal to or greater than
0.5 rounded up and amounts less than 0.5 rounded down.

•                                          Distribution from Stock Account Upon
Termination of Service as a Director.  Distributions
from an Eligible Director’s Stock Account shall occur on or as soon as
reasonably practicable after the six-month anniversary of the date on which the
Eligible Director ceases to be a director of the Company.  Distributions from such Stock Account shall
be made in one lump-sum payment in the form of the greatest number of whole
shares of Common Stock having a Fair Market Value at such time equal to or less
than the aggregate value of the Common Stock to be distributed at such time
(with any fractional interest payable in cash). 
Unless and until the Company issues a certificate or certificates to an
Eligible Director representing shares of Common Stock in respect of his or her
Common Stock, the Common Stock (or the Stock Account) may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated.  Any attempt by a Participant, directly or
indirectly, to offer, transfer, sell, pledge, hypothecate or otherwise dispose
of any Common Stock (or his or her Stock Account) or any interest therein or
any rights relating thereto without complying with the provisions of the Policy
or the Plan shall be void and of no effect.

•                                          Termination for Cause. 
In the event that an Eligible Director’s service as a director of the
Company is terminated for Cause (as such term is defined in the Plan), all
Common Stock credited to such Eligible Director shall terminate and be canceled
immediately upon such termination of service.

 

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