Form 8-K
8-K — Madison Air Solutions Corp
Accession: 0001193125-26-161509
Filed: 2026-04-17
Period: 2026-04-15
CIK: 0002098430
SIC: 3564 (INDUSTRIAL & COMMERCIAL FANS & BLOWERS & AIR PURIFYING EQUIP)
Item: Entry into a Material Definitive Agreement
Item: Unregistered Sales of Equity Securities
Item: Material Modifications to Rights of Security Holders
Item: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
Item: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
Item: Other Events
Item: Financial Statements and Exhibits
Documents
8-K — ck0002098430-20260415.htm (Primary)
EX-1.1 (ck0002098430-ex1_1.htm)
EX-3.1 (ck0002098430-ex3_1.htm)
EX-3.2 (ck0002098430-ex3_2.htm)
EX-4.1 (ck0002098430-ex4_1.htm)
EX-10.1 (ck0002098430-ex10_1.htm)
EX-10.2 (ck0002098430-ex10_2.htm)
EX-10.3 (ck0002098430-ex10_3.htm)
EX-10.4 (ck0002098430-ex10_4.htm)
EX-10.5 (ck0002098430-ex10_5.htm)
EX-10.6 (ck0002098430-ex10_6.htm)
EX-10.7 (ck0002098430-ex10_7.htm)
EX-10.9 (ck0002098430-ex10_9.htm)
EX-10.10 (ck0002098430-ex10_10.htm)
EX-10.11 (ck0002098430-ex10_11.htm)
EX-99.1 (ck0002098430-ex99_1.htm)
XML — IDEA: XBRL DOCUMENT (R1.htm)
8-K
8-K (Primary)
Filename: ck0002098430-20260415.htm · Sequence: 1
8-K
0002098430--12-31false00020984302026-04-152026-04-15
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 15, 2026
Madison Air Solutions Corporation
(Exact name of registrant as specified in its charter)
Delaware
001-43236
41-2529345
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
444 West Lake Street, Suite 4460
Chicago, IL
60606
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (312) 262-6374
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange
on which registered
Class A common stock, par value $0.0000001 per share
MAIR
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On April 15, 2026, Madison Air Solutions Corporation (the “Company”) priced the initial public offering (“IPO”) of its Class A common stock, par value $0.0000001 per share (the “Class A Common Stock”), at an offering price of $27.00 per share (the “IPO Price”), pursuant to the Company’s registration statement on Form S-1 (File No. 333-294156), as amended (the “Registration Statement”). On April 15, 2026, in connection with the pricing of the IPO, the Company and Madison Industries IAQ Solutions Corporation (“MIAQ Solutions”), a wholly owned subsidiary of the Company, entered into an underwriting agreement (the “Underwriting Agreement”) with Goldman Sachs & Co. LLC, Barclays Capital Inc., Jefferies LLC and Wells Fargo Securities, LLC, as representatives of the several underwriters listed on Schedule I thereto (collectively, the “Underwriters”), pursuant to which the Company agreed to offer and sell 82,692,308 shares of its Class A Common Stock at the IPO Price. The Underwriters were granted a 30-day option to purchase up to an additional 12,403,846 shares of Class A Common Stock from the Company. The Underwriters exercised their option to purchase additional shares in full on April 16, 2026. The offering closed and the shares were delivered on April 17, 2026 (the “Closing Date”). The material terms of the offering are described in the prospectus, dated April 15, 2026 (the “Prospectus”), filed by the Company with the U.S. Securities and Exchange Commission (the “Commission”) on April 17, 2026, pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”). The IPO is registered with the Commission pursuant to the Registration Statement.
The Underwriting Agreement contains customary representations and warranties, agreements and obligations, closing conditions and termination provisions. The Company has agreed to indemnify the Underwriters against (or contribute to the payment of) certain liabilities, including liabilities under the Securities Act. This description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Underwriting Agreement attached hereto as Exhibit 1.1, which is incorporated by reference into this Item 1.01. Additionally, for a summary description of relationships between the Company and the Underwriters, see the section entitled “Underwriting” in the Prospectus.
In connection with the IPO, the Company entered into the following additional agreements:
•
the Registration Rights Agreement, dated as of April 15, 2026, by and among the Company, Madison Industries Holdings LLC (“Holdings”), K.C. Armada, LP and Kedge Capital Principal Opportunities V, LP (together, “Kedge”), a copy of which is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated by reference herein;
•
the Director Nomination Agreement, dated as of April 15, 2026, by and between the Company and Holdings, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein;
•
the Separation Agreement, dated as of April 15, 2026, by and among the Company, Holdings, Madison Industries International Holdings LLC (“International Holdings”) and Madison Industries US Holdings Corp., a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated by reference herein;
•
the Tax Matters Agreement, dated as of April 15, 2026, by and between the Company and International Holdings, a copy of which is filed as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated by reference herein;
•
the Transition Services Agreement, dated as of April 15, 2026, by and between the Company and International Holdings, a copy of which is filed as Exhibit 10.4 to this Current Report on Form 8-K and is incorporated by reference herein;
•
the Lock-Up Agreements, each dated as of April 15, 2026, by and between the Company and Holdings and Kedge, copies of which are filed as Exhibits 10.5, 10.6 and 10.7 to this Current Report on Form 8-K and are incorporated by reference herein; and
•
the Indemnification Agreements, each dated on or around April 15, 2026, by and between the Company and each of its directors and executive officers, the form of which is filed as Exhibit 10.8 to this Current Report on Form 8-K and is incorporated by reference herein.
Descriptions of these agreements are contained in the Prospectus in the section entitled “Certain Relationships and Related Party Transactions” and are incorporated by reference into this Item 1.01. Such descriptions do not purport to be complete and are qualified in their entirety by reference to the full text of each of the agreements attached hereto as Exhibit 4.1, and Exhibits 10.1 to 10.8, which are incorporated by reference into this Item 1.01.
Item 3.02. Unregistered Sales of Equity Securities.
In connection with the consummation of the IPO and on April 15, 2026, the Company sold (i) an aggregate of 44,841,071 shares of Class A Common Stock to Kedge, (ii) an aggregate of 14,311,991 shares of Class A Common Stock to certain unaffiliated institutional investors, (iii) an aggregate of 12,299,462 shares of Class A Common Stock to certain unaffiliated investors and (iv) an aggregate of 10,339,435 shares of Class A Common Stock to certain of the Company’s executive officers, including Jill Wyant, JJ Foley and Jeffrey Krautkramer, and certain other current employees and consultants of the Company, in each case in exchange for LLC units of certain subsidiaries of the Company. Additionally, in connection with the consummation of the IPO, on April 15, 2026, the Company sold 320,676,155 shares of the Company’s Class B common stock, par value $0.0000001 per share (the “Class B Common Stock”), to Holdings in exchange for all of the issued and outstanding shares of capital stock of MIAQ Solutions. The information provided under Item 5.03 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The issuances of the Class A Common Stock and Class B Common Stock described in this paragraph were made in reliance on Section 4(a)(2) of the Securities Act, and Rule 506 promulgated thereunder.
Additionally, in connection with the consummation of the IPO, on April 15, 2026, the Company issued 146,556 Equity Appreciation Rights Units (“EAR Units”) to certain former employees and consultants of the Company in respect of, and subject to the same vesting terms as, pre-IPO awards held by such former employees and consultants. The issuances of the EAR Units described in this paragraph were made in reliance on Regulation D under the Securities Act.
Further, in connection with the consummation of the IPO, on April 15, 2026, the Company sold 3,703,704 shares of Class B Common Stock at a price per share equal to the IPO Price to Holdings in a concurrent private placement. The issuance of Class B Common Stock in the concurrent private placement described in this paragraph was made in reliance on Section 4(a)(2) of the Securities Act.
Item 3.03. Material Modification to Rights of Security Holders.
The information provided under Item 5.03 of this Current Report on Form 8-K is incorporated by reference into this Item 3.03.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On April 15, 2026, Hudson La Force, George Nolen and Jill Wyant were appointed to the Company’s board of directors. Biographical information and other information regarding the committees upon which these directors are expected to serve, related party transactions involving any of these directors, the compensation plans in which such directors participate, and information about any arrangement or understanding between such director and any other persons pursuant to which such director was selected as a director was previously reported in the Prospectus in the sections entitled “Certain Relationships and Related Party Transactions” and “Management” and is incorporated by reference into this Item 5.02.
On or after April 15, 2026, in connection with the IPO, the Company entered into indemnification agreements with each of its directors and executive officers. These agreements provide the Company’s directors and executive officers with contractual rights to indemnification, expense advancement and reimbursement, to the fullest
extent permitted under the Delaware General Corporation Law. These indemnification rights are not exclusive of any other right that an indemnified person may have or hereafter acquire under any statute, provision of the Company’s Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws (each as defined below), any agreement, or vote of stockholders or disinterested directors or otherwise. This description of the indemnification agreements does not purport to be complete and is qualified in its entirety by reference to the form of indemnification agreement attached hereto as Exhibit 10.8, which is incorporated by reference into this Item 5.02.
Additionally, on April 15, 2026 and in connection with the IPO, the Company adopted the Madison Air Solutions Corporation 2026 Omnibus Incentive Plan (the “Omnibus Plan”) and Madison Indoor Air Solutions LLC (“Madison IAS”), an indirect wholly owned subsidiary of the Company, adopted the Second Amended and Restated Equity Appreciation Plan (the “Second A&R EAR Plan”). Also on April 15, 2026, the Company assumed the Third Amended and Restated Equity Appreciation Plan of Madison Air Solutions Corporation (the “Third A&R EAR Plan”), which will become effective upon filing of the Company’s Registration Statement on Form S-8. Descriptions of the Omnibus Plan, the Second A&R EAR Plan and the Third A&R EAR Plan are contained in the Prospectus in the sections entitled “Executive Compensation—Compensation in Connection with This Offering” and “Executive Compensation—Pay Mix—Long-Term Incentive Compensation,” and are incorporated by reference into this Item 5.02. Such descriptions do not purport to be complete and are qualified in their entirety by reference to the full text of the Omnibus Plan, the Second A&R EAR Plan and the Third A&R EAR Plan attached hereto as Exhibits 10.9, 10.10 and 10.11, respectively, which are incorporated by reference into this Item 5.02.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On April 15, 2026, the Company filed an amended and restated certificate of incorporation (the “Amended and Restated Certificate of Incorporation”) with the Secretary of State of the State of Delaware and adopted amended and restated bylaws (the “Amended and Restated Bylaws”), each of which became effective on April 15, 2026. A description of the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws is contained in the Prospectus in the section entitled “Description of Capital Stock” and is incorporated by reference into this Item 5.03. Such description does not purport to be complete and is qualified in its entirety by reference to the full text of the Amended and Restated Certificate of Incorporation attached hereto as Exhibit 3.1 and the copy of the Amended and Restated Bylaws attached hereto as Exhibit 3.2, both of which are incorporated by reference into this Item 5.03.
Item 8.01. Other Events.
On April 15, 2026, the Company issued a press release announcing pricing of the IPO, a copy of which is attached as Exhibit 99.1 hereto and incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits.
Exhibit No.
Description
1.1
Underwriting Agreement, dated as of April 15, 2026, by and among Madison Air Solutions Corporation, Madison Industries IAQ Solutions Corporation, Goldman Sachs & Co. LLC, Barclays Capital Inc., Jefferies LLC and Wells Fargo Securities, LLC, as representatives of the several underwriters named in Schedule I thereto.
3.1
Amended and Rested Certificate of Incorporation of Madison Air Solutions Corporation.
3.2
Amended and Restated Bylaws of Madison Air Solutions Corporation.
4.1
Registration Rights Agreement, dated as of April 15, 2026, by and among Madison Air Solutions Corporation, Madison Industries Holdings LLC and the other stockholders party thereto.
10.1
Director Nomination Agreement, dated as of April 15, 2026, by and between Madison Air Solutions Corporation and Madison Industries Holdings LLC.
10.2
Separation Agreement, dated as of April 15, 2026, by and among Madison Air Solutions Corporation, Madison Industries Holdings LLC, Madison Industries International Holdings LLC and Madison Industries US Holdings Corp.
10.3
Tax Matters Agreement, dated as of April 15, 2026, by and between Madison Air Solutions Corporation and Madison Industries International Holdings LLC.
10.4
Transition Services Agreement, dated as of April 15, 2026, by and between Madison Air Solutions Corporation and Madison Industries International Holdings LLC.
10.5
Lock-Up Agreement, by and between Madison Industries Holdings LLC and Madison Air Solutions Corporation.
10.6
Lock-Up Agreement, by and between Kedge Capital Principal Opportunities V LP and Madison Air Solutions Corporation.
10.7
Lock-Up Agreement, by and between KC Armada LP and Madison Air Solutions Corporation.
10.8
Form of Indemnification Agreement between Madison Air Solutions Corporation and each of its directors and executive officers (incorporated by reference to Exhibit 10.20 to the Company’s Registration Statement on Form S-1 filed with the Commission on March 16, 2026).
10.9
Madison Air Solutions Corporation 2026 Omnibus Incentive Plan.
10.10
Second Amended and Restated Equity Appreciation Plan of Madison Indoor Air Solutions LLC.
10.11
Third Amended and Restated Equity Appreciation Plan of Madison Air Solutions Corporation.
99.1
Press Release, dated April 15, 2026.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MADISON AIR SOLUTIONS CORPORATION
Date: April 17, 2026
By:
/s/ John Lavorato
John Lavorato
General Counsel
EX-1.1
EX-1.1
Filename: ck0002098430-ex1_1.htm · Sequence: 2
EX-1.1
Exhibit 1.1
Execution Version
Madison Air Solutions Corporation
Class A Common Stock, par value $0.0000001 per share
_______________________________
Underwriting Agreement
April 15, 2026
Goldman Sachs & Co. LLC
Barclays Capital Inc.
Jefferies LLC
Wells Fargo Securities, LLC
As representatives (the “Representatives”) of the several Underwriters
named in Schedule I hereto,
c/o Goldman Sachs & Co. LLC
200 West Street,
New York, New York 10282-2198
c/o Barclays Capital Inc.
745 Seventh Avenue
New York, New York 10019
c/o Jefferies LLC
520 Madison Avenue
New York, New York 10022
c/o Wells Fargo Securities, LLC
500 West 33rd Street, 14th Floor
New York, New York 10001
Ladies and Gentlemen:
Madison Air Solutions Corporation, a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated in this agreement (this “Agreement”), to issue and sell to the Underwriters named in Schedule I hereto (the “Underwriters”) an aggregate of 82,692,308 shares (the “Firm Shares”) and, at the election of the Underwriters, up to 12,403,846 additional shares (the “Optional Shares”) of Class A Common Stock, par value $0.0000001 per share (“Stock”), of the Company (the Firm Shares and the Optional Shares that the Underwriters elect to purchase pursuant to Section 2 hereof are herein collectively called the “Shares”).
In connection with the offering contemplated by this Agreement, the “Organizational Transactions” (as such term is defined in the Registration Statement and the Pricing Disclosure Package (each as defined below) in the section titled “Organizational Transactions”) were or will be effected prior to the First Time of Delivery (as defined in Section 4 hereof), pursuant to which the Company will become the holder of all outstanding equity interests of Madison Industries IAQ Solutions Corporation (“MIAQ Solutions”). The Separation Agreement, Tax Matters Agreement and Transition Services Agreement (each as defined in the Pricing Prospectus) are referred to herein collectively as the “Organizational Agreements.”
As described in the Pricing Prospectus and the Prospectus, pursuant to a stock subscription agreement between the Company and Madison Industries Holdings LLC (“Holdings”), entered into on or about the date hereof, the Company has agreed to issue to Holdings, in a privately negotiated transaction, an aggregate of up to $100.0 million of Class B Common Stock, par value $0.0000001 per share (“Class B Shares”) of the Company (such Class B Shares, the “Private Placement Shares”, and such transaction, the “Concurrent Private Placement”) at a price per Private Placement Share of $27.00. The Offering is not conditioned on the consummation of the Concurrent Private Placement.
1. Each of the Company and MIAQ Solutions (each, a “MAIR Party” and collectively, the “MAIR Parties”) jointly and severally represents and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-294156) (the “Initial Registration Statement”) in respect of the Shares has been filed with the Securities and Exchange Commission (the “Commission”); the Initial Registration Statement and any post‑effective amendment thereto, each in the form heretofore delivered to you, have been declared effective by the Commission in such form; other than a registration statement, if any, increasing the size of the offering (a “Rule 462(b) Registration Statement”), filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Act”), which became effective upon filing, no other document with respect to the Initial Registration Statement has been filed with the Commission; and no stop order suspending the effectiveness of the Initial Registration Statement, any post-effective amendment thereto or the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose or pursuant to Section 8A of the Act has been initiated or, to the Company’s or MIAQ Solutions’ knowledge, threatened by the Commission (any preliminary prospectus included in the Initial Registration Statement or filed with the Commission pursuant to Rule 424(a) under the Act is hereinafter called a “Preliminary Prospectus”; the various parts of the Initial Registration Statement and the Rule 462(b) Registration Statement, if any, including all exhibits thereto and including the information contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of the Initial Registration Statement at the time it was declared effective, each as amended at the time such part of the Initial Registration Statement became effective or such part of the Rule 462(b) Registration Statement, if any, became or hereafter becomes effective, are hereinafter collectively called the “Registration Statement”; the Preliminary Prospectus relating to the Shares that was included in the Registration Statement immediately prior to the Applicable Time (as defined in Section 1(c) hereof) is hereinafter called the “Pricing Prospectus”; such final prospectus, in the form first filed pursuant to Rule 424(b) under the Act, is hereinafter called the “Prospectus”; any oral or written communication with potential investors undertaken in reliance on Rule 163B under the Act is hereinafter called a “Testing-the-Waters Communication”; any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Act is hereinafter called a “Written Testing-the-Waters Communication”; and any “issuer free writing prospectus” as defined in Rule 433 under the Act relating to the Shares is hereinafter called an “Issuer Free Writing Prospectus”);
(b) (A) No order preventing or suspending the use of any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission, and (B) each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which
2
they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with the Underwriter Information (as defined in Section 9(b) of this Agreement);
(c) For the purposes of this Agreement, the “Applicable Time” is 4:11 p.m. (Eastern time) on the date of this Agreement. The Pricing Prospectus, as supplemented by the information listed on Schedule II(c) hereto, taken together (collectively, the “Pricing Disclosure Package”), as of the Applicable Time, did not, and as of each Time of Delivery (as defined in Section 4(a) of this Agreement) will not, include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus and each Written Testing-the-Waters Communication does not conflict with the information contained in the Registration Statement, the Pricing Prospectus or the Prospectus and each Issuer Free Writing Prospectus and each Written Testing-the-Waters Communication, as supplemented by and taken together with the Pricing Disclosure Package, as of the Applicable Time, did not, and as of each Time of Delivery will not, include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements or omissions made in reliance upon and in conformity with the Underwriter Information;
(d) No documents were filed with the Commission since the Commission’s close of business on the business day immediately prior to the date of this Agreement and prior to the execution of this Agreement, except as set forth on Schedule II(b) hereto;
(e) The Registration Statement conforms, and the Prospectus and any further amendments or supplements to the Registration Statement and the Prospectus will conform, in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to each part of the Registration Statement, as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, and as of each Time of Delivery, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with the Underwriter Information;
(f) None of the MAIR Parties or any of their respective subsidiaries has, since the date of the latest audited financial statements included in the Pricing Prospectus, (i) sustained any material loss or interference with their business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree or (ii) entered into any transaction or agreement, whether or not in the ordinary course of business, that is material to the MAIR Parties or any of their respective subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the MAIR Parties or any of their respective subsidiaries taken as a whole, in each case otherwise than as set forth or contemplated in the Pricing Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Pricing Prospectus, there has not been (x) any change in the capital stock (other than as a result of (i) the exercise, vesting or settlement (including any “net” or “cashless” exercises or settlements), if any, of stock options, restricted stock, restricted stock units, incentive units, equity appreciation rights, equity appreciation rights units or other equity awards or the award, if any, of stock options, restricted stock, restricted stock units, incentive units, equity appreciation rights, equity appreciation rights
3
units or other equity awards in the ordinary course of business pursuant to the Company’s or MIAQ Solutions’ equity plans that are described in the Pricing Prospectus and the Prospectus, (ii) the issuance, if any, of stock upon the exercise or conversion of Company securities or securities of MIAQ Solutions as described in the Pricing Prospectus and the Prospectus or (iii) the Organizational Transactions) or long‑term or short-term debt of the Company, MIAQ Solutions or any of their subsidiaries, in each case otherwise than as set forth or contemplated in the Pricing Prospectus, or (y) any Material Adverse Effect (as defined below); as used in this Agreement, “Material Adverse Effect” shall mean any material adverse change or effect, or any development involving a prospective material adverse change or effect, in or affecting (i) the business, properties, general affairs, management, financial position, stockholders’ equity or results of operations of the MAIR Parties and their subsidiaries, taken as a whole, except as set forth or contemplated in the Pricing Prospectus, or (ii) the ability of the Company and MIAQ Solutions to perform their respective obligations under this Agreement and the Organizational Agreements, as applicable, including the issuance and sale of the Shares, or to consummate the Organizational Transactions and other transactions contemplated in the Pricing Prospectus and the Prospectus;
(g) Each of the MAIR Parties and their subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects except such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by each MAIR Party and its subsidiaries; and any real property and buildings held under lease by each MAIR Party and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such property and buildings by each MAIR Party and its subsidiaries;
(h) Each MAIR Party and each of their subsidiaries has been (i) duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization, with power and authority (corporate and other) to own its properties and conduct its business as described in the Pricing Prospectus, and (ii) duly qualified as a foreign corporation or other business entity for the transaction of business and is in good standing (or foreign equivalent) under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except, in the case of this clause (ii), where the failure to be so qualified or in good standing (or foreign equivalent) would not, individually or in the aggregate, have a Material Adverse Effect, and each “significant subsidiary” as defined in Rule 1-02 of Regulation S-X under the Act (the “Significant Subsidiaries”) of the Company has been listed in the Registration Statement;
(i) The Company has, and immediately following the Organizational Transactions will have, an authorized capitalization as set forth in the Pricing Prospectus and all of the issued shares of capital stock of the Company have been, and upon the consummation of the Organizational Transactions will be, duly and validly authorized and issued and fully paid and non-assessable and conform to the description of the Stock contained in the Pricing Disclosure Package and the Prospectus; and all of the issued shares of capital stock or other equity interests of each subsidiary of the Company and MIAQ Solutions have been, and immediately following the Organizational Transactions will be, duly and validly authorized and issued, fully paid and non-assessable and (except, in the case of any foreign subsidiary, for directors’ qualifying shares) owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims, except as otherwise disclosed in the Pricing Prospectus;
4
(j) The Shares have been duly and validly authorized and, when issued and delivered against payment therefor as provided herein, will be duly and validly issued and fully paid and non‑assessable and will conform to the description of the Stock contained in the Pricing Disclosure Package and the Prospectus; and the issuance of the Shares is not subject to any preemptive or similar rights;
(k) The issue and sale of the Shares and the compliance by the MAIR Parties with this Agreement and the consummation of the Organizational Transactions and other transactions contemplated in this Agreement and the Pricing Prospectus will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, (A) any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which any of the MAIR Parties or their subsidiaries is a party or by which any of the MAIR Parties or their subsidiaries is bound or to which any of the property or assets of any of the MAIR Parties or their subsidiaries is subject, (B) the certificate of incorporation or by-laws (or other applicable organizational document) of any of the MAIR Parties or their subsidiaries, or (C) any statute or any judgment, order, rule or regulation of any court or governmental agency or body having jurisdiction over any of the MAIR Parties or their subsidiaries or any of their properties, except, in the case of clauses (A) and (C) for such defaults, breaches, or violations that would not, individually or in the aggregate, have a Material Adverse Effect; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Shares or the consummation by the MAIR Parties of the Organizational Transactions and other transactions contemplated by this Agreement, except such as have been obtained under the Act, the approval by the Financial Industry Regulatory Authority (“FINRA”) of the underwriting terms and arrangements and such consents, approvals, authorizations, orders, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Shares by the Underwriters;
(l) None of the MAIR Parties or any of their respective Significant Subsidiaries is (i) in violation of its certificate of incorporation or by-laws (or other applicable organizational document), (ii) in violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body having jurisdiction over any MAIR Party or any of its Significant Subsidiaries or any of their properties, or (iii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except, in the case of the foregoing clauses (ii) and (iii), for such violations or defaults as would not, individually or in the aggregate, have a Material Adverse Effect;
(m) The statements set forth in the Pricing Prospectus and the Prospectus under the caption “Description of Capital Stock,” insofar as they purport to constitute a summary of the terms of the Stock, and under the captions “Certain Relationships and Related Party Transactions—Related Party Transactions—Registration Rights Agreement,” “Certain Relationships and Related Party Transactions—Related Party Transactions—Separation Agreement and Tax Matters Agreement,” “Certain Relationships and Related Party Transactions—Related Party Transactions—Management Advisory and Consulting Services and Transition Services Agreement,” “Material U.S. Federal Income Tax Consequences to Non-U.S. Holders” and “Underwriting,” insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair in all material respects;
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(n) Other than as set forth in the Pricing Prospectus, there are no legal, governmental or regulatory investigations, actions, demands, claims, suits, arbitrations, inquiries or proceedings (“Actions”) pending to which any of the MAIR Parties or any of their subsidiaries or, to the MAIR Parties’ knowledge, any officer or director of any MAIR Party, is a party or of which any property or assets of any of the MAIR Parties or any of their subsidiaries or, to the MAIR Parties’ knowledge, any officer or director of any MAIR Party, is the subject which, if determined adversely to any of the MAIR Parties or any of their subsidiaries (or such officer or director), would individually or in the aggregate have a Material Adverse Effect; and, to the MAIR Parties’ knowledge, no such proceedings are threatened or contemplated by governmental authorities or others; there are no current or pending Actions that are required under the Act to be described in the Registration Statement or the Pricing Prospectus that are not so described therein; and there are no statutes, regulations or contracts or other documents that are required under the Act to be filed as exhibits to the Registration Statement or described in the Registration Statement, the Pricing Prospectus that are not so filed as exhibits to the Registration Statement or described in the Registration Statement and the Pricing Prospectus;
(o) None of the MAIR Parties is and, after giving effect to the offering and sale of the Shares and the application of the proceeds thereof, neither of the MAIR Parties will be an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”);
(p) At the time of filing the Initial Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that the Company or any offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act) of the Shares, and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined under Rule 405 under the Act;
(q) PricewaterhouseCoopers LLP, who have certified certain financial statements of the MAIR Parties and their subsidiaries, and RSM US LLP, who have certified certain financial statements of Research Products Corporation, are each independent public accountants as required by the Act and the rules and regulations of the Commission thereunder;
(r) The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that (i) complies with the requirements of the Exchange Act, (ii) has been designed by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and (iii) is designed to provide reasonable assurance that (A) transactions are executed in accordance with management’s general or specific authorization, (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets, (C) access to assets is permitted only in accordance with management’s general or specific authorization and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and except as disclosed in the Pricing Prospectus, the Company’s internal control over financial reporting is effective and the Company is not aware of any material weaknesses in its internal control over financial reporting;
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(s) Except as disclosed in the Pricing Prospectus, since the date of the latest audited financial statements included in the Pricing Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;
(t) The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective;
(u) This Agreement has been duly authorized, executed and delivered by each of the MAIR Parties;
(v) Each Organizational Agreement has been duly authorized and will be duly executed and delivered by the Company and, once so executed and delivered, will constitute a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by equitable principles relating to enforceability;
(w) None of the MAIR Parties or any of their subsidiaries or controlled affiliates, nor any director, officer or employee of the MAIR Parties or any of their subsidiaries or controlled affiliates nor, to the knowledge of the MAIR Parties, any agent, affiliate or other person associated with or acting on behalf of the MAIR Parties or any of their subsidiaries or controlled affiliates has (i) made, offered, promised or authorized any unlawful contribution, gift, entertainment or other unlawful expense (or taken any act in furtherance thereof); (ii) made, offered, promised or authorized any direct or indirect unlawful payment; or (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or the rules and regulations thereunder, the Bribery Act 2010 of the United Kingdom or any other applicable anti-corruption, anti-bribery or related law, statute or regulation (collectively, “Anti-Corruption Laws”); the MAIR Parties and each of their subsidiaries and controlled affiliates have conducted their businesses in compliance with Anti-Corruption Laws and have instituted and maintained and will continue to maintain policies and procedures reasonably designed to promote and achieve compliance with such laws and with the representations and warranties contained herein; none of the MAIR Parties and their subsidiaries will use, directly or indirectly, the proceeds of the offering in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any person in violation of Anti-Corruption Laws;
(x) The operations of the MAIR Parties and their subsidiaries are and have been conducted at all times in compliance with the requirements of applicable anti-money laundering laws, including, but not limited to, the Bank Secrecy Act of 1970, as amended by the USA PATRIOT ACT of 2001, and the rules and regulations promulgated thereunder, and the applicable anti-money laundering laws of the various jurisdictions in which the MAIR Parties and their subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency having jurisdiction over a MAIR Party or any of its subsidiaries (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the MAIR Parties or any of their subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the MAIR Parties, threatened;
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(y) None of the MAIR Parties or any of their subsidiaries, nor any director, officer or employee of the MAIR Parties or any of their subsidiaries nor, to the knowledge of the MAIR Parties, any agent, affiliate or other person associated with or acting on behalf of the MAIR Parties or any of their subsidiaries is currently the subject or the target of any sanctions administered or enforced by the U.S. Government, including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person,” the European Union, His Majesty’s Treasury, the United Nations Security Council, or other relevant sanctions authority (collectively, “Sanctions”), nor are the MAIR Parties or any of their subsidiaries located, organized, or resident in a country or territory that is the subject or target of Sanctions (a “Sanctioned Jurisdiction”), and the MAIR Parties will not directly or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person, or in any country or territory, that, at the time of such funding, is the subject or the target of Sanctions or (ii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions; None of the MAIR Parties or any of their subsidiaries is engaged in, or has, at any time since April 24, 2019, engaged in, any dealings or transactions with or involving any individual or entity that was or is, as applicable, at the time of such dealing or transaction, the subject or target of Sanctions or with any Sanctioned Jurisdiction; the MAIR Parties and their subsidiaries have instituted, and maintain, policies and procedures designed to promote and achieve continued compliance with Sanctions;
(z) The financial statements included in the Registration Statement, the Pricing Prospectus and the Prospectus, together with the related schedules and notes, present fairly the financial position of the MAIR Parties and their subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the MAIR Parties and their subsidiaries for the periods specified; said financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and applied on a consistent basis throughout the periods involved. The supporting schedules, if any, present fairly in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Registration Statement, the Pricing Prospectus and the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included therein. Except as included therein, no historical or pro forma financial statements or supporting schedules are required to be included in the Registration Statement, the Pricing Prospectus or the Prospectus under the Act or the rules and regulations promulgated thereunder. All disclosures contained in the Registration Statement, the Pricing Prospectus and the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Act, to the extent applicable. The pro forma financial information and the related notes contained in the Registration Statement, the Pricing Prospectus and the Prospectus have been prepared in accordance with the requirements of the Act and the assumptions underlying such pro forma financial information are reasonable, provide a reasonable basis for presenting the significant effects of the events described therein (including the Organizational Transactions) and are set forth in the Registration Statement, the Pricing Prospectus and the Prospectus;
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(aa) The MAIR Parties and each of their subsidiaries (i) exclusively own or otherwise possess valid and sufficient rights (pursuant to written agreements) to use all material patents, patent applications, trademarks, service marks, trade names, domain names, copyrights and registrations and applications thereof, trade secrets and other confidential or proprietary know-how, software, systems and technology, and any other intellectual property or proprietary rights (collectively, “Intellectual Property”) used in or necessary for the conduct of their respective businesses, (ii) do not and have not, through the conduct of their respective businesses, infringed, misappropriated, or otherwise violated or conflicted with any Intellectual Property of any third party, and to the MAIR Parties’ knowledge, no third party has infringed, misappropriated, or otherwise violated, or conflicted with any Intellectual Property owned by or exclusively licensed to the MAIR Parties or any of their subsidiaries (“Company Intellectual Property”), (iii) have not received any written notice of (A) any claim of infringement, misappropriation, or other violation or conflict with, any Intellectual Property of any third party (including any invitations to take a license or cease and desist letters) or (B) any claim challenging the validity, enforceability or scope of, or the MAIR Parties’ or their subsidiaries’ rights in or ownership of, any Company Intellectual Property and (iv) have taken all reasonable steps necessary to secure and protect their interests in the Intellectual Property developed by their employees, consultants, agents and contractors on behalf of the MAIR Parties and their subsidiaries, including the execution of valid present Intellectual Property assignment and non-disclosure agreements for the benefit of the MAIR Parties and their subsidiaries by such employees, consultants, agents and contractors, and, to the MAIR Parties’ knowledge, no such agreement has been breached or violated in any manner that would materially impact the MAIR Parties or any of their subsidiaries’ businesses;
(bb) The information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases, in each case, that are owned (or purported to be owned) or controlled by the MAIR Parties or their subsidiaries (collectively, “IT Systems”) are adequate for, and operate and perform in all material respects as required in connection with the operation of the business of the MAIR Parties and their subsidiaries as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants; the MAIR Parties and their subsidiaries have implemented and maintained reasonable controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data (including all personal, personally identifiable, sensitive, confidential or regulated data (“Personal Data”)) used in connection with their businesses, and there have been no breaches, violations, outages or unauthorized uses of or accesses to same, except for those that have been remedied without material cost or liability or the duty to notify any other person or governmental or regulatory authority, nor any incidents under internal review or investigations relating to the same; the MAIR Parties and their subsidiaries are presently in compliance in all material respects with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification;
(cc) No forward-looking statement (within the meaning of Section 27A of the Act and Section 21E of the Exchange Act) included or incorporated by reference in any of the Registration Statement, the Pricing Prospectus or the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith;
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(dd) Nothing has come to the attention of the MAIR Parties that has caused the MAIR Parties to believe that the statistical and market-related data included in each of the Registration Statement, the Pricing Prospectus and the Prospectus is not based on or derived from sources that are reliable and accurate in all material respects; and such data are consistent with the sources from which they are derived and, to the extent required, the MAIR Parties have obtained the written consent to the use of such data from such sources;
(ee) There is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002, as amended and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans;
(ff) None of the MAIR Parties and their affiliates has taken or will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the MAIR Parties or any of their subsidiaries in connection with the offering of the Shares;
(gg) The MAIR Parties and each of their subsidiaries have such permits, licenses, approvals, consents, franchises, certificates of need and other approvals or authorizations of governmental or regulatory authorities (“Permits”) as are necessary under applicable law to own their respective properties and conduct their respective businesses in the manner described in the Registration Statement, the Pricing Prospectus and the Prospectus, except for any of the foregoing that would not, individually or in the aggregate, have a Material Adverse Effect. None of the MAIR Parties or any of their subsidiaries has received notice of any proceedings related to the revocation or modification of any such Permits that, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect;
(hh) The MAIR Parties and their subsidiaries, taken as a whole, are insured against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged and as required by law; and the MAIR Parties and their subsidiaries reasonably believe that they will be able to renew their existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue their respective businesses at a cost that would not reasonably be expected to have a Material Adverse Effect on the MAIR Parties and their subsidiaries, taken as a whole;
(ii) (i) The MAIR Parties and their subsidiaries (A) are, and at all prior times were, in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, requirements, decisions and orders relating to the protection of human health or safety, the environment, natural resources, hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”), (B) have received and are in compliance with all permits, licenses, certificates or other authorizations or approvals required of them under applicable Environmental Laws to conduct their respective businesses, and (C) have not received written notice of any actual or potential liability under or relating to any Environmental Laws, including for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, and to the knowledge of the MAIR Parties and their subsidiaries there is no event or condition that would reasonably be expected to result in any such written notice; (ii) there are no costs or liabilities associated with Environmental Laws of or relating to the MAIR Parties and their subsidiaries, except in the case of each of clauses (A), (B) and (C) above, for any such failure to comply, or failure to receive required permits, licenses or approvals, or cost or liability, as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and (iii) except as disclosed in the Pricing Disclosure
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Package and the Initial Registration Statement, there are no proceedings that are pending, or that are known by the MAIR Parties or their subsidiaries to be contemplated, against the MAIR Parties or their subsidiaries under any Environmental Laws in which a governmental entity is also a party, other than such proceedings regarding which it is reasonably believed that no monetary sanctions of $300,000 or more will be imposed against the MAIR Parties or their subsidiaries;
(jj) (i) Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), for which the Company, MIAQ Solutions or any member of their respective “Controlled Group” (defined as any organization which is a member of a controlled group of corporations within the meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the “Code”)) would have any liability (each, a “Plan”) has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan excluding transactions effected pursuant to a statutory or administrative exemption; (iii) for each Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no Plan has failed (whether or not waived), or is reasonably expected to fail, to satisfy the minimum funding standards (within the meaning of Section 302 of ERISA or Section 412 of the Code) applicable to such Plan; (iv) no Plan is, or is reasonably expected to be, in “at risk status” (within the meaning of Section 430 of the Code or Section 303(i) of ERISA) or “endangered status” or “critical status” (within the meaning of Section 430 of the Code or Section 305 of ERISA); (v) the fair market value of the assets of each Plan exceeds the present value of all benefits accrued under such Plan (determined based on those assumptions used to fund such Plan); (vi) no “reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur; (vii) each Plan that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification; and (viii) none of the MAIR Parties or any of their subsidiaries has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the PBGC, in the ordinary course and without default) in respect of a Plan (including a “multiemployer plan,” within the meaning of Section4001(a)(3) of ERISA), except in each case with respect to the events or conditions set forth in (i) through (viii) hereof, as would not, individually or in the aggregate, have a Material Adverse Effect;
(kk) Except as would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, (i) there is (A) no unfair labor practice complaint pending or, to the knowledge of the MAIR Parties or their subsidiaries, threatened against the MAIR Parties or any of their subsidiaries before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under collective bargaining agreements pending, or to the knowledge of the MAIR Parties or their subsidiaries, threatened, against the MAIR Parties or any of their subsidiaries, (B) no strike, labor dispute, slowdown or stoppage pending or, to the knowledge of the MAIR Parties or their subsidiaries, threatened against the MAIR Parties or any of their subsidiaries and (C) no union representation dispute currently existing concerning the employees of the MAIR Parties or any of their subsidiaries and, to the knowledge of the MAIR Parties or any of their subsidiaries, no union organizing activities taking place; and (ii) there has been no violation of any federal, state or local law relating to discrimination in hiring, promotion or pay of employees or of any applicable wage or hour laws;
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(ll) Except as disclosed in the Pricing Prospectus, (i) there are no persons with registration rights or other similar rights to have any securities registered pursuant to the Registration Statement or otherwise registered by the Company under the Act, except as have been validly waived or complied with and (ii) no holder of outstanding shares of the Company’s capital stock is entitled to preemptive or other rights to subscribe for the Shares that have not been complied with or otherwise effectively waived;
(mm) None of the MAIR Parties or any of their subsidiaries is a “covered foreign person,” as that term is defined in 31 C.F.R. § 850.209. None of the MAIR Parties or any of their subsidiaries currently engages, or has plans to engage, directly or indirectly, in a “covered activity,” as that term is defined in 31 C.F.R. § 850.208 (“Covered Activity”). The MAIR Parties do not have any joint ventures that engage in or plans to engage in any Covered Activity. The MAIR Parties also do not, directly or indirectly, hold a board seat on, have a voting or equity interest in, or have any contractual power to direct or cause the direction of the management or policies of any person or persons that engages or plans to engage in any Covered Activity; and
(nn) The Private Placement Shares to be issued and sold by the Company in the Concurrent Private Placement have been duly and validly authorized and, when issued and delivered against payment therefor, will be duly and validly issued and fully paid and non-assessable and will conform to the description of the Stock contained in the Pricing Disclosure Package and the Prospectus; and the Private Placement Shares will be issued in a transaction that is exempt from registration under the Act pursuant to Section 4(a)(2) the Act.
2. Subject to the terms and conditions herein set forth, (a) the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price per share of $26.1225, the number of Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto and (b) in the event and to the extent that the Underwriters shall exercise the election to purchase Optional Shares as provided below, the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at the purchase price per share set forth in clause (a) of this Section 2 (provided that the purchase price per Optional Share shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable on the Optional Shares), that portion of the number of Optional Shares as to which such election shall have been exercised (to be adjusted by you so as to eliminate fractional shares) determined by multiplying such number of Optional Shares by a fraction, the numerator of which is the maximum number of Optional Shares which such Underwriter is entitled to purchase as set forth opposite the name of such Underwriter in Schedule I hereto and the denominator of which is the maximum number of Optional Shares that all of the Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at their election up to 12,403,846 Optional Shares, at the purchase price per share set forth in the paragraph above, provided that the purchase price per Optional Share shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable on the Optional Shares. Any such election to purchase Optional Shares may be exercised only by written notice from you to the Company, given within a period of 30 calendar days after the date of this Agreement, setting forth the aggregate number of Optional Shares to be purchased and the date on which such Optional Shares are to be delivered, as determined by you but in no event earlier than the First Time of Delivery (as defined in Section 4 hereof) or, unless you and the Company otherwise agree in writing, earlier than one or later than ten business days after the date of such notice.
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3. Upon the authorization by you of the release of the Shares, the several Underwriters propose to offer the Shares for sale upon the terms and conditions set forth in the Pricing Disclosure Package and the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in definitive or book-entry form, and in such authorized denominations and registered in such names as the Representatives may request upon at least twenty-four hours’ prior notice to the Company shall be delivered by or on behalf of the Company to the Representatives, through the facilities of The Depository Trust Company (“DTC”), for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified by the Company to the Representatives at least twenty-four hours in advance. The Company will cause the certificates, if any, representing the Shares to be made available for checking and packaging at least twenty-four hours prior to the Time of Delivery (as defined below) with respect thereto at the office of DTC or its designated custodian (the “Designated Office”). The time and date of such delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m., New York City time, on April 17, 2026 or such other time and date as the Representatives and the Company may agree upon in writing, and, with respect to the Optional Shares, 9:30 a.m., New York time, on the date specified by the Representatives in the written notice given by the Representatives of the Underwriters’ election to purchase such Optional Shares, or such other time and date as the Representatives and the Company may agree upon in writing. Such time and date for delivery of the Firm Shares is herein called the “First Time of Delivery,” such time and date for delivery of the Optional Shares, if not the First Time of Delivery, is herein called the “Second Time of Delivery,” and each such time and date for delivery is herein called a “Time of Delivery.”
(b) The documents to be delivered at each Time of Delivery by or on behalf of the parties hereto pursuant to Section 8 hereof, including the cross receipt for the Shares and any additional documents requested by the Underwriters pursuant to Section 8(k) hereof, will be delivered at the offices of Sullivan & Cromwell LLP, 125 Broad Street, New York, NY 10004 (the “Closing Location”), and the Shares will be delivered at the Designated Office, all at such Time of Delivery. A meeting will be held at the Closing Location or by means of electronic communication at 5:30 p.m., New York City time, on the New York Business Day next preceding such Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Section 4, “New York Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive order to close.
5. Each MAIR Party agrees, jointly and severally, with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such Prospectus pursuant to Rule 424(b) under the Act prior to the earlier of (i) the First Time of Delivery and (ii) the Commission’s close of business on the second business day following the execution and delivery of this Agreement, or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the Act; to make no further amendment or any supplement to the Registration Statement or the Prospectus prior to the last Time of Delivery which shall be disapproved by you promptly after reasonable notice thereof; to advise you, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any amendment or supplement to the Prospectus has been filed and to furnish you with copies thereof; to file promptly all material required to be filed by the Company with the Commission pursuant to Rule 433(d) under the Act; to advise you, promptly after it receives notice
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thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus in respect of the Shares, of the suspension of the qualification of the Shares for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus or suspending any such qualification, to promptly use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may reasonably request to qualify the Shares for offering and sale under the securities laws of such jurisdictions as you may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Shares, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation (where not otherwise required) or to file a general consent to service of process in any jurisdiction (where not otherwise required);
(c) Prior to 10:00 a.m., New York City time, on the New York Business Day next succeeding the date of this Agreement and from time to time, to furnish the Underwriters with written and electronic copies of the Prospectus in New York City in such quantities as you may reasonably request, and, if the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Shares and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus in order to comply with the Act, to notify you and upon your request to prepare and furnish without charge to each Underwriter and to any dealer in securities as many written and electronic copies as you may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; and in case any Underwriter is required to deliver a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) in connection with sales of any of the Shares at any time nine months or more after the time of issue of the Prospectus, upon your request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many written and electronic copies as you may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as practicable (which may be satisfied by filing with the Commission’s Electronic Data Gathering Analysis and Retrieval System (“EDGAR”)), but in any event not later than sixteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the MAIR Parties and their subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158);
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(e) (1) During the period beginning from the date hereof and continuing to and including the date 180 days after the date of the Prospectus, not to (i) offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, or file with or confidentially submit to the Commission a registration statement under the Act relating to, any securities of the Company that are substantially similar to the Shares, including but not limited to any options or warrants to purchase shares of Stock or any securities that are convertible into or exchangeable for, or that represent the right to receive, Stock or any such substantially similar securities, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Stock or any such other securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Stock or such other securities, in cash or otherwise without the prior written consent of Goldman Sachs & Co. LLC and Barclays Capital Inc.; provided, however that the restrictions described above shall not apply to (A) the Shares to be sold hereunder, (B) the shares to be sold in the Concurrent Private Placement, (C) the Shares issued pursuant to employee stock option plans existing on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date of this Agreement, (D) grants of stock options, restricted stock, restricted stock units, equity appreciation rights, equity appreciation rights units or other equity awards and the issuance of shares of Stock or securities convertible into or exercisable or exchangeable for Stock (whether upon the exercise of stock options or otherwise) to the Company’s employees, officers, directors, advisors or consultants pursuant to the terms of an equity compensation plan in effect on the date of the First Time of Delivery and described in the Pricing Prospectus, (E) the filing of any registration statement on Form S-8 relating to securities granted or to be granted pursuant to any plan in effect on the date of the First Time of Delivery and described in the Pricing Prospectus, (F) the Shares issued in connection with the Organizational Transactions, or (G) the issuance, offer or entry into an agreement providing for the issuance of up to 10% of the total number of shares of Stock outstanding immediately following the offering of the Shares contemplated by this Agreement in acquisitions or other strategic transactions, provided that such recipients enter into a lock-up agreement with the Underwriters substantially to the effect set forth in Annex II hereto, and provided further that the Company shall notify the Representatives prior to making any such acquisition or strategic transaction; and provided, further, that in the case of clauses (C) and (D), the Company shall (x) cause each recipient of such securities that is a member of the Company’s board of directors, an executive officer or a beneficial holder of 5% of the fully-diluted capital stock of the Company to execute and deliver to the Representatives, prior to or substantially concurrently with the issuance of such securities, a lock-up agreement substantially to the effect set forth in Annex II hereto (which, for the avoidance of doubt, shall not extend the lock-up period beyond 180 days after the date of the Prospectus) to the extent not already executed and delivered by such recipients as of the date hereof and (y) enter stop transfer instructions with the Company’s transfer agent and registrar on such securities with respect to all recipients of such securities, which the Company agrees it will not waive or amend without the prior written consent of Goldman Sachs & Co. LLC and Barclays Capital Inc.;
(e) (2) If Goldman Sachs & Co. LLC and Barclays Capital Inc. agree to release or waive the restrictions set forth in a lock-up letter described in Section 8(i) hereof for an officer or director of the Company and provide the Company with notice of the impending release or waiver at least three (3) business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Annex I hereto through a major news service at least two business days before the effective date of the release or waiver;
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(f) During a period of three years from the effective date of the Registration Statement, to furnish to its stockholders as soon as practicable after the end of each fiscal year an annual report (including a balance sheet and statements of income, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries certified by independent public accountants) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the fiscal quarter ending after the effective date of the Registration Statement), to make available to its stockholders consolidated summary financial information of the Company and its subsidiaries for such quarter in reasonable detail; provided, however, that the Company may satisfy the requirements of this Section 5(f) by filing such information through EDGAR;
(g) During a period of three years from the effective date of the Registration Statement, to furnish to you copies of all reports or other communications (financial or other) furnished to stockholders, and to deliver to you (i) as soon as they are available, copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed; and (ii) such additional information concerning the business and financial condition of the Company as you may from time to time reasonably request (such financial statements to be on a consolidated basis to the extent the accounts of the Company and its subsidiaries are consolidated in reports furnished to its stockholders generally or to the Commission); provided, however, that the Company may satisfy the requirements of this Section 5(g) by filing such information through EDGAR;
(h) To use the net proceeds received by it from the sale of the Shares pursuant to this Agreement in the manner specified in the Pricing Prospectus under the caption “Use of Proceeds”;
(i) To use its best efforts to list for trading, subject to notice of issuance, the Shares on the New York Stock Exchange (the “Exchange”);
(j) To file with the Commission such information on Form 10-Q or Form 10-K as may be required by Rule 463 under the Act;
(k) If the Company elects to rely upon Rule 462(b), the Company shall file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and the Company shall at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give irrevocable instructions for the payment of such fee pursuant to Rule 3a(c) of the Commission’s Informal and Other Procedures (16 CFR 202.3a); and
(l) Upon request of any Underwriter, to furnish, or cause to be furnished, to such Underwriter an electronic version of the Company’s trademarks, servicemarks and corporate logo (the “Offering Logo”) for use on the website, if any, operated by such Underwriter solely for the purpose of facilitating the on-line offering of the Shares (the “License”); provided, however, that (i) the License shall be used solely for the purpose described above and is granted without any fee, (ii) the License shall not be used in any manner that does, or may reasonably be expected to, harm the reputation or goodwill of the Company or the Company’s rights in the Offering Logo, and (iii) the License may not be assigned, sublicensed or transferred by the Underwriter.
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6. (a) The Company represents and agrees that, without the prior consent of the Representatives, it has not made and will not make any offer relating to the Shares that would constitute a “free writing prospectus” as defined in Rule 405 under the Act; each Underwriter represents and agrees that, without the prior consent of the Company and the Representatives, it has not made and will not make any offer relating to the Shares that would constitute a free writing prospectus required to be filed with the Commission; any such free writing prospectus the use of which has been consented to by the Company and the Representatives is listed on Schedule II(a) hereto;
(b) The Company has complied and will comply with the requirements of Rule 433 under the Act applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission or retention where required and legending; and the Company represents that it has satisfied and agrees that it will satisfy the conditions under Rule 433 under the Act to avoid a requirement to file with the Commission any electronic road show;
(c) The Company agrees that if at any time following issuance of an Issuer Free Writing Prospectus or Written Testing-the-Waters Communication any event occurred or occurs as a result of which such Issuer Free Writing Prospectus or Written Testing-the-Waters Communication would conflict with the information in the Registration Statement, the Pricing Prospectus or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the Representatives and, if requested by the Representatives, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus, Written Testing-the-Waters Communication or other document which will correct such conflict, statement or omission;
(d) The Company represents and agrees that (i) it has not engaged in, or authorized any other person to engage in, any Testing-the-Waters Communications, other than Testing-the-Waters Communications with the prior consent of the Representatives with entities that the Company reasonably believes are qualified institutional buyers as defined in Rule 144A under the Act or institutions that are accredited investors as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Act; and (ii) it has not distributed, or authorized any other person to distribute, any Written Testing-the-Waters Communication, other than those distributed with the prior consent of the Representatives that are listed on Schedule III(d) hereto; and the Company reconfirms that the Underwriters have been authorized to act on its behalf in engaging in Testing-the-Waters Communications; and
(e) Each Underwriter represents and agrees that any Testing-the-Waters Communications undertaken by it were with entities that such Underwriter reasonably believes are qualified institutional buyers as defined in Rule 144A under the Act or institutions that are accredited investors as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Act.
7. Each MAIR Party, on a joint and several basis, covenants and agrees with the several Underwriters that, whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the MAIR Parties will pay or cause to be paid all expenses incident to the performance of their obligations under this Agreement (except as otherwise provided herein), including the following: (i) the reasonable and documented fees, disbursements and expenses of the Company’s counsel and accountants in connection with the registration of the Shares under the Act and all other expenses in connection with the preparation, printing, reproduction and filing of the Registration Statement, any Preliminary Prospectus, any Written Testing-the-Waters Communication, any Issuer Free Writing Prospectus and the
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Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) all costs and expenses related to the transfer and delivery of the Shares to the Underwriters, including any transfer or other taxes payable thereon, (iii) the cost of printing or producing any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Shares; (iv) reasonable and documented expenses incurred in connection with the qualification of the Shares for offering and sale under state securities laws as provided in Section 5(b) hereof, including the reasonable and documented fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky survey; provided that the reasonable and documented expenses described in this clause (iv) shall not exceed $5,000 in the aggregate; (v) all fees and expenses in connection with listing the Shares on the Exchange; (vi) the reasonable and documented filing fees incident to, and the fees and disbursements of counsel for the Underwriters in connection with, any required review by FINRA of the terms of the sale of the Shares (provided that the aggregate fees and disbursements of counsel for the Underwriters pursuant to clause (iv) and this clause (vi) of this Section 7 shall not exceed $75,000 in the aggregate); (vii) the cost of preparing stock certificates, to the extent applicable; (viii) the cost and charges of any transfer agent, registrar or depositary; (ix) the costs and expenses of the Company relating to investor presentations on any “roadshow” as defined in Rule 433(h) under the Act (a “roadshow”) undertaken in connection with the marketing of the offering of the Shares, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of roadshow slides and graphics, fees and expenses of any consultants engaged in connection with the roadshow presentations with the prior approval of the Company, and travel and lodging expenses of the representatives and officers of the Company and any such consultants; and (xi) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section 7. It is understood, however, that, except as provided in this Section 7, and Sections 9 and 12 hereof, the Underwriters will pay (i) all of their own costs and expenses, including the fees of their counsel, stock transfer taxes on resale of any of the Shares by them, and any advertising expenses connected with any offers they may make and (ii) in connection with any roadshow undertaken in connection with the marketing of the offering and the Shares, the travel, lodging and meal expenses of the Underwriters; provided, however, that the Representatives and the MAIR Parties agree that the Underwriters shall pay or cause to be paid fifty percent (50%) and the MAIR Parties shall pay or cause to be paid the remaining fifty percent (50%) of the cost of any aircraft chartered in connection with such roadshow.
8. The obligations of the Underwriters hereunder, as to the Shares to be delivered at each Time of Delivery, shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the MAIR Parties herein are, at and as of the Applicable Time and such Time of Delivery, true and correct, the condition that the MAIR Parties shall have performed all of their respective obligations hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; all material required to be filed by the Company pursuant to Rule 433(d) under the Act shall have been filed with the Commission within the applicable time period prescribed for such filing by Rule 433; if the Company has elected to rely upon Rule 462(b) under the Act, the Rule 462(b) Registration Statement shall have become effective by 10:00 P.M., Washington, D.C. time, on the date of this Agreement; no stop order suspending the effectiveness of the Registration Statement or any part
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thereof shall have been issued and no proceeding for that purpose or pursuant to Section 8A of the Act shall have been initiated or, to the Company’s knowledge, threatened by the Commission; no stop order suspending or preventing the use of the Pricing Prospectus, Prospectus or any Issuer Free Writing Prospectus shall have been initiated or, to the Company’s knowledge, threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to your reasonable satisfaction;
(b) Sullivan & Cromwell LLP, counsel for the Underwriters, shall have furnished to you such written opinion or opinions, dated such Time of Delivery, in form and substance satisfactory to you, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;
(c) Kirkland & Ellis LLP, counsel for the Company, shall have furnished to you their written opinion, dated such Time of Delivery, in form and substance satisfactory to you;
(d) On the date of the Prospectus at a time prior to the execution of this Agreement, at 9:30 a.m., New York City time, on the effective date of any post‑effective amendment to the Registration Statement filed subsequent to the date of this Agreement and also at each Time of Delivery, (i) PricewaterhouseCoopers LLP shall have furnished to you a letter or letters, dated the respective dates of delivery thereof, in form and substance satisfactory to you, and (ii) RSM US LLP shall have furnished to you a letter or letters, dated the respective dates of delivery thereof, in form and substance satisfactory to you;
(e) (i) None of the MAIR Parties or any of their subsidiaries shall have sustained since the date of the latest audited financial statements included in the Pricing Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Prospectus, and (ii) since the respective dates as of which information is given in the Pricing Prospectus there shall not have been any change in the capital stock (other than as a result of (i) the exercise, vesting or settlement (including any “net” or “cashless” exercises or settlements), if any, of stock options, restricted stock, restricted stock units, incentive units, equity appreciation rights, equity appreciation rights units or other equity awards or the award, if any, of stock options, restricted stock, restricted stock units, incentive units, equity appreciation rights, equity appreciation rights units or other equity awards in the ordinary course of business pursuant to the Company’s or MIAQ Solutions’ equity plans that are described in the Pricing Prospectus and the Prospectus, (ii) the issuance, if any, of stock upon the exercise or conversion of Company securities or securities of MIAQ Solutions as described in the Pricing Prospectus and the Prospectus or (iii) the Organizational Transactions) or long‑term or short-term debt of the Company, MIAQ Solutions or any of their subsidiaries, in each case otherwise than as set forth or contemplated in the Pricing Prospectus, or any change or effect, or any development involving a prospective change or effect, in or affecting (x) the business, properties, general affairs, management, financial position, stockholders’ equity or results of operations of the MAIR Parties and their subsidiaries, taken as a whole, except as set forth or contemplated in the Pricing Prospectus, or (y) the ability of the Company and MIAQ Solutions to perform their respective obligations under this Agreement and the Organizational Agreements, as applicable, including the issuance and sale of the Shares, or to consummate the Organizational Transactions and other transactions contemplated in the Pricing Prospectus and the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in your judgment so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares being delivered at such Time of Delivery on the terms and in the manner contemplated in the Pricing Prospectus and the Prospectus;
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(f) On or after the Applicable Time (i) no downgrading shall have occurred in the rating accorded the Company’s debt securities by any “nationally recognized statistical rating organization,” as defined in Section 3(a)(62) of the Exchange Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company’s debt securities;
(g) On or after the Applicable Time there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange or the Nasdaq Global Select Market; (ii) a suspension or material limitation in trading in the Company’s securities on the Exchange; (iii) a general moratorium on commercial banking activities declared by either Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or (v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in your judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares being delivered at such Time of Delivery on the terms and in the manner contemplated in the Pricing Prospectus and the Prospectus;
(h) The Shares to be sold at such Time of Delivery shall have been duly listed, subject to official notice of issuance, on the Exchange;
(i) The Company shall have obtained and delivered to the Underwriters executed copies of an agreement from each officer, director, and stockholder of the Company listed on Schedule III hereto, substantially to the effect set forth in Annex II hereto in form and substance satisfactory to you;
(j) The Company shall have complied with the provisions of Section 5(c) hereof with respect to the furnishing of prospectuses on the New York Business Day next succeeding the date of this Agreement;
(k) The MAIR Parties shall have furnished or caused to be furnished to you at such Time of Delivery certificates of officers of the Company and MIAQ Solutions satisfactory to you as to the accuracy of the representations and warranties of the Company and MIAQ Solutions herein at and as of such Time of Delivery, as to the performance by each of the MAIR of all of its respective obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsections (a) and (e) of this Section 8 and as to such other matters as you may reasonably request; and
(l) Each of the Company and MIAQ Solutions shall have furnished or caused to be furnished to you on the date of the Prospectus at a time prior to the execution of this Agreement and at such Time of Delivery a certificate or certificates of its Chief Financial Officer as to the accuracy of certain financial information included in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus and the Prospectus, in form and substance satisfactory to you.
(m) The Organizational Transactions shall have been consummated in all material respects as described in the Pricing Prospectus (except with respect to aspects of the Organizational Transactions that cannot be, or are not intended to be, completed on or prior to such Time of Delivery).
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9. (a) Each of the MAIR Parties, jointly and severally, will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus or in any amendment or supplement thereto, any roadshow, any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Act or any Testing-the-Waters Communication, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter promptly upon demand for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending against any such action or claim as such expenses are incurred; provided, however, that the MAIR Parties shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus or any Testing-the-Waters Communication, in reliance upon and in conformity with the Underwriter Information.
(b) Each Underwriter, severally and not jointly, will indemnify and hold harmless the MAIR Parties against any losses, claims, damages or liabilities to which the MAIR Parties may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus or any amendment or supplement thereto, any roadshow or any Testing-the-Waters Communication, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus or any amendment or supplement thereto, any roadshow or any Testing-the-Waters Communication, in reliance upon and in conformity with the Underwriter Information; and will reimburse the MAIR Parties for any legal or other expenses reasonably incurred by the MAIR Parties in connection with investigating or defending any such action or claim as such expenses are incurred. As used in this Agreement with respect to an Underwriter and an applicable document, “Underwriter Information” shall mean the written information furnished to the MAIR Parties by such Underwriter through the Representatives expressly for use therein; it being understood and agreed upon that the only such information furnished by any Underwriter consists of the following information in the Prospectus furnished on behalf of each Underwriter: the discount figures appearing in the sixth paragraph under the caption “Underwriting,” and the information contained in the thirteenth and fourteenth paragraphs under the caption “Underwriting.”
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) of this Section 9 of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; provided that the failure to notify the indemnifying party shall not relieve it from any liability that it may have under the preceding paragraphs of this Section 9 except to the extent that it has been materially prejudiced (through
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the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under the preceding paragraphs of this Section 9. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred and documented by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation; provided, however, that an indemnified party shall have the right to employ counsel to represent the indemnified party if (i) the indemnified party and the indemnifying party shall have so mutually agreed; (ii) the indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to the indemnified party; (iii) the indemnified party shall have reasonably concluded that there may be legal defenses available to them that are different from or in addition to those available to the indemnifying party; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the indemnified party, on the one hand, and the indemnifying party, on the other hand, and representation of both sets of parties by the same counsel would be inappropriate due to actual or potential differing interests between them, and in any such event the fees and expenses of such separate counsel shall be paid by the indemnifying party. No indemnifying party shall, (i) without the prior written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (x) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (y) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party or (ii) be required to indemnify any indemnified party hereunder for any settlement of any such action effected without its prior written consent (which consent shall not be unreasonably withheld), but if settled with the consent of the indemnifying party or if there be a final judgment for the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by Section 9(a) hereof, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request or disputed in good faith the indemnified party’s entitlement to such reimbursement prior to the date of such settlement.
(d) If the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the MAIR Parties on the one hand and the Underwriters on the other from the offering of the Shares. If, however, the
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allocation provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the MAIR Parties on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the MAIR Parties on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the MAIR Parties bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the MAIR Parties on the one hand or the Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The MAIR Parties and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint.
(e) The obligations of the MAIR Parties under this Section 9 shall be in addition to any liability which the MAIR Parties may otherwise have and shall extend, upon the same terms and conditions, to each employee, officer and director of each Underwriter and each person, if any, who controls any Underwriter within the meaning of the Act and each broker-dealer or other affiliate of any Underwriter; and the obligations of the Underwriters under this Section 9 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the MAIR Parties (including any person who, with his or her consent, is named in the Registration Statement as about to become a director of the Company) and to each person, if any, who controls the Company within the meaning of the Act.
10. (a) If any Underwriter shall default in its obligation to purchase the Shares which it has agreed to purchase hereunder at a Time of Delivery, you may in your discretion arrange for you or another party or other parties to purchase such Shares on the terms contained herein. If within thirty‑six hours after such default by any Underwriter you do not arrange for the purchase of such Shares, then the Company shall be entitled to a further period of thirty‑six hours within which to procure another party or other parties satisfactory to you to purchase such Shares on such terms. In the event that, within the respective prescribed periods, you notify the Company that you have so arranged for the purchase of such Shares, or the Company notifies you that it
23
has so arranged for the purchase of such Shares, you or the Company shall have the right to postpone such Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in your opinion may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any person substituted under this Section 10 with like effect as if such person had originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased does not exceed one‑eleventh of the aggregate number of all the Shares to be purchased at such Time of Delivery, then the Company shall have the right to require each non‑defaulting Underwriter to purchase the number of Shares which such Underwriter agreed to purchase hereunder at such Time of Delivery and, in addition, to require each non‑defaulting Underwriter to purchase its pro rata share (based on the number of Shares which such Underwriter agreed to purchase hereunder) of the Shares of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased exceeds one‑eleventh of the aggregate number of all the Shares to be purchased at such Time of Delivery, or if the Company shall not exercise the right described in subsection (b) above to require non‑defaulting Underwriters to purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement (or, with respect to the Second Time of Delivery, the obligations of the Underwriters to purchase and of the Company to sell the Optional Shares) shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the MAIR Parties, except for the expenses to be borne by the MAIR Parties and the Underwriters as provided in Section 7 hereof and the indemnity and contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.
11. The respective indemnities, rights of contribution, agreements, representations, warranties and other statements of the MAIR Parties and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any director, officer, employee, affiliate or controlling person of any Underwriter, or the MAIR Parties, or any officer or director or controlling person of the MAIR Parties, and shall survive delivery of and payment for the Shares.
12. If this Agreement shall be terminated pursuant to Section 10 hereof, the MAIR Parties shall not then be under any liability to any Underwriter except as provided in Sections 7 and 9 hereof; but, if for any other reason, any Shares are not delivered by or on behalf of the Company as provided herein or the Underwriters decline to purchase the Shares for any reason permitted under this Agreement, the MAIR Parties will reimburse the Underwriters through you for all reasonable and documented out‑of‑pocket expenses approved in writing by you, including fees and disbursements of counsel, reasonably incurred and documented by the Underwriters in making preparations for the purchase, sale and delivery of the Shares not so delivered, but the MAIR Parties shall then be under no further liability to any Underwriter except as provided in Sections 7 and 9 hereof.
24
13. In all dealings hereunder, the Representatives shall act on behalf of each of the Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by you jointly or by Goldman Sachs & Co. LLC on behalf of you as the Representatives.
All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to you as the Representatives in care of (a) Goldman Sachs & Co. LLC, 200 West Street, New York, New York 10282-2198, Attention: Registration Department; and (b) Barclays Capital Inc., 745 Seventh Avenue, New York, New York 10019, Attention: Syndicate Registration (Fax: (646) 834-8133) with a copy, in the case of any notice pursuant to Section 9(c) hereof, to the Director of Litigation, Office of the General Counsel, Barclays Capital Inc., 745 Seventh Avenue, New York, New York 10019; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 9(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters’ Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by you upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Company, which information may include the name and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients.
14. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the MAIR Parties and, to the extent provided in Sections 9 and 11 hereof, the officers and directors of the Company and each person who controls any MAIR Party or any Underwriter, or any director, officer, employee, or affiliate of any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Shares from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.
15. Time shall be of the essence of this Agreement. As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.
16. Each MAIR Party acknowledges and agrees that (i) the purchase and sale of the Shares pursuant to this Agreement is an arm’s-length commercial transaction between the MAIR Parties, on the one hand, and the several Underwriters, on the other, (ii) in connection therewith and with the process leading to such transaction each Underwriter is acting solely as a principal and not the agent or fiduciary of the MAIR Parties, (iii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of any of the MAIR Parties with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising any of the MAIR Parties on other matters) or any other obligation to any of the MAIR Parties except the obligations expressly set forth in this Agreement, (iv) each of the MAIR Parties has consulted its own legal and financial advisors to the extent it deemed appropriate, and (v) none of the activities of the Underwriters in connection with the transactions contemplated herein constitutes a recommendation, investment advice, or solicitation of any action by the Underwriters with respect to any entity or natural person. Each of
25
the MAIR Parties agrees that it will not claim that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to any of the MAIR Parties, in connection with such transaction or the process leading thereto.
17. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the MAIR Parties and the Underwriters, or any of them, with respect to the subject matter hereof.
18. This Agreement and any transaction contemplated by this Agreement and any claim, controversy or dispute arising under or related thereto shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflict of laws that would result in the application of any other law than the laws of the State of New York. Each of the MAIR Parties agrees that any suit or proceeding arising in respect of this Agreement or any transaction contemplated by this Agreement will be tried exclusively in the U.S. District Court for the Southern District of New York or, if that court does not have subject matter jurisdiction, in any state court located in The City and County of New York and each of the MAIR Parties agrees to submit to the jurisdiction of, and to venue in, such courts.
19. Each of the MAIR Parties and the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
20. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
21. Notwithstanding anything herein to the contrary, the MAIR Parties are authorized to disclose to any persons the U.S. federal and state income tax treatment and tax structure of the potential transaction and all materials of any kind (including tax opinions and other tax analyses) provided to the MAIR Parties relating to that treatment and structure, without the Underwriters imposing any limitation of any kind. However, any information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any person to comply with securities laws. For this purpose, “tax structure” is limited to any facts that may be relevant to that treatment.
22. Recognition of the U.S. Special Resolution Regimes.
(a) In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(b) In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime,
26
Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
(c) As used in this section 22:
“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Covered Entity” means any of the following:
(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
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If the foregoing is in accordance with your understanding, please sign and return to us seven counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this Agreement and such acceptance hereof shall constitute a binding agreement between each of the Underwriters, the Company and MIAQ Solutions. It is understood that your acceptance of this Agreement on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company and MIAQ Solutions for examination upon request, but without warranty on your part as to the authority of the signers thereof.
Very truly yours,
Madison Air Solutions Corporation
By:
/s/ Jill Wyant
Name: Jill Wyant
Title: President and Chief Executive Officer
Madison Industries IAQ Solutions Corporation
By:
/s/ Larry Gies
Name: Larry Gies
Title: President
[Signature Page to Underwriting Agreement]
Accepted as of the date hereof:
Goldman Sachs & Co. LLC
Barclays Capital Inc.
Jefferies LLC
Wells Fargo Securities, LLC
Goldman Sachs & Co. LLC
By:
/s/ Ryan Cunn
Name: Ryan Cunn
Title: Managing Director
Barclays Capital Inc.
By:
/s/ Michaela Diverio
Name: Michaela Diverio
Title: Managing Director, Barclays
Jefferies LLC
By:
/s/ Scott Skidmore
Name: Scott Skidmore
Title: Managing Director
Wells Fargo Securities, LLC
By:
/s/ Christie MacDonald
Name: Christie MacDonald
Title: Managing Director
On behalf of each of the Underwriters
[Signature Page to Underwriting Agreement]
SCHEDULE I
Underwriter
Total Number of
Firm Shares
to be Purchased
Number of
Optional
Shares to be
Purchased if
Maximum Option
Exercised
Goldman Sachs & Co. LLC
25,933,903
3,890,085
Barclays Capital Inc.
19,450,427
2,917,564
Jefferies LLC
9,332,125
1,399,819
Wells Fargo Securities, LLC
6,221,416
933,212
BofA Securities, Inc.
3,721,154
558,173
Citigroup Global Markets Inc.
3,721,154
558,173
Robert W. Baird & Co. Incorporated
2,862,426
429,364
RBC Capital Markets LLC
2,862,426
429,364
Guggenheim Securities, LLC
1,431,213
214,682
Santander US Capital Markets LLC
1,431,213
214,682
Nomura Securities International, Inc.
1,359,652
203,948
WR Securities, LLC
71,561
10,734
CIBC World Markets Corp.
1,431,213
214,682
Comerica Securities, Inc.
887,352
133,103
William Blair & Company, L.L.C.
658,358
98,754
Stifel, Nicolaus & Company, Incorporated
572,485
85,873
Capital One Securities, Inc.
372,115
55,817
PNC Capital Markets LLC
372,115
55,817
Total
82,692,308
12,403,846
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SCHEDULE II
(a)
Issuer Free Writing Prospectuses not included in the Pricing Disclosure Package:
Electronic roadshow made available on April 6, 2026.
(b)
Additional Documents Incorporated by Reference:
None.
(c)
Information other than the Pricing Prospectus that comprise the Pricing Disclosure Package:
The initial public offering price per share for the Shares is $27.00.
The number of Shares purchased by the Underwriters is 82,692,308.
(d)
Written Testing-the-Waters Communications:
Investor presentation materials presented in meetings held on the following dates: January 7, 2026, January 8, 2026, January 9, 2026, January 12, 2026, January 13, 2026, February 13, 2026, February 17, 2026, February 18, 2026 and March 2, 2026.
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SCHEDULE III
[On file with the Company]
29
ANNEX I
Form of Press Release
Madison Air Solutions Corporation
[Date]
(“[Company]”) announced today that Goldman Sachs & Co. LLC and Barclays Capital Inc., joint lead book-running managers in the Company’s recent public sale of [●] shares of Class A common stock, is [waiving] [releasing] a lock-up restriction with respect to [●] shares of the Company’s Class A common stock held by [certain officers or directors] [an officer or director] of the Company. The [waiver] [release] will take effect on [●], 2026, and the shares may be sold on or after such date.
This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.
ANNEX II
FORM OF LOCK-UP AGREEMENT
Madison Air Solutions Corporation
Lock-Up Agreement
, 2026
Goldman Sachs & Co. LLC
Barclays Capital Inc.
Jefferies LLC
Wells Fargo Securities, LLC
As Representatives of the several Underwriters
named in Schedule I to the Underwriting Agreement
c/o Goldman Sachs & Co. LLC
200 West Street
New York, NY 10282-2198
c/o Barclays Capital Inc.
745 Seventh Avenue
New York, New York 10019
c/o Jefferies LLC
520 Madison Avenue
New York, New York 10022
c/o Wells Fargo Securities, LLC
500 West 33rd Street, 14th Floor
New York, New York 10001
Re: Madison Air Solutions Corporation - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that you, as representatives (the “Representatives”), propose to enter into an underwriting agreement (the “Underwriting Agreement”) on behalf of the several underwriters named in Schedule I to such agreement (collectively, the “Underwriters”), with Madison Air Solutions Corporation, a Delaware corporation (the “Company”), providing for a public offering (the “Public Offering”) of shares (the “Shares”) of the Class A common stock, par value $0.0000001 per share, of the Company (the “Class A Common Stock”) pursuant to a Registration Statement on Form S-1 (the “Registration Statement”) filed with the Securities and Exchange Commission (the “SEC”). As used herein, the term “Common Stock” refers to shares of the Company’s common stock, including any shares of Class A Common Stock and Class B common stock, par value $0.0000001 per share.
In consideration of the agreement by the Underwriters to offer and sell the Shares, and of other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the undersigned agrees that, during the period beginning from the date of this Lock-Up Agreement and continuing to and including the date 180 days after the date of the final prospectus relating to the Public Offering (the “Prospectus”) (such period, the “Lock-Up Period”), the undersigned shall not, and shall not cause or direct any of its affiliates to, (i) offer, sell, contract to sell, pledge, grant any option, right or warrant to purchase, purchase any option or contract to sell, lend or otherwise transfer or dispose of any shares of Common Stock, or any options or warrants to purchase any shares of Common Stock, or any securities convertible into, exchangeable for or that represent the right to receive shares of Common Stock (such shares of Common Stock, options, rights, warrants or other securities, collectively, “Lock-Up Securities”), including, without limitation, any such Lock-Up Securities currently beneficially owned (as such term is used in Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or hereafter acquired by the undersigned, (ii) engage in any hedging or other transaction or arrangement (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination thereof, forward, swap or any other derivative transaction or instrument, however described or defined) which is designed to or which reasonably could be expected to lead to or result in a sale, loan, pledge or other disposition (whether by the undersigned or someone other than the undersigned), or transfer of any of the economic consequences of ownership, in whole or in part, directly or indirectly, of any Lock-Up Securities, whether any such transaction or arrangement (or instrument provided for thereunder) would be settled by delivery of Common Stock or other securities, in cash or otherwise (any such sale, loan, pledge or other disposition, or transfer of economic consequences, a “Transfer”), (iii) make any demand for or exercise any right with respect to the registration of any Lock-Up Securities or (iv) otherwise publicly announce any intention to engage in or cause any action, activity, transaction or arrangement described in clause (i), (ii) or (iii) above. The undersigned represents and warrants that the undersigned is not, and has not caused or directed any of its affiliates to be or become, currently a party to any agreement or arrangement that provides for, is designed to or reasonably could be expected to lead to or result in any Transfer during the Lock-Up Period.
Notwithstanding the foregoing, the undersigned may:
(a)
transfer the undersigned’s Lock-Up Securities (i) as one or more bona fide gifts or charitable contributions, or for bona fide estate planning purposes, (ii) upon death by will, testamentary document or intestate succession, (iii) if the undersigned is a natural person, to any member of the undersigned’s immediate family (for purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, current or former marriage, domestic partnership or adoption, not more remote than first cousin) or to any trust, partnership, limited liability company or other entity for the direct or indirect benefit of the undersigned or the immediate family of the undersigned or, if the undersigned is a trust, to a trustor or beneficiary of the trust or the estate of a beneficiary of such trust, (iv) to a partnership, limited liability company or other entity of which the undersigned and the immediate family of the undersigned are the legal and beneficial owner of all of the outstanding equity securities or similar interests, (v) to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (a)(i) through (iv) above, (vi) if the undersigned is a corporation, partnership, limited liability company, trust or other business entity, (A) to another corporation, partnership, limited liability company or other business entity that is an affiliate (as defined in Rule 405 under the Securities Act of 1933, as amended) of the undersigned, or to any investment fund or other entity which fund or entity is controlled or managed by the undersigned or affiliates of the undersigned, or (B) as
part of a distribution by the undersigned to its stockholders, partners, members or other equityholders or to the estate of any such stockholders, partners, members or other equityholders, (vii) by operation of law, such as pursuant to a qualified domestic order, divorce settlement, divorce decree or separation agreement or other order of a court or regulatory authority, (viii) to the Company from an employee of the Company upon death, disability or termination of employment, in each case, of such employee, (ix) if the undersigned is not an officer or director of the Company, in connection with a sale of the undersigned’s shares of Common Stock acquired (A) from the Underwriters in the Public Offering or (B) in open market transactions after the closing date of the Public Offering, (x) to the Company in connection with the vesting, settlement or exercise of restricted stock units, equity appreciation rights, equity appreciation rights units, options, warrants or other rights to purchase shares of Common Stock (including, in each case, by way of “net” or “cashless” exercise) that are scheduled to expire or automatically vest during the Lock-Up Period, including any transfer to the Company for the payment of tax withholdings or remittance payments due as a result of the vesting, settlement or exercise of such restricted stock units, equity appreciation rights, equity appreciation rights units, options, warrants or other rights, or in connection with the conversion of convertible securities, in all such cases pursuant to equity awards granted under a stock incentive plan or other equity award plan, or pursuant to the terms of convertible securities, each as described in the Registration Statement, the preliminary prospectus relating to the Shares included in the Registration Statement immediately prior to the time the Underwriting Agreement is executed and the Prospectus, provided that any securities received upon such vesting, settlement, exercise or conversion shall be subject to the terms of this Lock-Up Agreement, or (xi) with the prior written consent of Goldman Sachs & Co. LLC and Barclays Capital Inc. on behalf of the Underwriters; provided that (A) in the case of clauses (a)(i), (ii), (iii), (iv), (v) and (vi) above, such transfer or distribution shall not involve a disposition for value, (B) in the case of clauses (a)(i), (ii), (iii), (iv), (v), (vi) and (vii) above, it shall be a condition to the transfer or distribution that the donee, devisee, transferee or distributee, as the case may be, shall sign and deliver a lock‑up agreement in the form of this Lock-Up Agreement, (C) in the case of clauses (a)(ii), (iii), (iv), (v) and (vi) above, no filing by any party (including, without limitation, any donor, donee, devisee, transferor, transferee, distributor or distributee) under the Exchange Act or other public filing, report or announcement reporting a reduction in beneficial ownership of Lock-Up Securities shall be required or shall be voluntarily made in connection with such transfer or distribution (other than a filing on a Form 5 made after the expiration of the Lock-Up Period referred to above) and (D) in the case of clauses (a)(i), (vii), (viii), (ix) and (x) above, no filing under the Exchange Act or other public filing, report or announcement shall be voluntarily made, and if any such filing, report or announcement shall be legally required during the Lock-Up Period, such filing, report or announcement shall clearly indicate in the footnotes thereto (A) the circumstances of such transfer or distribution and (B) in the case of a transfer or distribution pursuant to clauses (a)(i) or (vii) above, that the donee, devisee, transferee or distributee has agreed to be bound by a lock-up agreement in the form of this Lock-Up Agreement;
(b)
enter into or amend a written plan meeting the requirements of Rule 10b5-1 under the Exchange Act relating to the transfer, sale or other disposition of the undersigned’s Lock-Up Securities, if then permitted by the Company, provided that none of the securities subject to such plan may be transferred, sold or otherwise disposed of until after the expiration of the Lock-Up Period and no public announcement, report or filing
under the Exchange Act, or any other public filing, report or announcement, shall be voluntarily made (whether by or on behalf of the undersigned, the Company or any other party) regarding, or that otherwise discloses, the establishment of such plan during the Lock-Up Period, and if any such filing, report or announcement shall be legally required during the Lock-Up Period, such filing, report or announcement shall clearly indicate that that none of the securities subject to such plan may be transferred, sold or otherwise disposed of pursuant to such plan until after the expiration of the Lock-Up Period; and
(c)
transfer the undersigned’s Lock-Up Securities pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction that is approved by the Board of Directors of the Company and made to all holders of the Company’s capital stock involving a Change of Control of the Company (for purposes hereof, “Change of Control” shall mean the transfer (whether by tender offer, merger, consolidation or other similar transaction), in one transaction or a series of related transactions, to a person or group of affiliated persons, of shares of capital stock if, after such transfer, such person or group of affiliated persons would hold at least a majority of the outstanding voting securities of the Company (or the surviving entity)); provided that in the event that such tender offer, merger, consolidation or other similar transaction is not completed, the undersigned’s Lock-Up Securities shall remain subject to the provisions of this Lock-Up Agreement.
If the undersigned is an officer or director of the Company, the undersigned further agrees that the foregoing provisions shall be equally applicable to any issuer-directed or other Shares the undersigned may purchase in the Public Offering.
If the undersigned is not a natural person, the undersigned represents and warrants that no single natural person, entity or “group” (within the meaning of Section 13(d)(3) of the Exchange Act), other than a natural person, entity or “group” (as described above) that has executed a Lock-Up Agreement in substantially the same form as this Lock-Up Agreement, beneficially owns, directly or indirectly, 50% or more of the common equity interests, or 50% or more of the voting power, in the undersigned.
If the undersigned is an officer or director of the Company, (i) Goldman Sachs & Co. LLC and Barclays Capital Inc. agree that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of shares of Common Stock, Goldman Sachs & Co. LLC and Barclays Capital Inc. will notify the Company of the impending release or waiver and (ii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service (or such other method approved by Goldman Sachs & Co. LLC and Barclays Capital Inc. that satisfies the requirements of FINRA Rule 5131(d)(2)) at least two business days before the effective date of the release or waiver. Any release or waiver granted by Goldman Sachs & Co. LLC and Barclays Capital Inc. hereunder to any such officer or director shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (i) the release or waiver is effected solely to permit a transfer not for consideration or that is to an immediate family member as defined in FINRA Rule 5130(i)(5) and (ii) the transferee has agreed in writing to be bound by the same terms described in this Lock-Up Agreement to the extent and for the duration that such terms remain in effect at the time of the transfer.
The undersigned now has, and, except as contemplated by clauses (a) and (c) of the third paragraph of this Lock-Up Agreement, for the duration of this Lock-Up Agreement will have, good and marketable title to the undersigned’s Lock-Up Securities, free and clear of all liens,
encumbrances and claims whatsoever. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s Lock-Up Securities except in compliance with the foregoing restrictions.
The undersigned acknowledges and agrees that none of the Underwriters has made any recommendation or provided any investment or other advice to the undersigned with respect to this Lock-Up Agreement or the subject matter hereof, and the undersigned has consulted its own legal, accounting, financial, regulatory, tax and other advisors with respect to this Lock-Up Agreement and the subject matter hereof to the extent the undersigned has deemed appropriate. The undersigned further acknowledges and agrees that, although the Underwriters may have provided or hereafter provide to the undersigned in connection with the Public Offering a Form CRS and/or certain other disclosures as contemplated by Regulation Best Interest, the Underwriters have not made and are not making a recommendation to the undersigned to enter into this Lock-Up Agreement or to transfer, sell or dispose of, or to refrain from transferring, selling or disposing of, any shares of Common Stock, and nothing set forth in such disclosures or herein is intended to suggest that any Underwriter is making such a recommendation.
The restrictions set forth in this Lock-Up Agreement shall not apply to any exchange, transfer or sale in connection with, and as contemplated by, the Organizational Transactions (as such term is defined in the Pricing Disclosure Package under “Organizational Transactions”).
This Lock-Up Agreement shall automatically terminate and the undersigned shall be released from all of his, her or its obligations hereunder upon the earlier of (i) the date on which the Registration Statement filed with the SEC with respect to the Public Offering is withdrawn, (ii) the date on which for any reason the Underwriting Agreement is terminated (other than the provisions thereof that survive termination) prior to payment for and delivery of the Shares to be sold thereunder (other than pursuant to the Underwriters’ option thereunder to purchase additional Shares), (iii) the date on which the Company notifies the Representatives, in writing and prior to the execution of the Underwriting Agreement, that it does not intend to proceed with the Public Offering and (iv) December 31, 2026, in the event that the Underwriting Agreement has not been executed by such date (provided, however, that the Company may, by written notice to the undersigned prior to such date, extend such date by a period of up to an additional 90 days).
The undersigned understands that the Company and the Underwriters are relying upon this Lock-Up Agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns. The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. This Lock-Up Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflict of laws that would result in the application of any law other than the laws of the State of New York. This Lock-Up Agreement may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com or www.echosign.com) or other transmission method, and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[Signature Page Follows]
Very truly yours,
IF AN INDIVIDUAL:
IF AN ENTITY:
By:
(duly authorized signature)
(please print complete name of entity)
Name:
By:
(please print full name)
(duly authorized signature)
Name:
(please print full name)
Title:
(please print full title)
[Signature Page to Lock-Up Agreement]
EX-3.1
EX-3.1
Filename: ck0002098430-ex3_1.htm · Sequence: 3
EX-3.1
Exhibit 3.1
MADISON AIR SOLUTIONS CORPORATION
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)
Madison Air Solutions Corporation, a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “DGCL”), certifies as follows:
1.
The name of this corporation is Madison Air Solutions Corporation. The original Certificate of Incorporation of this corporation was filed with the Secretary of State of the State of Delaware on November 5, 2025.
2.
The Board of Directors of this corporation duly adopted resolutions proposing to amend and restate the Certificate of Incorporation of this corporation, in the form attached hereto as Exhibit A, declaring said amendment and restatement to be advisable and in the best interests of this corporation and its stockholders, and directing said amendment and restatement to be considered by the stockholders by written consent in lieu of a special meeting.
3.
This Amended and Restated Certificate of Incorporation was approved by the holders of the requisite number of shares of this corporation in accordance with Section 228 of the DGCL.
4.
This Amended and Restated Certificate of Incorporation, which restates and integrates and further amends the provisions of this corporation’s Certificate of Incorporation, has been duly adopted in accordance with Sections 228, 242 and 245 of the DGCL.
IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation has been executed by a duly authorized officer of this corporation on April 15, 2026.
By:
/s/ John Lavorato
Name:
John Lavorato
Title:
Secretary
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EXHIBIT A
MADISON AIR SOLUTIONS CORPORATION
AMENDED AND RESTATED CERTFICATE OF INCORPORATION
ARTICLE ONE
The name of the corporation is Madison Air Solutions Corporation (the “Corporation”).
ARTICLE TWO
The address of the Corporation’s registered office in the State of Delaware is 251 Little Falls Drive, in the City of Wilmington, County of New Castle, 19808. The name of its registered agent at such address is Corporation Service Company.
ARTICLE THREE
The nature and purpose of the business of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (“DGCL”).
ARTICLE FOUR
Section 1. Authorized Shares. The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 2,600,000,000 shares, consisting of three classes as follows:
(a)
100,000,000 shares of Preferred Stock, par value $0.0000001 per share (the “Preferred Stock”);
(b)
2,000,000,000 shares of Class A Common Stock, par value $0.0000001 per share (the “Class A Common Stock”); and
(c)
500,000,000 shares of Class B Common Stock, par value $0.0000001 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”).
The Preferred Stock and the Common Stock shall have the designations, rights, powers, and preferences and the qualifications, restrictions, and limitations thereof, if any, set forth below.
Section 2. Preferred Stock. The Board of Directors of the Corporation (the “Board”) is authorized, subject to limitations prescribed by law, to provide, by resolution or resolutions for the issuance of shares of Preferred Stock in one or more series, and with respect to each series, to establish the number of shares to be included in each such series, and to fix the voting powers (if any), designations, powers, preferences and relative, participating, optional, or other special rights, if any, of the shares of each such series, and any qualifications, limitations, or restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights of the Common Stock. The powers (including voting powers), preferences, and relative, participating, optional and other special rights of each series of Preferred Stock and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. Subject to the rights of the holders of any series of Preferred Stock, the number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then-outstanding) without the separate vote of the holders of the Preferred Stock as a class, irrespective of the provisions of Section 242(b)(2) of the DGCL. For the avoidance of doubt, the Corporation does not intend by the foregoing sentence to opt out of the provisions of Section 242(d) of the DGCL, and intends that Section 242(d) be applicable to the Corporation.
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Section 3. Common Stock.
(a) Voting Rights. Except as otherwise provided by the DGCL or this Certificate of Incorporation (as it may be amended and/or restated from time to time, including pursuant to any certificate of designation relating to any series of Preferred Stock, this “Certificate”) and subject to the rights of holders of any series of Preferred Stock then-outstanding, all of the voting power of the stockholders of the Corporation shall be vested in the holders of the Common Stock.
(i)
Class A Voting Power. Each holder of Class A Common Stock shall be entitled to one (1) vote for each share of Class A Common Stock held of record by such holder on all matters to be voted upon by stockholders of the Corporation.
(ii)
Class B Voting Power. Each holder of Class B Common Stock shall initially be entitled to ten (10) votes for each share of Class B Common Stock held of record by such holder on all matters to be voted on by stockholders of the Corporation.
(iii)
Voting Together as a Single Class. Except as otherwise required in this Certificate or by applicable law, the holders of Class A Common Stock and Class B Common Stock shall vote together as a single class on all matters voted upon by the stockholders of the Corporation; provided, however, that, except as otherwise required by law or this Certificate, the holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate (including any certificate of designation relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Certificate (including any certificate of designation relating to any series of Preferred Stock) or pursuant to the DGCL. Subject to the rights of the holders of any series of Preferred Stock, the number of authorized shares of Class A Common Stock may be increased or decreased (but not below the number of shares thereof then-outstanding) without the separate vote of the holders of the Class A Common Stock as a class, irrespective of the provisions of Section 242(b)(2) of the DGCL. For the avoidance of doubt, the Corporation does not intend by the foregoing sentence to opt out of the provisions of Section 242(d) of the DGCL, and intends that Section 242(d) be applicable to the Corporation.
(iv)
No Cumulative Voting Rights. The holders of shares of Common Stock shall not have cumulative voting rights.
(v)
Voting as Separate Classes. The holders of the outstanding shares of Class A Common Stock and Class B Common Stock shall be entitled to vote separately as a class upon any amendment to this Certificate (including by merger, consolidation, statutory conversion, transfer, or otherwise) that would increase or decrease the par value of a class of stock or alter or change the powers, preferences, or special rights of a class of stock so as to affect them adversely.
(b) Dividends. Subject to the rights of the holders of any series of Preferred Stock then-outstanding and to the other provisions of applicable law and this Certificate, the holders of Class A Common Stock and the holders of Class B Common Stock shall be entitled to share equally, on a per share basis, in such dividends and other distributions of cash, property or shares of stock of the Corporation as may be declared by the Board from time to time with respect to the Common Stock out of assets or funds of the Corporation legally available therefor; provided that, in connection with any dividend payable in shares of Common Stock, holders of Class A Common Stock may receive shares of Class A Common Stock and holders of Class B Common Stock may receive shares of Class B Common Stock.
(c) Liquidation, Dissolution, etc. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, after payment or provision for payment of the Corporation’s debts and any other payments required by law and amounts payable upon outstanding shares of Preferred Stock ranking senior to the shares of Common Stock upon such dissolution, liquidation or winding up, if any, the remaining net assets of the Corporation shall be distributed to the holders of shares of Common Stock and the holders of shares of any other class or series ranking equally with the shares of Common Stock upon such dissolution, liquidation or winding up, equally on a per share basis. Subject to the rights of the holders of Preferred Stock then-outstanding and
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the other provisions of this Certificate, a merger or consolidation of the Corporation with or into any other corporation or other entity, or a sale or conveyance of all or any part of the assets of the Corporation (which shall not in fact result in the liquidation of the Corporation and the distribution of assets to its stockholders) shall not be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the Corporation within the meaning of this Paragraph (c).
(d) Subdivision, Consolidation or Reclassification. Shares of Class A Common Stock or Class B Common Stock may not be subdivided, combined or reclassified unless the shares of the other class is concurrently therewith proportionately subdivided, combined or reclassified in a manner that maintains the same proportionate equity ownership between the holders of the outstanding Class A Common Stock and Class B Common Stock on the record date for such subdivision, combination or reclassification other than minimal differences that may result from cashing out fractional shares that otherwise would result from such subdivision, combination or reclassification.
(e) Conversion.
(i)
Optional Conversion of Class B Common Stock. Each share of Class B Common Stock shall be convertible into one (1) fully paid and nonassessable share of Class A Common Stock at the option of the holder thereof at any time upon written notice to the Corporation (an “Optional Class B Conversion Event”). Before any holder of Class B Common Stock shall be entitled to convert any shares of Class B Common Stock into shares of Class A Common Stock, such holder shall surrender the certificate or certificates therefor (if any), duly endorsed, at the principal corporate office of the Corporation or of any transfer agent for the Class B Common Stock, and shall provide written notice to the Corporation at its principal corporate office, of such conversion election and shall state therein the name or names (A) in which the certificate or certificates representing the shares of Class A Common Stock into which the shares of Class B Common Stock are so converted are to be issued (if such shares of Class A Common Stock are certificated) or (B) in which such shares of Class A Common Stock are to be registered in book-entry form (if such shares of Class A Common Stock are uncertificated). If the shares of Class A Common Stock into which the shares of Class B Common Stock are to be converted are to be issued in a name or names other than the name of the holder of the shares of Class B Common Stock being converted, such notice shall be accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the holder. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates representing the number of shares of Class A Common Stock to which such holder shall be entitled upon such conversion (if such shares of Class A Common Stock are certificated) or shall register such shares of Class A Common Stock in book-entry form (if such shares of Class A Common Stock are uncertificated). Such conversion shall be deemed to be effective immediately prior to the close of business on the date of such surrender of the shares of Class B Common Stock to be converted. Contemporaneously with the receipt by the Corporation of written notice of such conversion election as required by this Section 3(f)(i) of this ARTICLE FOUR, the shares of Class A Common Stock issuable upon such conversion shall be deemed to be outstanding as of such time, and the Person or Persons entitled to receive the shares of Class A Common Stock issuable upon such conversion shall be deemed to be the record holder or holders of such shares of Class A Common Stock as of such time. Notwithstanding anything herein to the contrary, shares of Class B Common Stock represented by a lost, stolen or destroyed stock certificate may be converted pursuant to an Optional Class B Conversion Event if the holder thereof notifies the Corporation or its transfer agent that such certificate has been lost, stolen or destroyed and makes an affidavit of that fact acceptable to the Corporation and executes an agreement acceptable to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificate.
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(ii)
Automatic Conversion of Class B Common Stock. Each share of Class B Common Stock shall automatically convert into one (1) fully paid and nonassessable share of Class A Common Stock upon the occurrence of the earliest of an event described below (each, a “Mandatory Class B Conversion Event”):
a.
Reduction in Voting Power. Each then-outstanding share of Class B Common Stock shall automatically, without further action by the Corporation or the holder thereof, convert into one (1) fully paid and nonassessable share of Class A Common Stock at 5:00 p.m. New York City time upon the date fixed by the Board that is no less than 61 days and no more than 180 days following (and if no date is fixed by the Board, then 5:00 p.m. New York City time on the date that is 180 days following) the first date on which the aggregate number of then-outstanding shares of Class B Common Stock ceases to represent at least 10% of the then-outstanding shares of Class A Common Stock and Class B Common Stock;
b.
Death or Disability of Larry W. Gies. Each then-outstanding share of Class B Common Stock shall automatically, without further action by the Corporation or the holder thereof, convert into one (1) fully paid and nonassessable share of Class A Common Stock upon the 12-month anniversary of the death or Disability of Larry W. Gies, which may be extended to the 18-month anniversary of the death or Disability of Larry W. Gies upon affirmative approval of a majority of the Independent Directors; and
c.
Transfers. Upon the occurrence of a Transfer, other than a Permitted Transfer, of a share of Class B Common Stock each share of Class B Common Stock so Transferred shall automatically, without further action by the Corporation or the holder thereof, convert into one (1) fully paid and nonassessable share of Class A Common Stock.
(iii)
Certificates. Each outstanding stock certificate (if shares are in certificated form) that, immediately prior to the occurrence of a Mandatory Class B Conversion Event, represented one or more shares of Class B Common Stock shall, upon such Mandatory Class B Conversion Event, represent an equal number of shares of Class A Common Stock, without the need for surrender or exchange thereof. The Corporation shall, upon the request of any holder whose shares of Class B Common Stock have been converted into shares of Class A Common Stock as a result of an Optional Class B Conversion Event or a Mandatory Class B Conversion Event (either of the foregoing, a “Conversion Event”) and upon surrender by such holder to the Corporation of the outstanding certificate(s) formerly representing such holder’s shares of Class B Common Stock, if any (or, in the case of any lost, stolen or destroyed certificate, upon such holder providing an affidavit of that fact acceptable to the Corporation and executing an agreement acceptable to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificate), issue and deliver to such holder (or such other Person specified pursuant to Section 3(f)(i) of this ARTICLE FOUR) certificate(s) representing the shares of Class A Common Stock into which such holder’s shares of Class B Common Stock were converted as a result of such Conversion Event (if such shares are certificated) or, if such shares are uncertificated, register such shares in book-entry form. Each share of Class B Common Stock that is converted pursuant to Section 3(f)(i) or Section 3(f)(ii) of this ARTICLE FOUR shall thereupon automatically be retired and shall not be available for reissuance.
(iv)
Policies and Procedures. The Corporation may, from time to time, establish such policies and procedures, not in violation of applicable law or the other provisions of this Certificate or the Bylaws of the Corporation (as amended and/or restated, the “Bylaws”), relating to the conversion of the Class B Common Stock into Class A Common Stock, as it may deem necessary or advisable in connection therewith. In connection with any action of stockholders taken at a meeting, the stock ledger of the Corporation (or in book-entry as maintained by the transfer agent of the Corporation) shall be presumptive evidence as to who are the stockholders entitled to vote in person or by proxy at any meeting of stockholders and the class or classes or series of shares held by each such stockholder and the number of shares of each class or classes or series held by such stockholder.
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(v)
Reservation of Stock. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose of effecting the conversion of the shares of Class B Common Stock, such number of shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all then-outstanding shares of Class B Common Stock into shares of Class A Common Stock; and if at any time the number of authorized but unissued shares of Class A Common Stock will not be sufficient to effect the conversion of all then-outstanding shares of Class B Common Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Class A Common Stock to such number of shares as will be sufficient for such purpose.
ARTICLE FIVE
Section 1. Board of Directors. Except as otherwise provided in this Certificate or the DGCL, the business and affairs of the Corporation shall be managed by or under the direction of the Board.
Section 2. Number of Directors. Subject to any rights of the holders of any series of Preferred Stock then-outstanding to elect additional directors under specified circumstances or otherwise, the number of directors which shall constitute the Board shall be fixed from time to time exclusively by resolution of the Board; provided that, so long as Holdings is entitled to nominate directors pursuant to that certain Director Nomination Agreement, dated on or about the date hereof (as amended and/or restated or supplemented in accordance with its terms, the “Director Nomination Agreement”, a copy of which was filed by the Corporation with the U.S. Securities and Exchange Commission), the number of directors shall not be changed without the consent of Holdings, and further provided that, before the Trigger Date, the size of the Board may also be fixed by the holders of a majority of the voting power present or represented by proxy at a duly convened meeting of stockholders or by a consent of stockholders in lieu of a meeting in accordance with Section 228 of the DGCL.
Section 3. Classes of Directors. The directors of the Corporation, other than those who may be elected by the holders of any series of Preferred Stock, shall be divided into three classes designated Class I, Class II and Class III.
Section 4. Election and Term of Office. Subject to the rights of the holders of any series of Preferred Stock then outstanding, the directors shall be elected by a plurality of the votes cast. The term of office of the initial Class I directors shall expire at the first annual meeting of stockholders following the date the Common Stock is first publicly traded (the “IPO Date”), the term of office of the initial Class II directors shall expire at the second annual meeting of stockholders after the IPO Date, and the term of office of the initial Class III directors shall expire at the third annual meeting of the stockholders after the IPO Date. The Board may assign directors already in office to Class I, Class II, and Class III. At each annual meeting of stockholders after the IPO Date, directors elected to replace those of a class whose terms expire at such annual meeting shall be elected to hold office until the third succeeding annual meeting after their election and until their respective successors shall have been duly elected and qualified. Each such director shall hold office until the annual meeting of stockholders for the year in which such director’s term expires and a successor is duly elected and qualified or until his or her earlier death, resignation, or removal. Nothing in this Certificate shall preclude a director from serving consecutive terms. Elections of directors need not be by written ballot unless the Bylaws shall so provide.
Section 5. Newly-Created Directorships and Vacancies. Newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board resulting from death, resignation, disqualification, removal from office or any other cause may be filled only by resolution of a majority of the directors then in office, although less than a quorum, or by a sole remaining director, and may not be filled in any other manner; provided that, before the Trigger Date, vacant and newly created directorships that result from an increase in the number of directors may be filled by a majority of the directors then in office, even if less than a quorum, or by a sole remaining director, or by the stockholders; and further provided that any vacancy or newly created directorship relating to a director entitled to be nominated by Holdings pursuant to the Director Nomination Agreement may only be filled with the person nominated by Holdings. A director elected or appointed to fill a vacancy shall serve for the unexpired term of his or her predecessor in office and until his or her successor is elected and qualified or until his or her earlier death, resignation, or removal. A director elected or appointed to fill a position resulting from an increase in the number of directors shall hold office until the next election of the class for which such director shall have been elected
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or appointed and until his or her successor is elected and qualified, or until his or her earlier death, resignation, or removal. No decrease in the authorized number of directors shall shorten the term of any incumbent director.
Section 6. Removal and Resignation of Directors. Subject to the rights of the holders of any series of Preferred Stock then outstanding, and notwithstanding any other provision of this Certificate, (i) prior to the Trigger Date, directors may be removed with or without cause only upon the affirmative vote of stockholders representing at least a majority of the voting power of the then-outstanding shares of stock entitled to vote thereon, voting together as a single class, and (ii) on and after the Trigger Date, directors may only be removed for cause and only upon the affirmative vote of stockholders representing at least 66 2/3% of the voting power of the then-outstanding shares of Voting Stock, voting together as a single class. Any director may resign at any time upon notice in writing or by electronic transmission to the Corporation.
Section 7. Rights of Holders of Preferred Stock. Notwithstanding the provisions of this ARTICLE FIVE, whenever the holders of one or more series of Preferred Stock shall have the right, voting separately or together by series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorship shall be subject to the rights of such series of Preferred Stock. During any period when the holders of any series of Preferred Stock, voting separately as a series or together with one or more series, have the right to elect additional directors, then upon commencement and for the duration of the period during which such right continues: (i) the then otherwise total authorized number of directors of the Corporation shall automatically be increased by such specified number of directors, and the holders of such Preferred Stock shall be entitled to elect the additional directors so provided for or fixed pursuant to said provisions, and (ii) each such additional director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates pursuant to said provisions, whichever occurs earlier, subject to his or her earlier death, resignation, disqualification or removal. Except as otherwise provided by the Board in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such additional directors elected by the holders of such stock, or elected to fill any vacancies resulting from the death, resignation, disqualification, or removal of such additional directors, shall forthwith terminate (in which case each such director thereupon shall cease to be qualified as, and shall cease to be, a director), and the total authorized number of directors of the Corporation shall automatically be reduced accordingly.
Section 8. Advance Notice. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws.
Section 9. Chairman of the Board. So long as Holdings beneficially owns in the aggregate (directly or indirectly) at least 30% of the voting power of the outstanding shares of Voting Stock, the Chairman of the Board may be designated solely by Holdings.
Section 10. Board Committees. From and after the effective date hereof until such time as Holdings ceases to beneficially own Common Stock representing at least 10% of the total voting power of the then outstanding shares of Voting Stock, the Board shall not form, designate or change the membership of any committee of the Board unless Holdings has consented to such formation, designation or change in membership. Notwithstanding the preceding sentence, the consent of Holdings shall not be required if:
(a) Holdings has been provided the opportunity to designate a number of members of each committee of the Board equal to the nearest whole number greater than the product obtained by multiplying: (i) the percentage of Holdings’ voting power of the outstanding shares of Voting Stock and (ii) the number of positions, including any vacancies, on the applicable committee (each a “Holdings Committee Designee”); or
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(b) none of the directors nominated by Holdings pursuant to the Director Nomination Agreement is eligible to serve on the applicable committee under applicable law or Listing Standards, including any applicable independence requirements (subject in each case to any applicable exceptions, including those for newly public companies and for “controlled companies,” and any applicable phase-in periods).
Each Holdings Committee Designee shall have the right to remain on such committee until the next election of directors, regardless of the percentage of the aggregate number of shares of Common Stock held, directly or indirectly, by Holdings immediately following the closing of the IPO, as such number may be adjusted from time to time for any reorganization, recapitalization, stock dividend, stock split, reverse stock split or other similar changes in the Company’s capitalization (the “Original Amount”) beneficially owned by Holdings following such designation and the Board shall not remove any such Holdings Committee Designee from a committee prior to the next election of directors. Unless Holdings notifies the Corporation otherwise prior to the time the Board takes action to change the composition of a Board committee, and to the extent Holdings has the requisite percentage of the Original Amount to nominate a Board committee member at the time the Board takes action to change the composition of any such Board committee, each Holdings Committee Designee currently serving on a committee shall be presumed to be re-designated for such committee. Without limiting the remedies available to Holdings, the Corporation shall not consummate any act or transaction approved or recommended by a committee of the Board formed or designated in a manner inconsistent with this Section 10 without the prior written consent of Holdings.
Section 11. Matters Requiring Holdings Consent. For so long as Holdings owns at least 30% of the voting power of the outstanding shares of Voting Stock, neither the Corporation nor any of its subsidiaries shall take, or be permitted to take, any of the actions enumerated in this Section 11 (each, a “Significant Action”) without the prior written approval of Holdings:
(a) amending, modifying, waiving or repealing (whether by merger, consolidation, statutory conversion, transfer or otherwise) any provision of this Certificate and Bylaws (each as may be further amended, supplemented or waived in accordance with its terms) or equivalent organizational documents of the Corporation’s subsidiaries;
(b) without derogating from provisions of the Director Nomination Agreement and subject to the rights of holders of any series of Preferred Stock to elect directors, increasing or decreasing the size of the Board;
(c) (i) merging or consolidating with or into any other Person in a transaction valued at over $50.0 million; (ii) divesting, selling, or otherwise disposing of Corporation assets or intellectual property (other than (A) inventory sold in the ordinary course of business, (B) any transfer of assets of any wholly owned subsidiary of the Corporation to the Corporation or any of the Corporation’s other wholly owned subsidiaries, or (C) any transfer of assets) in a single transaction or series of related transactions with a fair market value of greater than or equal to $50.0 million; (iii) undertaking any transaction that would constitute a Change of Control Event, recapitalization, reorganization, restructuring, dissolution or liquidation of the Corporation or any of its subsidiaries, in each case with a value in excess of $50.0 million; and (iv) commencing any bankruptcy, administration, or similar insolvency proceeding;
(d) entering into any agreement or arrangement that would limit or restrict the Corporation’s or any of its subsidiaries’ (or any of their employees’, assets’, or intellectual property’s) ability to conduct business anywhere in the world, including any non-competition or non-solicitation covenants;
(e) granting any options, rights of first offer, rights of first refusal, rights of first consideration, or similar rights with respect to any securities of the Corporation;
(f) entering into any contract, agreement or arrangement with a customer, supplier or third party that does not specify a dollar amount for limit on liability;
(g) (i) entering into any joint venture, investment (other than an investment in, contract with or acquisition of any securities or assets of any of the Corporation’s wholly owned subsidiaries), recapitalization, reorganization or contract with any other Person (other than a wholly owned subsidiary); (ii) the acquisition of any securities or assets of another Person (other than a wholly owned subsidiary of the Corporation), in the case of any of the transactions set forth in clause (i) or (ii), whether in a single transaction or series of related transactions, with a fair market value, or a
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purchase price, in excess of $50.0 million; or (iii) the exercise of any ownership rights in respect of any of the foregoing in this Section 11(g);
(h) terminating, hiring or appointing the Chief Executive Officer of the Corporation (the “Chief Executive Officer”) (or other person performing the duties of principal executive officer);
(i) declaring, setting aside or paying any dividend or other distribution (whether in cash, stock or property) with respect to any shares of the Corporation or any of its subsidiaries;
(j) authorizing or making any capital expenditure or series of related capital expenditures in excess of $50.0 million within any 12-month period for a project or a related group of projects;
(k) entering into any new line of business not previously conducted by the Corporation or any of its subsidiaries;
(l) (i) approving or amending the compensation (including salary, bonus, equity or other benefits) of any senior executive who reports directly to the Chief Executive Officer; (ii) adopting, amending or terminating any bonus, equity compensation or benefit plan; (iii) changing the terms of employment of any direct report to the Chief Executive Officer;
(m) guaranteeing, assuming, incurring, prepaying or refinancing indebtedness for borrowed money by the Corporation or any of its subsidiaries (including indebtedness of any other Person existing at the time such other Person merged with or into or became a subsidiary of, or substantially all of its business and assets were acquired by, the Corporation or such subsidiary, and indebtedness secured by a lien encumbering any asset acquired by the Corporation or any such subsidiary) or the pledge of, or granting of a security interest in, any of the assets of the Corporation or any of its subsidiaries in excess of $100.0 million in any 12-month period for a project or a related group of projects (other than trade indebtedness incurred in the ordinary course of business by the Corporation and its subsidiaries);
(n) issuing, repurchasing or redeeming capital stock of the Corporation or the Corporation’s subsidiaries other than: (i) issuances to the Corporation or any of the Corporation’s wholly owned subsidiaries; or (ii) pursuant to an equity compensation plan approved by the Corporation’s stockholders or a majority of the directors on the Board designated by Holdings pursuant to Holdings’ rights to nominate directors pursuant to the Director Nomination Agreement;
(o) entering into any transactions, agreements, arrangements or payments (including the purchase, sale, lease or exchange of any real property, or rendering of any service or modification or amendment of any existing agreement or arrangement) with (i) any officer, director or employee of the Corporation or any subsidiary of the Corporation (other than in the ordinary course of business as part of travel advances, relocation advances or salary); or (ii) any other Person who beneficially owns greater than or equal to 5% of the Common Stock then outstanding (including such Person’s Affiliates), in each case that are material or involve aggregate payments or receipts in excess of $120,000;
(p) (i) commencing any liquidation, dissolution or voluntary bankruptcy, administration, recapitalization or reorganization of the Corporation or any of its subsidiaries in any form of transaction; (ii) making arrangements with creditors, or consenting to the entry of an order for relief in any involuntary case; (iii) taking the conversion of an involuntary case to a voluntary case; (iv) consenting to the appointment or taking possession by a receiver, trustee or other custodian for all or substantially all of its property; or (v) otherwise seeking the protection of any applicable bankruptcy or insolvency law, other than any such actions with respect to a non-material subsidiary where, in the good faith judgment of the Board, the maintenance or preservation of such subsidiary is no longer desirable in the conduct of the business of the Corporation or any of its material subsidiaries;
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(q) approving the annual operating plan, budget, or bonus plan of the Corporation or any of its subsidiaries, or any material amendment thereto; and
(r) making any gift or political or charitable donation from the Corporation or any of its subsidiaries.
Section 12. Enforcement of Director Nomination Agreement. The members of the Board not nominated by Holdings pursuant to the Director Nomination Agreement shall have the exclusive right to enforce, waive or take any other action with respect to the Director Nomination Agreement on behalf of the Corporation, and the directors nominated by Holdings shall have no vote and shall not be counted for quorum purposes with respect to such matter. Any reference in this Certificate or the Bylaws to a majority or other proportion of the directors shall, solely with respect to any matter to be voted upon by the Board falling within this Section 12, refer to a majority or other proportion of the votes of the directors.
Section 13. Definitions. Except as expressly provided otherwise in this Certificate, for purposes of this Certificate:
(a) “Affiliate” means, with respect to any specified Person, any other Person who or which, directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with such specified Person, including, without limitation, any general partner, officer, director, or manager of such Person and any venture capital fund now or hereafter existing that is controlled by one or more general partners or managing members of, or is under common investment management with, such Person;
(b) “Affiliated Companies” means (i) in respect of Holdings, any entity that controls, is controlled by, or under common control with Holdings, whether currently in existence or coming into existence in the future (other than the Corporation and any entity that is controlled by the Corporation), and (ii) in respect of the Corporation, any entity controlled by the Corporation;
(c) “beneficially own” has the meaning set forth in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); “beneficially owns,” “beneficially owned,” and “beneficial ownership” will have corresponding meanings;
(d) “Change of Control Event” means, with respect to the Corporation, (i) the closing of the sale, transfer, or other disposition of all or substantially all of the Corporation’s assets or intellectual property (determined on a consolidated basis), (ii) the consummation of the merger or consolidation of the Corporation with or into another entity (except a merger or consolidation in which the holders of capital stock of the Corporation immediately prior to such merger or consolidation continue to hold at least fifty percent (50%) of the then-outstanding Voting Stock of the Corporation (or voting stock of the surviving or acquiring entity)), (iii) any Person or group of Persons within the meaning of Section 13(d)(3) of the Exchange Act becomes the beneficial owner, directly or indirectly, of fifty percent (50%) or more of the then-outstanding Voting Stock of the Corporation, or (iv) the closing of the transfer (whether by merger, consolidation, or otherwise), in one transaction or a series of related transactions, to a Person or group of affiliated Persons (other than an underwriter of the Corporation’s securities), of the Corporation’s securities if, after such closing and as a result of such closing, such Person or group of affiliated Persons would hold fifty percent (50%) or more of the then-outstanding Voting Stock of the Corporation (or voting stock of the surviving or acquiring entity); provided, however, that there shall not be a Change of Control Event hereunder if (A) the sole purpose of a transaction is to change the state of incorporation of the Corporation or to create a holding company that will be owned in substantially the same proportions by the Persons who held the Corporation’s securities immediately prior to such transaction or (B) one or more Madison Entities or, in the event the Madison Entities and Larry W. Gies are deemed to be a group within the meaning of Section 13(d)(3) of the Exchange Act, one or more Madison Entities and Larry W. Gies, becomes the beneficial owner of fifty percent (50%) or more of the then-outstanding Voting Stock;
(e) “control” as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of Voting Stock, by agreement, or otherwise. The terms “controls,” “controlled,” and “controlling” will have corresponding meanings;
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(f) “Convertible Security” means any evidences of indebtedness, shares of Preferred Stock or other securities (other than shares of Class B Common Stock) convertible into or exchangeable for shares of Class A Common Stock or Class B Common Stock, either directly or indirectly;
(g) “Disability” means with respect to an individual, permanent and total disability such that the individual is unable to engage in any substantial gainful activity by reason of any medically determinable mental impairment which would reasonably be expected to result in death or which has lasted or would reasonably be expected to last for a continuous period of not less than 12 months as determined by a licensed medical practitioner. In the event of a dispute whether the individual has suffered a Disability, no Disability of the individual shall be deemed to have occurred unless and until an affirmative ruling regarding such Disability has been made by a court of competent jurisdiction, and such ruling has become final and nonappealable.
(h) “Governmental Authority” means any federal, state, tribal, local, or foreign governmental or quasi-governmental entity or municipality or subdivision thereof or any authority, administrative body, department, commission, board, bureau, agency, court, tribunal or instrumentality, arbitration panel, commission, or similar dispute resolving panel or body, or any applicable self-regulatory organization;
(i) “Holdings” means, Madison Industries Holdings LLC, an entity which is beneficially owned and controlled by Larry W. Gies, the Corporation’s founder;
(j) “Independent Directors” means the members of the Board designated as independent directors in accordance with Listing Standards without regard to the requirements of Rule 10A-3 under the Exchange Act;
(k) “IPO” means the Corporation’s first firm commitment underwritten public offering of a class of its Common Stock or a direct listing of a class of its Common Stock on a national securities exchange pursuant to an effective registration statement under the Securities Act (other than a registration statement relating either to the sale of securities to employees of the Corporation pursuant to its stock option, stock purchase, or similar plan);
(l) “Listing Standards” means (i) the requirements of any national stock exchange on which the Corporation’s equity securities are listed for trading that are generally applicable to companies with common equity securities listed thereon or (ii) if the Corporation’s equity securities are not listed for trading on a national stock exchange, the requirements of the New York Stock Exchange generally applicable to companies with equity securities listed thereon;
(m) “Option” means rights, options, restricted stock units or warrants to subscribe for, purchase or otherwise acquire shares of Class A Common Stock, Class B Common Stock or Convertible Securities (as defined above);
(n) “Permitted Transfer” means any Transfer of a share of Class B Common Stock to (i) Larry Gies, (ii) any Person that, directly or indirectly, is controlled by Larry Gies; or (iii) the personal representative of the estate of Larry Gies upon the death of Larry Gies, solely to the extent the executor is acting in the capacity as a personal representative of such estate
(o) “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or other form of business organization, whether or not regarded as a legal entity under applicable law, or any Governmental Authority or any department, agency, or political subdivision thereof;
(p) “Securities Act” means the Securities Act of 1933, as amended;
(q) “Transfer” of a share of Class B Common Stock means any sale, exchange, redemption, assignment, encumbrance, gift, pledge, retirement, transfer or other conveyance or alienation in any way of such share, whether or not for value and whether voluntary or involuntary or by operation of law, including, without limitation (i) assignments and distributions resulting from death, incompetency, bankruptcy, liquidation, and dissolution, or (ii) the transfer of Voting Control over such share by proxy or otherwise; provided, however, that the following shall not be considered a “Transfer” within the meaning of this Section 13(s) of this ARTICLE FIVE:
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(i)
the granting of a revocable proxy to officers or directors of the Corporation at the request of the Board in connection with actions to be taken at an annual or special meeting of stockholders;
(ii)
entering into a voting trust, agreement or arrangement (with or without granting a proxy) solely with stockholders who are holders of Class B Common Stock, which voting trust, agreement or arrangement does not involve any payment of cash, securities or other property to the holder of the shares subject thereto other than the mutual promise to vote shares in a designated manner; for the avoidance of doubt, any voting trust, agreement or arrangement entered into prior to the IPO Date shall not constitute a Transfer;
(iii)
entering into a support or similar voting trust, agreement or arrangement (with or without granting a proxy and other customary provisions contained in such agreements, including, without limitation, restrictions on disposition and voting with respect to alternative transactions) in connection with a Change of Control Event that has been approved by the Board or any agreement to tender shares pursuant to a merger agreement governed by Section 251(h) of the DGCL that has been approved by the Board;
(iv)
the pledge of shares of Class B Common Stock by a stockholder that creates a mere security interest in such shares pursuant to a bona fide loan or indebtedness transaction, including, without limitation, (A) any form of margin loan or (B) a bona fide hedging or other derivative transaction (including without limitation a swap, option or forward transaction (or combination thereof) and any related pledge); in each case, for so long as such stockholder continues to exercise Voting Control over such pledged shares; provided, however, that (x) a foreclosure on such shares or other similar action by the pledgee and (y) the settlement of any hedging or derivative transaction by delivery of shares of Class B Common Stock shall constitute a Transfer unless such foreclosure or similar action otherwise qualifies as a Permitted Transfer;
(v)
the fact that, as of the IPO Date or at any time after the IPO Date, the spouse of any holder of Class B Common Stock possesses or obtains an interest in such holder’s shares of Class B Common Stock arising solely by reason of the application of the laws of any jurisdiction, so long as no other event or circumstance shall exist or have occurred that constitutes a Transfer of such shares of Class B Common Stock; provided that any transfer of shares by any holder to such holder’s spouse, including a transfer in connection with a divorce proceeding, domestic relations order or similar legal requirement, shall constitute a “Transfer” of such unless otherwise exempt from the definition of Transfer; and
(vi)
entering into a trading plan pursuant to Rule 10b5-1 under the Securities Exchange Act, with a broker or other nominee; provided, however, that a sale of such shares of Class B Common Stock pursuant to such plan shall constitute a “Transfer” at the time of such sale;
(r) “Trigger Date” means the first date on which Holdings ceases to beneficially own in the aggregate (directly or indirectly) at least 40% of the voting power of the outstanding shares of Voting Stock;
(s) “Voting Control” means, with respect to a share of Class B Common Stock, the power (whether exclusive or shared) to vote or direct the voting of such share by proxy, voting agreement or otherwise; and
(t) “Voting Stock” means the capital stock of the Corporation then entitled to vote generally in the election of directors.
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ARTICLE SIX
Section 1. Limitation of Liability.
(a) To the fullest extent permitted by the DGCL as it now exists or may hereafter be amended, no director or officer of the Corporation shall be liable to the Corporation or its stockholders for monetary damages arising from a breach of fiduciary duty as a director or officer. All references in this Section 1 of ARTICLE SIX to a director shall be deemed to refer to such other person or persons, if any, who pursuant to a provision of this Certificate in accordance with Section 141(a) of the DGCL, exercise or perform any of the powers or duties otherwise conferred upon the Board by the DGCL.
(b) Any amendment, repeal, or modification of the foregoing paragraph shall not adversely affect any right or protection of a director or officer of the Corporation existing at the time of such amendment, repeal, or modification with respect to any act, omission, or other matter occurring prior to such amendment, repeal, or modification. Solely for purposes of Section 1(a) and 1(b) of this ARTICLE SIX, “officer” has the meaning provided in Section 102(b)(7) of the DGCL.
Section 2. Indemnification. The Corporation is authorized to indemnify the directors and officers of the Corporation to the fullest extent permissible under Delaware law.
ARTICLE SEVEN
Section 1. Action by Consent. Prior to the Trigger Date any action which is required or permitted to be taken by the Corporation’s stockholders may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of the Corporation’s stock entitled to vote thereon were present and voted. From and after the Trigger Date, any action required or permitted to be taken by the Corporation’s stockholders may be taken only at a duly called annual or special meeting of the Corporation’s stockholders and the power of stockholders to act by consent without a meeting is specifically denied; provided, however, that any action required or permitted to be taken by the holders of Preferred Stock, voting separately as a series or separately as a class with one or more other such series, may be taken without a meeting, without prior notice, and without a vote, to the extent expressly so provided in the resolutions creating such series of Preferred Stock.
Section 2. Special Meetings of Stockholders. Subject to the rights of the holders of any series of Preferred Stock then-outstanding and to the requirements of applicable law, special meetings of stockholders of the Corporation may be called only (i) by or at the direction of the Board or the Chairman of the Board pursuant to a written resolution adopted by the affirmative vote of the majority of the total number of directors that the Corporation would have if there were no vacancies, and (ii) prior to the Trigger Date, by the Chairman of the Board at the request of Holdings in the manner provided for in the Bylaws. Any business transacted at any special meeting of stockholders shall be limited to the purpose or purposes stated in the notice of the meeting.
ARTICLE EIGHT
Section 1. Certain Acknowledgments. It is hereby acknowledged that:
(a) (i) certain of the directors, partners, principals, officers, members, managers, employees, operating partners, and/or contractors of Holdings or its Affiliated Companies (as defined below) may serve as directors or officers of the Corporation, (ii) Holdings and its Affiliated Companies engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage and (iii) the Corporation and its Affiliated Companies may engage in material business transactions with Holdings and its Affiliated Companies, and the Corporation is expected to benefit therefrom; and
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(b) the provisions of this ARTICLE EIGHT are set forth to renounce to the fullest extent permitted by law certain business opportunities as they may involve Holdings and/or its Affiliated Companies and/or its respective directors, partners, principals, officers, members, managers, employees, operating partners and/or contractors, including any of the foregoing who serve as officers or directors of the Corporation (Holdings and/or its Affiliated Companies and all such other persons each an “Exempt Person” and collectively, the “Exempt Persons”).
Section 2. Renunciation of Corporate Opportunities. To the fullest extent permitted by the DGCL, but subject to Section 3 of this ARTICLE EIGHT, the Corporation hereby renounces any interest or expectancy in, or being offered an opportunity to participate in, any and all business opportunities: (a) originated or acquired by an Exempt Person; (b) in which the Exempt Person has an interest; or (c) that is received from any person or entity by an Exempt Person. The business opportunities renounced under this paragraph include any actual or potential investment or business opportunity or prospective economic advantage in which the Corporation could, but for this paragraph, have an interest or expectancy (including, without limitation, acquisitions, dispositions, business combinations, financings or investment opportunities), whether or not such opportunities are in the same or similar lines of business in which the Corporation is engaged or intends to engage.
Section 3. Excluded Opportunities. Notwithstanding the foregoing provisions of this ARTICLE EIGHT, but subject to Section 4 of this ARTICLE EIGHT, the Corporation does not renounce any business opportunity (a) expressly offered to an Exempt Person in his or her capacity as a director or officer of the Corporation; (b) offered to, or acquired by, an Exempt Person while he or she is a full-time employee of the Corporation; or (c) that has been developed using the confidential information of the Corporation or any of its subsidiaries.
Section 4. Certain Matters Deemed Not Corporate Opportunities. In addition to and notwithstanding the foregoing provisions of this ARTICLE EIGHT, a corporate opportunity shall not be deemed to belong to the Corporation if it is a business opportunity the Corporation is not financially able, contractually permitted or legally able to undertake, or that is, from its nature, not in the line of the Corporation’s business or is of no practical advantage to it, or that is one in which the Corporation has no interest or reasonable expectancy.
Section 5. Amendment of this Article. Notwithstanding anything to the contrary elsewhere contained in this Certificate, subject to the rights of the holders of any series of Preferred Stock then-outstanding, and in addition to any vote required by applicable law, to the fullest extent permitted by law, none of the alteration, amendment, or repeal of this ARTICLE EIGHT nor the adoption of any provision of this Certificate inconsistent with this ARTICLE EIGHT shall apply to or have any effect on the liability or alleged liability of any Exempt Person for or with respect to any activities or opportunities which such Exempt Person becomes aware of prior to such alteration, amendment, repeal, or adoption.
Section 6. Deemed Notice. Any person or entity purchasing or otherwise acquiring or holding any interest in any shares of the Corporation shall be deemed to have notice of and to have consented to the provisions of this ARTICLE EIGHT.
ARTICLE NINE
Section 1. Section 203 of the DGCL. The Corporation expressly elects not to be subject to the provisions of Section 203 of the DGCL.
Section 2. Business Combinations with Interested Stockholders. Notwithstanding any other provision in this Certificate to the contrary, the Corporation shall not engage in any Business Combination (as defined hereinafter), at any point in time at which the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, with any Interested Stockholder (as defined hereinafter) for a period of three years following the time that such stockholder became an Interested Stockholder, unless:
(a) prior to such time the Board approved either the Business Combination or the transaction which resulted in such stockholder becoming an Interested Stockholder;
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(b) upon consummation of the transaction which resulted in such stockholder becoming an Interested Stockholder, such 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 Voting Stock outstanding (but not the outstanding Voting Stock owned by such Interested Stockholder) those shares owned (i) by Persons (as defined hereinafter) who are directors and also officers of the Corporation, and (ii) employee stock plans of the Corporation 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
(c) at or subsequent to such time, the Business Combination is approved by the Board 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 which is not owned by such Interested Stockholder.
Section 3. Exceptions to Prohibition on Interested Stockholder Transactions. The restrictions contained in this ARTICLE NINE shall not apply if:
(a) a stockholder becomes an Interested Stockholder inadvertently and (i) as soon as practicable divests itself of ownership of sufficient shares so that the stockholder ceases to be an Interested Stockholder, and (ii) would not, at any time within the three-year period immediately prior to a Business Combination between the Corporation and such stockholder, have been an Interested Stockholder but for the inadvertent acquisition of ownership; or
(b) the Business Combination is proposed prior to the consummation or abandonment of and subsequent to the earlier of the public announcement or the notice required hereunder of a proposed transaction which (i) constitutes one of the transactions described in the second sentence of this Section 3(b) of ARTICLE NINE, (ii) is with or by a Person who either was not an Interested Stockholder during the previous three years or who became an Interested Stockholder with the approval of the Board, and (iii) is approved or not opposed by a majority of the directors then in office (but not less than one) who were directors prior to any Person becoming an Interested Stockholder during the previous three years or were recommended for election or elected to succeed such directors by a majority of such directors. The proposed transactions referred to in the preceding sentence are limited to: (x) a merger or consolidation of the Corporation (except for a merger in respect of which, pursuant to Section 251(f) of the DGCL, no vote of the stockholders of the Corporation is required); (y) a sale, lease, exchange, mortgage, pledge, transfer, or other disposition (in one transaction or a series of transactions), whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majority-owned subsidiary of the Corporation (other than to any direct or indirect wholly owned subsidiary or to the Corporation) having an aggregate market value equal to 50% or more of either that aggregate market value of all of the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding Stock (as defined hereinafter) of the Corporation; or (z) a proposed tender or exchange offer for 50% or more of the outstanding Voting Stock of the Corporation. The Corporation shall give not less than 20 days’ notice to all Interested Stockholders prior to the consummation of any of the transactions described in clause (x) or (y) of the second sentence of this Section 3(b) of ARTICLE NINE.
Section 4. Definitions. As used in this ARTICLE NINE only, and unless otherwise provided by the express terms of this ARTICLE NINE, the following terms shall have the meanings ascribed to them as set forth in this Section 4 and, to the extent such terms are defined elsewhere in this Certificate, such definitions shall not apply to this ARTICLE NINE:
(a) “Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another Person;
(b) “Associate,” when used to indicate a relationship with any Person, means (i) any corporation, partnership, unincorporated association, or other entity of which such Person is a director, officer, or general partner or is, directly or indirectly, the owner of 20% or more of any class of Voting Stock, (ii) any trust or other estate in which such Person has at least a 20% beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity, and (iii) any relative or spouse of such Person, or any relative of such spouse, who has the same residence as such Person;
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(c) “Business Combination” means:
(i)
any merger or consolidation of the Corporation (other than a merger effected pursuant to Sections 253 or 267 of the DGCL) or any direct or indirect majority-owned subsidiary of the Corporation with (A) the Interested Stockholder, or (B) any other corporation, partnership, unincorporated association, or entity if the merger or consolidation is caused by the Interested Stockholder and as a result of such merger or consolidation Section 2 of this ARTICLE NINE is not applicable to the surviving entity;
(ii)
any sale, lease, exchange, mortgage, pledge, transfer, or other disposition (in one transaction or a series of transactions), except proportionately as a stockholder of the Corporation, to or with the Interested Stockholder, whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majority-owned subsidiary of the Corporation which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding Stock of the Corporation;
(iii)
any transaction which results in the issuance or transfer by the Corporation or by any direct or indirect majority-owned subsidiary of the Corporation of any Stock of the Corporation or of such subsidiary to the Interested Stockholder, except (A) pursuant to the exercise, exchange, or conversion of securities exercisable for, exchangeable for, or convertible into Stock of the Corporation or any such subsidiary which securities were outstanding prior to the time that the Interested Stockholder became such, (B) pursuant to a merger under Sections 251(g), 253 or 267 of the DGCL, (C) pursuant to a dividend or distribution paid or made, or the exercise, exchange, or conversion of securities exercisable for, exchangeable for, or convertible into Stock of the Corporation or any such subsidiary which security is distributed, pro rata to all holders of a class or series of Stock of the Corporation subsequent to the time the Interested Stockholder became such, (D) pursuant to an exchange offer by the Corporation to purchase Stock made on the same terms to all holders of such Stock, or (E) any issuance or transfer of Stock by the Corporation; provided, however, that in no case under items (C)-(E) of this Section 4(c)(iii) of ARTICLE NINE shall there be an increase in the Interested Stockholder’s proportionate share of the Stock of any class or series of the Corporation or of the Voting Stock of the Corporation;
(iv)
any transaction involving the Corporation or any direct or indirect majority-owned subsidiary of the Corporation which has the effect, directly or indirectly, of increasing the proportionate share of the Stock of any class or series, or securities convertible into the Stock of any class or series, of the Corporation or of any such subsidiary which is owned by the Interested Stockholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of Stock not caused, directly or indirectly, by the Interested Stockholder; or
(v)
any receipt by the Interested Stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of the Corporation), of any loans, advances, guarantees, pledges, or other financial benefits (other than those expressly permitted in Sections 4(c)(i)-(iv) of ARTICLE NINE) provided by or through the Corporation or any direct or indirect majority-owned subsidiary of the Corporation;
(d) “control,” including the terms “controlling,” “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of Voting Stock, by contract or otherwise. A Person who is the owner of 20% or more of the outstanding Voting Stock of any corporation, partnership, unincorporated association, or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary; notwithstanding the foregoing, a presumption of control shall not apply where such Person holds Voting Stock, in good faith and not for the purpose of circumventing this ARTICLE NINE, as an agent, bank, broker, nominee, custodian, or trustee for one or more owners who do not individually or as a group (as such term is used in Rule 13d-5 under the Exchange Act (“Rule 13d-5”), as such Rule 13d-5 is in effect as of the date of this Certificate) have control of such entity;
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(e) “Interested Stockholder” means any Person (other than the Corporation and any direct or indirect majority-owned subsidiary of the Corporation) that (i) is the owner of 15% or more of the outstanding Voting Stock of the Corporation, or (ii) is an Affiliate or Associate of the Corporation and was the owner of 15% or more of the outstanding Voting Stock of the Corporation at any time within the three-year period immediately prior to the date on which it is sought to be determined whether such Person is an Interested Stockholder, and the affiliates and associates of such Person. Notwithstanding anything in this ARTICLE NINE to the contrary, the term “Interested Stockholder” shall not include: (x) Holdings or any of its Affiliated Companies, or any other Person with whom any of the foregoing are acting as a group or in concert for the purpose of acquiring, holding, voting, or disposing of shares of Stock of the Corporation; (y) any Person who would otherwise be an Interested Stockholder either in connection with or because of a transfer, sale, assignment, conveyance, hypothecation, encumbrance, or other disposition of 5% or more of the outstanding Voting Stock of the Corporation (in one transaction or a series of transactions) by Holdings or any of its Affiliates or Associates to such Person; provided, however, that such Person was not an Interested Stockholder prior to such transfer, sale, assignment, conveyance, hypothecation, encumbrance, or other disposition; or (z) any Person whose ownership of shares in excess of the 15% limitation set forth herein is the result of action taken solely by the Corporation, provided that, for purposes of this clause (z) only, such Person shall be an Interested Stockholder if thereafter such Person acquires additional shares of Voting Stock of the Corporation, except as a result of further action by the Corporation not caused, directly or indirectly, by such Person; provided, that, for the purpose of determining whether a Person is an Interested Stockholder, the Voting Stock of the Corporation deemed to be outstanding shall include Stock deemed to be owned by the Person through application of this definition of “owned” but shall not include any other unissued Stock of the Corporation which may be issuable pursuant to any agreement, arrangement, or understanding, or upon exercise of conversion rights, warrants, or options, or otherwise;
(f) “owner,” including the terms “own” and “owned,” when used with respect to any Stock, means a Person that individually or with or through any of its Affiliates or Associates beneficially owns such Stock, directly or indirectly; or has (A) the right to acquire such Stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement, or understanding, or upon the exercise of conversion rights, exchange rights, warrants, or options, or otherwise; provided, however, that a Person shall not be deemed the owner of Stock tendered pursuant to a tender or exchange offer made by such Person or any of such Person’s Affiliates or Associates until such tendered Stock is accepted for purchase or exchange, (B) the right to vote such Stock pursuant to any agreement, arrangement, or understanding; provided, however, that a Person shall not be deemed the owner of any Stock because of such Person’s right to vote such Stock if the agreement, arrangement, or understanding to vote such Stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to 10 or more Persons, or (C) has any agreement, arrangement, or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in (B) of this Section 4(f) of ARTICLE NINE), or disposing of such Stock with any other Person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such Stock;
(g) “Person” means any individual, corporation, partnership, unincorporated association, or other entity;
(h) “Stock” means, with respect to any corporation, any capital stock of such corporation and, with respect to any other entity, any equity interest of such entity; and
(i) “Voting Stock” means, with respect to any corporation, Stock of any class or series entitled to vote generally in the election of directors and, with respect to any entity that is not a corporation, any equity interest entitled to vote generally in the election of the governing body of such entity. Every reference to a percentage of Voting Stock shall refer to such percentage of the votes of such Voting Stock.
ARTICLE TEN
Section 1. Amendments to the Bylaws. Subject to the rights of holders of any series of Preferred Stock then-outstanding, in furtherance and not in limitation of the powers conferred by law, prior to the Trigger Date, the Bylaws may be amended, altered or repealed and new bylaws made by (i) the Board, or (ii) in addition to any vote of the holders of any class or series of capital stock of the Corporation required herein (including pursuant to any certificate of designation relating to any series of Preferred Stock) and any other vote otherwise required by applicable law or the Bylaws, the affirmative vote of the holders of at least a majority of the voting power of all of the then-outstanding shares of Voting Stock, voting together as a single class. On and after the Trigger Date, the Bylaws may be amended,
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altered, or repealed and new bylaws made by (i) the Board, or (ii) in addition to any vote of the holders of any class or series of capital stock of the Corporation required herein (including any certificate of designation relating to any series of Preferred Stock), and any other vote otherwise required by applicable law or the Bylaws, the affirmative vote of the holders of at least 66 2/3% of the voting power of the then-outstanding Voting Stock, voting together as a single class.
Section 2. Amendments to this Certificate. Subject to the rights of holders of any series of Preferred Stock then-outstanding, and in addition to any other vote required by law or this Certificate, no provision of ARTICLE FIVE, ARTICLE SIX, ARTICLE SEVEN, ARTICLE NINE, ARTICLE TEN, or ARTICLE ELEVEN of this Certificate may be altered, amended or repealed in any respect, nor may any provision of this Certificate or the Bylaws inconsistent therewith be adopted, unless (i) prior to the Trigger Date, such alteration, amendment, repeal or adoption is approved by the affirmative vote of the holders of a majority of the voting power of all outstanding shares of Voting Stock, voting together as a single class, and (ii) on and after the Trigger Date, such alteration, amendment, repeal or adoption is approved by the affirmative vote of holders of at least 66 2/3% of the voting power of all outstanding shares of Voting Stock, voting together as a single class.
ARTICLE ELEVEN
Section 1. Exclusive Forum. Unless this Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the United States District Court for the District of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or employee of the Corporation or any stockholder of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, the Certificate or the Bylaws, or (iv) any action asserting a claim governed by the internal affairs doctrine; provided that, for the avoidance of doubt, this provision, including for any “derivative action,” will not apply to suits to enforce a duty or liability created by the Securities Act, the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction. Unless this Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for resolutions of any complaint asserting a cause of action arising under the Securities Act.
Section 2. Notice. Any Person purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation (including, without limitation, shares of Common Stock) shall be deemed to have notice of and to have consented to the provisions of this ARTICLE ELEVEN.
ARTICLE TWELVE
If any provision or provisions of this Certificate shall be held to be invalid, illegal, or unenforceable as applied to any circumstance for any reason whatsoever, the validity, legality, and enforceability of such provisions in any other circumstance and of the remaining provisions of this Certificate (including, without limitation, each portion of any paragraph of this Certificate containing any such provision held to be invalid, illegal, or unenforceable that is not itself held to be invalid, illegal, or unenforceable) shall not, to the fullest extent permitted by applicable law, in any way be affected or impaired thereby.
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EX-3.2
EX-3.2
Filename: ck0002098430-ex3_2.htm · Sequence: 4
EX-3.2
Exhibit 3.2
AMENDED AND RESTATED BYLAWS
OF
MADISON AIR SOLUTIONS CORPORATION
A Delaware corporation
(Adopted as of April 15, 2026)
ARTICLE I
OFFICES
Section 1. Offices. Madison Air Solutions Corporation (the “Corporation”) may have an office or offices other than its registered office at such place or places, either within or outside the State of Delaware, as the Board of Directors of the Corporation (the “Board”) may from time to time determine or the business of the Corporation may require. The registered office of the Corporation in the State of Delaware shall be as stated in the Corporation’s certificate of incorporation as then in effect (as amended, restated, modified, and/or supplemented from time to time, including any certificate of designation relating to any series of preferred stock, the “Certificate of Incorporation”).
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. The Board may designate a place, if any, either within or outside the State of Delaware, as the place of meeting for any annual meeting or for any special meeting of stockholders. The Board may, in its sole discretion, determine that meetings of stockholders shall not be held at any place, but may in addition to or instead be held solely by means of remote communication (including virtually) in accordance with Section 211(a)(2) of the General Corporation Law of the State of Delaware (the “DGCL”).
Section 2. Annual Meeting. An annual meeting of the stockholders shall be held at such date and time as is specified by resolution of the Board. At the annual meeting, stockholders shall elect directors to succeed those whose terms expire at such annual meeting and transact such other business as properly may be brought before the annual meeting pursuant to Section 11 of this ARTICLE II of these bylaws (as amended, restated, modified, and/or supplemented from time to time, these “Bylaws”). The Board may postpone, reschedule, or cancel any annual meeting of stockholders previously scheduled by the Board.
Section 3. Special Meetings. Special meetings of the stockholders may only be called in the manner provided in the Certificate of Incorporation and may be held at such place, if any, either within or without the State of Delaware, as the Board, the Chairman of the Board (the “Chairman”) and, prior to the Trigger Date (as defined in the Certificate of Incorporation), by or at the direction of the Board, the Chairman calling such meeting at the request of Madison Industries Holdings LLC (“Holdings”), shall determine and state in the notice of meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. The Board may postpone, reschedule, or cancel any special meeting of stockholders previously scheduled by the Board; provided, however, that, prior to the Trigger Date, any special meeting called at the
request of Holdings or by any entity or person that controls, is controlled by, or under common control with Holdings (other than the Corporation and any entity that is controlled by the Corporation), or any investment vehicles, trusts or funds managed or controlled, directly or indirectly, by or otherwise affiliated with Holdings (collectively, the “Holdings Affiliates”) may not be postponed, rescheduled, or cancelled without the consent of the Holdings or such Holdings Affiliate, as the case may be, at whose request the meeting was originally called.
Section 4. Notice of Meetings. Whenever stockholders are required or permitted to take action at a meeting, notice of the meeting, which shall state the place, if any, date, and time of the meeting of the stockholders, the means of remote communications, if any, by which stockholders and proxyholders not physically present may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given, not less than 10 nor more than 60 days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting, except as otherwise provided herein or required by law (meaning, here and hereinafter, as required from time to time by the DGCL) or the Certificate of Incorporation.
(a) Form of Notice. All such notices shall be delivered in writing or by electronic transmission in the manner provided in Section 232 of the DGCL, or in any other manner permitted by the DGCL. If mailed, such notice shall be deemed given when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her, or its address as the same appears on the records of the Corporation. If delivered by courier service, notice shall be deemed given at the earlier of when the notice is received or left at such stockholder’s address as the same appears on the records of the Corporation. If given by electronic mail, notice shall be deemed given when directed to such stockholder’s electronic mail address unless the stockholder has notified the Corporation in writing or by electronic transmission of an objection to receiving notice by electronic mail or such notice is prohibited by the DGCL. Notice to stockholders may also be given by other forms of electronic transmission consented to by the stockholder. If given by facsimile telecommunication, such notice shall be deemed given when directed to a number at which the stockholder has consented to receive notice by facsimile. If given by a posting on an electronic network together with separate notice to the stockholder of such specific posting, such notice shall be deemed given upon the later of: (A) such posting; and (B) the giving of such separate notice. If notice is given by any other form of electronic transmission, such notice shall be deemed given when directed to the stockholder. An affidavit of the secretary of the Corporation (the “Secretary”) or an assistant secretary of the Corporation (the “Assistant Secretary”), the transfer agent of the Corporation (the “Transfer Agent”), or any other agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
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(b) Waiver of Notice. Whenever notice is required to be given under any provisions of the DGCL, the Certificate of Incorporation, or these Bylaws, a written waiver thereof, signed by the stockholder entitled to notice, or a waiver by electronic transmission given by the stockholder entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any meeting of the stockholders of the Corporation need be specified in any waiver of notice of such meeting. Attendance of a stockholder of the Corporation at a meeting of such stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened and does not further participate in the meeting.
Section 5. List of Stockholders. The Corporation shall prepare, no later than the tenth day before each meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting; provided, however, if the record date for determining the stockholders entitled to vote is less than 10 days before the meeting date, the list shall reflect the stockholders entitled to vote as of the 10th day before the meeting date, arranged in alphabetical order and showing the address of each such stockholder and the number of shares registered in the name of each such stockholder. Nothing contained in this section shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting for a period of 10 days ending on the day before the meeting date: (A) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting; or (B) during ordinary business hours, at the principal place of business of the Corporation. In the event the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. Except as otherwise provided by law, the list shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 5 or to vote in person or by proxy at any meeting of stockholders.
Section 6. Quorum. The holders of a majority in voting power of the outstanding capital stock entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders, except as otherwise provided by law, by the Certificate of Incorporation or these Bylaws. If a quorum is not present, the chair of the meeting or the holders of a majority of the voting power present in person or represented by proxy at the meeting and entitled to vote thereon may adjourn the meeting to another time and/or place from time to time until a quorum shall be present in person or represented by proxy. When a specified item of business requires a vote by a class or series (if the Corporation shall then have outstanding shares of more than one class or series) voting as a separate class or series, the holders of a majority in voting power of the outstanding stock of such class or series shall constitute a quorum (as to such class or series) for the transaction of such item of business. A quorum once established at a meeting shall not be broken by the withdrawal of enough votes to leave less than a quorum.
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Section 7. Adjourned Meetings. Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place. When a meeting is adjourned to another time or place (including an adjournment taken to address a technical failure to convene or continue a meeting using remote communication), notice need not be given of the adjourned meeting if the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are (i) announced at the meeting at which the adjournment is taken, (ii) displayed, during the time scheduled for the meeting, on the same electronic network used to enable stockholders and proxy holders to participate in the meeting by means of remote communication or (iii) set forth in the notice of meeting given in accordance with these Bylaws. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix a new record date for notice of such adjourned meeting in accordance with these Bylaws, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.
Section 8. Vote Required. Subject to the rights of the holders of any series of preferred stock then-outstanding, when a quorum has been established, all matters other than the election of directors shall be determined by the affirmative vote of the majority of voting power of capital stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter, unless by express provisions of the DGCL or other applicable law, the rules of any stock exchange upon which the Corporation’s securities are listed, any regulation applicable to the Corporation or its securities, the Certificate of Incorporation, or these Bylaws a minimum or different vote is required, in which case such minimum or different vote shall be the required vote for such matter. Except as otherwise provided in the Certificate of Incorporation, directors shall be elected by a plurality of the votes cast.
Section 9. Voting Rights. Subject to the rights of the holders of any series of preferred stock then-outstanding, except as otherwise provided by the DGCL or the Certificate of Incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote in person or by proxy for each share of capital stock held by such stockholder which has voting power upon the matter in question. Voting at meetings of stockholders need not be by written ballot.
Section 10. Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent to corporate action without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the Corporation generally.
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Section 11. Advance Notice of Stockholder Business and Director Nominations.
(a) Nominations of Directors and Other Business at Annual Meetings of Stockholders.
(i) Subject to paragraph 11(g), only such business, including nominations of persons for election to the Board, shall be conducted at an annual meeting of the stockholders as shall have been brought before the meeting: (A) as specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board or any duly authorized committee thereof; (B) by or at the direction of the Board or any duly authorized committee thereof; or (C) by any stockholder of the Corporation who (1) was a stockholder of record at the time of giving of notice provided for in Section 11(a)(iii) of this ARTICLE II, on the record date for determination of stockholders of the Corporation entitled to vote at the meeting, and at the time of the annual meeting, (2) at the time of the meeting, is entitled to vote at the meeting, and (3) complies with the notice procedures set forth in Section 11(a) of this ARTICLE II. For the avoidance of doubt, the foregoing clause (C) of this Section 11(a)(i) of ARTICLE II shall be the exclusive means for a stockholder to make nominations or propose such business (other than business included in the Corporation’s proxy materials pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or nominations or business brought by Holdings or Holdings Affiliates at any time prior to the Trigger Date before an annual meeting of stockholders
(ii) For nominations or other business (other than nominations or other business brought by Holdings and/or the Holdings Affiliates at any time prior to the date when Holdings and the Holdings Affiliates cease to beneficially own in the aggregate (directly or indirectly) at least 5% of the voting power of the then-outstanding shares of capital stock of the Corporation then entitled to vote generally in the election of directors (the “Advance Notice Trigger Date”)) to be properly brought before an annual meeting by a stockholder (any such stockholder of record, as required by Section 11(a)(i) of this ARTICLE II, proposing business or nominating persons for election to the Board at a meeting of stockholders, the “Noticing Stockholder”), the Noticing Stockholder must have given timely notice thereof in proper written form as described in Section 11(a)(iii) of this ARTICLE II to the Secretary; any such proposed business other than nominations of persons for election to the Board must be a proper matter for stockholder action; and the Noticing Stockholder and any other stockholder, if any, on whose behalf the business is being proposed or the nomination is being made (collectively with the Noticing Stockholder, the “Holders” and each a “Holder”) must have acted in accordance with the representations set forth in the Solicitation Statement (as defined in Section 11(a)(iii) of this ARTICLE II) required by these Bylaws and otherwise complied with the requirements with respect to such nominations or business set forth in this ARTICLE II of these Bylaws. To be timely, a stockholder’s notice for such nominations or other business (other than such a notice by Holdings and/or the Holdings Affiliates prior to the Advance Notice Trigger Date, which may be delivered at any time prior to the mailing of the definitive proxy statement pursuant to Section 14(a) of the Exchange Act related to the next annual meeting of stockholders) must be delivered and received by the Secretary at the principal executive offices of the Corporation in proper written form not less than 90 days and not
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more than 120 days prior to the first anniversary of the preceding year’s annual meeting of stockholders (which date shall, for purposes of the Corporation’s first annual meeting of stockholders after its shares of Class A common stock, par value $0.0000001 per share (“Common Stock”), are first publicly traded, be deemed to have occurred on April 15, 2026); provided, however, that if and only if the annual meeting is not scheduled to be held within a period that commences 30 days before such anniversary date and ends 70 days after such anniversary date, or if no annual meeting was held in the preceding year (other than for purposes of the Corporation’s first annual meeting of stockholders after its shares of Common Stock are first publicly traded), such stockholder’s notice must be delivered not earlier than the 120th day prior to the date of such annual meeting and by the later of: (A) the 10th day following the day the Public Announcement (as defined in Section 11(i) of this ARTICLE II) of the date of the annual meeting is first made; or (B) the date which is 90 days prior to the date of the annual meeting. In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. Notices delivered pursuant to Section 11(a) of this ARTICLE II will be deemed received on any given day only if received prior to the Close of Business (as defined in Section 11(i) of this ARTICLE II) on such day (and otherwise shall be deemed received on the next succeeding Business Day (as defined in Section 11(i) of this ARTICLE II)). The number of nominees a stockholder may nominate for election at the annual meeting on its own behalf (or in the case of one or more stockholders giving the notice on behalf of a beneficial owner, the number of nominees such stockholders may collectively nominate for election at the annual meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such annual meeting.
(iii) To be in proper written form, a Noticing Stockholder’s notice to the Secretary must set forth:
(A) as to any business that the Noticing Stockholder (as defined below) proposes to bring before the meeting:
(1) a brief description of the business desired to be brought before the meeting;
(2) the reasons for conducting such business at the meeting;
(3) a description of any direct or indirect material interest of any Holder or Stockholder Associated Person of such Holder in such business (whether by holdings of securities, or by virtue of being a creditor or contractual counterparty of the Corporation or of a third party, or otherwise);
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(4) the text of the proposal or business (including the specific text of any resolutions or actions proposed for consideration and if such business includes a proposal to amend these Bylaws, the specific language of the proposed amendment), which business must be a proper subject for stockholder action; and
(5) a description of all agreements, arrangements and understandings between each Holder and any Stockholder Associated Person of such Holder and any other person or persons (including their names) in connection with the proposal of such business by the Noticing Stockholder;
(B) as to each Holder:
(1) the name, age, citizenship, and address of the Noticing Stockholder, as they appear on the Corporation’s books, and, if different from the Corporation’s books, the name and address of the Noticing Stockholder;
(2) the name, age, citizenship, and address of such Holder and each Stockholder Associated Person of such Holder;
(3) as of the date of the notice (which information, for the avoidance of doubt, shall be updated and supplemented pursuant to Section 11(d)):
a. the class or series and number of shares of stock of the Corporation which are directly or indirectly held of record or beneficially owned by such Holder and each Stockholder Associated Person of such Holder (provided that, for the purposes of this Section 11(a)(iii)(B)(3), any such person shall in all events be deemed to beneficially own any shares of stock of the Corporation as to which such person has a right to acquire beneficial ownership at any time in the future (whether such right is exercisable immediately or only after the passage of time or the fulfillment of a condition or both)),
b. a description of all agreements, arrangements or understandings between such Holder and each Stockholder Associated Person of such Holder, on the one hand, and any other person or persons (naming such person or persons), on the other hand, in connection with such proposal of business and/or nomination, excluding engagements with financial, legal, strategic or other advisors in the ordinary course of business;
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c. a description of any Derivative Instrument (as defined in Section 11(i) of this ARTICLE II) directly or indirectly held or beneficially held by such Holder and any Stockholder Associated Person of such Holder;
d. whether and to the extent to which a Hedging Transaction (as defined in Section 11(i) of this ARTICLE II) has been entered into by or on behalf of such Holder or any Stockholder Associated Person of such Holder;
e. a description of any proxy, contract, arrangement, understanding, or relationship (other than a revocable proxy given in response to a public proxy solicitation made pursuant to, and in accordance with, the Exchange Act) pursuant to which each Holder and any Stockholder Associated Person of such Holder has any right to vote or has granted a right to vote any shares of stock or any other security of the Corporation;
f. a description of any agreement, arrangement or understanding with respect to any rights to dividends or payments in lieu of dividends on the shares of the Corporation owned beneficially by each Holder or any Stockholder Associated Person of such Holder that are separated or separable pursuant to such agreement, arraignment or understanding from the underlying shares of stock or other security of the Corporation; and
g. any direct or indirect legal, economic or financial interest (including Short Interest) of each Holder and each Stockholder Associated Person, if any, of such Holder in the outcome of any vote to be taken at any annual or special meeting of stockholders of the Corporation (the information required by this subclause (3) shall be referred to as the “Specified Information”); provided, however, that the Specified Information shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who otherwise would be required to disclose Specified Information hereunder solely as a result of being the stockholder directed to prepare and submit the notice required by this Section 11(a) on behalf of a beneficial owner;
(4) a representation by the Noticing Stockholder that such stockholder is a stockholder of record of the Corporation entitled to vote at such meeting on the nominations or other business proposed, that the Noticing Stockholder will continue to be a stockholder of record of the Corporation entitled to vote at such meeting on the matter proposed through
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the date of such meeting and that such Noticing Stockholder intends to appear in person or by proxy at such meeting to make such nominations or propose such business;
(5) all information that would be required to be set forth in a Schedule 13D filed pursuant to Rule 13d-1(a) or an amendment pursuant to Rule 13d-2(a) if such a statement were required to be filed under the Exchange Act and the rules and regulations promulgated thereunder by each Holder and each Stockholder Associated Person, if any, of such Holder;
(6) any other information relating to each Holder and each Stockholder Associated Person, if any, of such Holder that would be required to be disclosed in a proxy statement and form of proxy or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder;
(7) a representation by the Noticing Stockholder as to whether any Holder and/or any Stockholder Associated Person of such Holder intends or is part of a group which intends (A) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to elect the proposed nominee or approve or adopt the other business being proposed and/or (B) otherwise to solicit proxies or votes from stockholders in support of such nomination or other business; and, if applicable, (C) to solicit proxies in support of any proposed nominee in accordance with Rule 14a-19 promulgated under the Exchange Act (such representation, a “Solicitation Statement”);
(8) a certification by the Noticing Stockholder that each Holder and any Stockholder Associated Person of such Holder has complied with all applicable federal, state and other legal requirements in connection with its acquisition of shares of capital stock or other securities of the Corporation and/or such person’s acts or omissions as a stockholder of the Corporation;
(9) with respect to a nomination, the information and statement required by Rule 14a-19(b) of the Exchange Act (or any successor provision);
(10) to the extent known after reasonable investigation, the names and addresses of other stockholders (including beneficial owners) known by any Holder or Related Person of such Holder to provide financial support with respect to such proposal(s) or nomination(s) (it being understood that delivery of a revocable proxy with respect to such proposal or nomination shall not in itself require disclosure under this subclause (10)) and, to the extent known, the class and number of all shares of the
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Corporation’s capital stock owned beneficially or of record by such other stockholder(s) or other beneficial owner(s); and
(11) a representation by the Noticing Stockholder as to the accuracy of the information set forth in the notice.
(C) as to each person whom the Noticing Stockholder proposes to nominate for election or re-election as a director:
(1) the name, age, citizenship and address (business and residential) of such person;
(2) a complete biography and statement of such person’s qualifications, including the principal occupation or employment of such person (at present and for the past five years);
(3) a complete and accurate description of all agreements, arrangements and understandings between each Holder and any Stockholder Associated Person of such Holder, on the one hand, and such person, on the other hand, (at present and for the past three years) including, without limitation, a complete and accurate description of all direct and indirect compensation and other monetary agreements, arrangements and understandings at present and for the past three years between such person and such Holder(s) and any Stockholder Associated Person(s) of such Holder(s) (including all biographical, related party transaction and other information that would be required to be disclosed pursuant to the federal and state securities laws, including Rule 404 promulgated under Regulation S-K (“Regulation S-K”) under the Securities Act of 1933, as amended (the “Securities Act”) (or any successor provision), if any Holder or such Stockholder Associated Person were the “registrant” for purposes of such rule and such person were a director or executive officer of such registrant);
(4) any other information relating to such person that would be required to be disclosed in a proxy statement or any other filings required to be made in connection with solicitation of proxies for the election of directors in a contested election or that is otherwise required pursuant to and in accordance with Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder (including such person’s written consent to being named in the Corporation’s proxy statements and the accompanying proxy card as a proposed nominee of the Noticing Stockholder and to serving as a director if elected); and
(5) a completed and signed questionnaire, representation and agreement and any and all other information required by Section 11(d) of this ARTICLE II.
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In addition, any Noticing Stockholder who submits a notice pursuant to Section 11(a) of this ARTICLE II is required to update and supplement the information disclosed in such notice, if necessary, in accordance with Section 11(c) of this ARTICLE II.
(iv) Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted or nominations made at an annual meeting except in accordance with the procedures set forth in Section 11(a) of this ARTICLE II.
(v) Notwithstanding anything in Section 11(a)(ii) of this ARTICLE II to the contrary, if the number of directors to be elected to the Board is increased effective after the time period for which nominations would otherwise be due under Section 11(a)(ii) of this ARTICLE II and there is no Public Announcement naming the nominees for additional directorships at least 10 days prior to the last day a stockholder may deliver a notice of nomination in accordance with Section 11(a)(ii) of this ARTICLE II, a stockholder’s notice required by Section 11(a)(ii) of this ARTICLE II shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be received by the Secretary at the principal executive offices of the Corporation not later than the Close of Business on the 10th day following the day on which such Public Announcement is first made by the Corporation.
(b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the notice of meeting. Only persons who are nominated in accordance and compliance with the procedures set forth in this Section 11(b) of ARTICLE II shall be eligible for election to the Board at a special meeting of stockholders at which directors are to be elected. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the notice of meeting only: (i) by or at the direction of the Board, any duly authorized committee thereof; or (ii) provided that the Board has determined that directors are to be elected at such special meeting, by any stockholder of the Corporation who: (A) was a stockholder of record at the time of giving of notice provided for in this Section 11(b) of ARTICLE II, and at the time of the special meeting; (B) is entitled to vote at the meeting; and (C) complies with the notice procedures provided for in this Section 11(b) of ARTICLE II. For nominations to be properly brought by a stockholder at a special meeting of stockholders, the stockholder must have given timely notice thereof in proper written form as described in this Section 11(b) of ARTICLE II to the Secretary. To be timely, a stockholder’s notice for the nomination of persons for election to the Board (other than such a notice by Holdings and/or the Holdings Affiliates prior to the Advance Notice Trigger Date, which may be delivered at any time prior to the mailing of the definitive proxy statement pursuant to Section 14(a) of the Exchange Act related to the next annual meeting of stockholders) must be delivered and received by the Secretary at the principal executive offices of the Corporation not earlier than the 120th day prior to such special meeting and not later than the Close of Business on the later of the 90th day prior to such special meeting or the 10th day following the day on which a Public Announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting. In no event shall any adjournment or postponement of a special meeting or the announcement thereof commence a new time period (or extend any time period) for the giving of a stockholder’s notice
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as described above. Notices delivered pursuant to this Section 11(b) of ARTICLE II will be deemed received on any given day if received prior to the Close of Business on such day (and otherwise, on the next succeeding day). To be in proper written form, such stockholder’s notice shall set forth all of the information required by, and otherwise be in compliance with, Section 11(a)(iii) of this ARTICLE II. In addition, any stockholder who submits a notice pursuant to this Section 11(b) of ARTICLE II is required to update and supplement the information disclosed in such notice, if necessary, in accordance with Section 11(c) of this ARTICLE II and shall comply with Section 11(e) of this ARTICLE II. The number of nominees a stockholder may nominate for election at the special meeting on its own behalf (or in the case of one or more stockholders giving the notice on behalf of a beneficial owner, the number of nominees such stockholders may collectively nominate for election at the special meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such special meeting.
(c) Update and Supplement of Stockholder’s Notice. Any stockholder who submits a notice of proposal for business or nomination for election pursuant to this Section 11 of ARTICLE II is required to update and supplement the information disclosed in such notice, if necessary, so that the information provided or required to be provided in such notice shall be true and correct as of the record date for the meeting of stockholders and as of the date that is 10 Business Days prior to the meeting of stockholders or any adjournment, recess, rescheduling or postponement thereof, and such update and supplement shall be delivered and received by the Secretary at the principal executive offices of the Corporation not later than five Business Days after the record date for the meeting of stockholders in the case of the update and supplement required to be made as of the record date, and not later than eight Business Days prior to the date for the meeting of stockholders or any adjournment, recess, rescheduling or postponement thereof in the case of the update and supplement required to be made as of 10 Business Days prior to the meeting of stockholders or any adjournment, recess, rescheduling or postponement thereof. In addition, if the Noticing Stockholder has delivered to the Corporation a notice relating to the nomination of directors, the Noticing Stockholder shall deliver to the Corporation not later than eight Business Days prior to the date of the meeting or any adjournment, recess, rescheduling or postponement thereof (or, if not practicable, on the first practicable date prior to the date to which the annual meeting has been adjourned or postponed) reasonable evidence that it has complied with the requirements of Rule 14a-19 of the Exchange Act (or any successor provision). For the avoidance of doubt, the obligation to update and supplement set forth in this paragraph or any other Section of these Bylaws shall not limit the Corporation’s rights with respect to any deficiencies in any notice provided by a stockholder, extend any applicable deadlines hereunder or enable or be deemed to permit a stockholder who has previously submitted notice hereunder to amend or update any proposal or to submit any new proposal, including by changing or adding nominees, matters, business and/or resolutions proposed to be brought before a meeting of the stockholders.
(d) Submission of Questionnaire, Representation, and Agreement. To be qualified to be a nominee for election or re-election as a director of the Corporation, a person must deliver (in the case of a person nominated by a stockholder in accordance with Sections 11(a) or 11(b) of this ARTICLE II, in accordance with the time periods prescribed for delivery of notice under such sections) to the Secretary at the principal executive offices of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request of any stockholder of record identified by
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name within five Business Days of such written request) and a written representation and agreement (in the form provided by the Secretary upon written request of any stockholder of record identified by name within five Business Days of such written request) that such person: (i) is not and will not become a party to: (A) any agreement, arrangement, or understanding (whether written or oral) with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation; or (B) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law; (ii) is not and will not become a party to any agreement, arrangement, or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement, or indemnification in connection with service or action as a director that has not been disclosed to the Corporation; and (iii) would be in compliance, and if elected as a director of the Corporation will comply, with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality, and stock ownership and trading policies and guidelines of the Corporation that are publicly available.
(e) Update and Supplement of Nominee Information. The Corporation may also, as a condition to any such nomination or business being deemed properly brought before an annual meeting of stockholders, require any Holder or any proposed nominee to deliver to the Secretary, within five Business Days of any such request, such other information as may be reasonably required by the Board to determine whether such proposed nominee is eligible under the Certificate of Incorporation, these Bylaws, the rules or regulations of any stock exchange applicable to the Corporation, or any law or regulation applicable to the Corporation to serve as a director or independent director of the Corporation.
(f) Authority of Chair; General Provisions. Except as otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws and subject to the supervision of the Board, the chair of the meeting shall have the power and duty to determine whether any nomination or other business proposed to be brought before the meeting was made or brought in accordance with the procedures set forth in these Bylaws (including whether the Noticing Stockholder or any person, if any, on whose behalf the nomination or proposal is made or solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies or votes in support of such Noticing Stockholder’s nominee or proposal in compliance with such Noticing Stockholder’s representation as required by Section 11(a)(iii)(B)(7) of this ARTICLE II) and, if any nomination or other business is not made or brought in compliance with these Bylaws, to declare that such nomination or proposal of other business be disregarded and not acted upon.
(g) Effect on Other Rights. Nothing in these Bylaws shall be deemed to: (A) confer upon any stockholder a right to have a nominee or any proposed business included in the Corporation’s proxy statement, except as set forth in the Certificate of Incorporation or these Bylaws; (B) affect any rights of the holders of any series of preferred stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation; or (C) limit the exercise, method, or timing of the exercise of the rights of Holdings to nominate directors pursuant to that Director Nomination Agreement, dated as of April 15, 2026 (as amended and/or restated or supplemented from time to time, the “Director Nomination Agreement”)), by and among the
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Corporation and the investors named therein, which rights may be exercised without compliance with the provisions of Section 11 of this ARTICLE II.
(h) Definitions. For purposes of this Section 11 of ARTICLE II, the term:
(i) “Affiliate” has the meaning attributed to such term in Rule 12b-2 under the Exchange Act;
(ii) “Associate” has the meaning attributed to such term in Rule 12b-2 under the Exchange Act;
(iii) “Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday, and Friday that is not a day on which banking institutions in Chicago, IL or New York, NY are authorized or obligated by law or executive order to close;
(iv) “Close of Business” shall mean 5:00 p.m. local time at the principal executive offices of the Corporation, and if an applicable deadline falls on the Close of Business on a day that is not a Business Day, then the applicable deadline shall be deemed to be the Close of Business on the immediately preceding Business Day;
(v) “Derivative Instrument” means any short position, profits interest, option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, or any derivative or synthetic arrangement having the characteristics of a long position in any class or series of shares of the Corporation, or any contract, derivative, swap or other transaction or series of transactions designed to produce economic benefits and risks that correspond substantially to the ownership of any class or series of shares of the Corporation, including due to the fact that the value of such contract, derivative, swap or other transaction or series of transactions is determined by reference to the price, value or volatility of any class or series of shares of the Corporation, whether or not such instrument, contract or right shall be subject to settlement in the underlying class or series of shares of the Corporation, through the delivery of cash or other property, or otherwise, and without regard to whether the stockholder and any Stockholder Related Person may have entered into transactions that hedge or mitigate the economic effect of such instrument, contract or right, or any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation;
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(vi) “Hedging Transaction” means, with respect to a stockholder or any Stockholder Associated Person, any hedging or other transaction (such as borrowed or loaned shares) or series of transactions, or any other agreement, arrangement, or understanding, the effect or intent of which is to increase or decrease the voting power or economic or pecuniary interest of such stockholder or any Stockholder Associated Person with respect to the Corporation’s securities;
(vii) “Public Announcement” means disclosure (a) in a press release released by the Corporation, provided such press release is released by the Corporation following its customary procedures, as reported by the Dow Jones News Service, Associated Press, Business Wire, PR Newswire or a comparable news service, or is generally available on internet news sites, or (b) in a document publicly filed by the Corporation with the SEC pursuant to Sections 13, 14 or 15(d) of the Exchange Act;
(viii) “Stockholder Associated Person” means, with respect to any Holder:
(A) any participant (as defined in paragraphs (a)(ii)-(vi) of Instruction 3 to Item 4 of Schedule 14A of the Exchange Act, or any successor instructions) with such Holder in a solicitation of proxies in respect of any business or director nomination proposed by such stockholder;
(B) any Affiliate or Associate of such Holder; and
(C) any person who is a member of a “group” (as such term is used in Rule 13d-5 under the Exchange Act (or any successor provision)) with such Holder; and
(ix) “Short Interest” means any agreement, arrangement, understanding relationship or otherwise, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, involving any stockholder or any Stockholder Associated Person, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) or any class or series of the shares of the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such stockholder or any Stockholder Associated Person with respect to any class or series of the shares or other securities of the Corporation, or which provides, directly or indirectly, the opportunity to profit or share in any profit derived from any decrease in the price or value of any class or series of the shares or other securities of the Corporation; and
(x) For purposes of these Bylaws, the words “include,” “includes” or “including” is deemed to be followed by the words “without limitation.” Where a reference in these Bylaws is made to any statue or regulation, such reference shall be to (1) the statute or regulation as amended from time to time (except as context may otherwise require) and (2) any rules or regulations promulgated thereunder.
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(i) Proxy Card. Any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white, which shall be reserved for the exclusive use by the Board.
Section 12. Requirement to Appear. Notwithstanding anything to the contrary contained in Section 11, if the Noticing Stockholder that has provided timely notice of a nomination or item of business in accordance with Section 11 (or a qualified representative of the Noticing Stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present such nomination or item of business, such proposed business shall not be transacted and such nomination shall be disregarded, notwithstanding that such proposed business or such nomination is set forth in the notice of meeting or other proxy materials and notwithstanding that proxies or votes in respect of such vote may have been received by the Corporation. For purposes of these Bylaws, to be considered a qualified representative of the Noticing Stockholder, a person must be a duly authorized officer, manager or partner of such Noticing Stockholder or must be authorized by a writing executed by such Noticing Stockholder or an electronic transmission delivered by such Noticing Stockholder to act for such Noticing Stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.
Section 13. Fixing a Record Date for Stockholder Meetings. In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than 60 days nor less than 10 days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the day next preceding the day on which notice is first given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting in conformity herewith; and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance with the foregoing provisions of this Section 13 of ARTICLE II at the adjourned meeting.
Section 14. Record Date for Actions by Consent of Stockholders. Unless otherwise restricted by the Certificate of Incorporation, in order that the Corporation may determine the stockholders entitled to express consent to corporate action without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date for determining stockholders entitled to express consent to corporate action without a meeting is fixed by the Board of Directors, (i) when no prior action of the Board of Directors is required by law, the record date for such purpose shall be the
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first date on which a signed consent setting forth the action taken or proposed to be taken is delivered to the corporation in accordance with applicable law, and (ii) if prior action by the Board of Directors is required by law, the record date for such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.
Section 15. Conduct of Meetings.
(a) Generally. Meetings of stockholders shall be presided over by the Chairman, if any, or in the Chairman’s absence or disability, by the Chief Executive Officer (the “CEO”), or in the CEO’s absence or disability, by the President of the Corporation (the “President”), or in the President’s absence or disability, by a Vice President of the Corporation (the “Vice President”) (in the order as determined by the Board), or in the absence or disability of the foregoing persons by a director or officer designated by the Board, or in the absence or disability of such person, by a chair chosen at the meeting. The Secretary shall act as secretary of the meeting, but in the Secretary’s absence or disability, the chair of the meeting may appoint any person to act as secretary of the meeting.
(b) Rules, Regulations, and Procedures. The Board may adopt by resolution such rules, regulations, and procedures for the conduct of any meeting of stockholders of the Corporation as it shall deem appropriate including, without limitation, such guidelines and procedures as it may deem appropriate regarding the participation by means of remote communication of stockholders and proxyholders not physically present at a meeting. Except to the extent inconsistent with such rules, regulations, and procedures as adopted by the Board, the chair of any meeting of stockholders shall have the right and authority to prescribe such rules, regulations, and procedures and to do all such acts as, in the judgment of such chair, are appropriate for the proper conduct of the meeting. Such rules, regulations, or procedures, whether adopted by the Board or prescribed by the chair of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies, or such other persons as the chair of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; (v) limitations on the time allotted to questions or comments by participants; and (vi) restrictions on the use of mobile phones, audio or video recording devices, and similar devices at the meeting. The chair of the meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a nomination or matter or business was not properly brought before the meeting and if such chair should so determine, such chair shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board or the chair of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The chair of the meeting shall announce at the meeting when the polls for each matter to be voted upon at the meeting will be opened and closed. After the polls close, no ballots, proxies, or votes or any revocations or changes thereto may be accepted. The chair of the meeting shall
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have the power, right, and authority, for any or no reason, to convene, recess, and/or adjourn any meeting of stockholders.
(c) Inspectors of Elections. The Corporation may, and to the extent required by law shall, in advance of any meeting of stockholders, appoint one or more inspectors of election to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the chair of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by law, inspectors may be officers, employees, or agents of the Corporation. No person who is a candidate for an office at an election may serve as an inspector at such election. Each inspector, before entering upon the discharge of such inspector’s duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector shall have the duties prescribed by law and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by law.
Section 16. Remote Communication. If authorized by the Board in its sole discretion, and subject to such guidelines and procedures as the Board may adopt, stockholders and proxyholders not physically present at a meeting of stockholders may, by means of remote communication:
(a) participate in a meeting of stockholders; and
(b) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication;
provided that
(c) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder;
(d) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings; and
(e) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.
ARTICLE III
DIRECTORS
Section 1. General Powers. Except as otherwise provided in this Certificate of Incorporation or the DGCL, the business and affairs of the Corporation shall be managed by or under the direction of the Board.
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Section 2. Regular Meetings and Special Meetings. Regular meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by resolution of the Board and publicized among all directors. Special meetings of the Board may be called by: (i) the Chairman, if any; (ii) by the Secretary upon the written request of a majority of the directors then in office; or (iii) if the Board then includes a director nominated or designated for nomination by Holdings or any Holdings Affiliate, by any director so nominated or designated, and in each case shall be held at the place, if any, on the date and at the time as he, she, or they shall fix. Any and all business may be transacted at a special meeting of the Board.
Section 3. Notice of Meetings. Notice of regular meetings of the Board need not be given except as otherwise required by law or these Bylaws. Notice of each special meeting of the Board, and of each regular and annual meeting of the Board for which notice is required, shall be given by the Secretary as hereinafter provided in this Section 3 of this ARTICLE III. Such notice shall state the date, time, and place, if any, of the meeting. Notice of any special meeting, and of any regular or annual meeting for which notice is required, shall be given to each director at least: (A) 24 hours before the meeting if by telephone or by being personally delivered or sent by overnight courier, telecopy, electronic transmission, email, or similar means; or (B) five days before the meeting if delivered by mail to the director’s residence or usual place of business. Such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage prepaid, or when transmitted if sent by telex, telecopy, electronic transmission, email, or similar means. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board need be specified in the notice or waiver of notice of such meeting.
Section 4. Waiver of Notice. Any director may waive notice of any meeting of directors by a writing signed by the director or by electronic transmission. Any member of the Board or any committee thereof who is present at a meeting shall have waived notice of such meeting except when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened and does not further participate in the meeting. Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the Secretary immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action.
Section 5. Chairman of the Board, Quorum, Required Vote and Adjournment. Subject to provisions regarding the appointment of the Chairman in the Certificate of Incorporation and the Director Nomination Agreement, the Board may elect the Chairman. The Chairman must be a director and may be a director who is also currently an officer of the Corporation. Subject to the provisions of these Bylaws and the direction of the Board, he, she, or they shall perform all duties and have all powers which are commonly incident to the position of Chairman or which are delegated to him or her by the Board, preside at all meetings of the stockholders and Board at which he or she is present and have such powers and perform such duties as the Board may from time to time prescribe. If the Chairman is not present at a meeting of the Board, the CEO (if the CEO is a director and is not also the Chairman) shall preside at such meeting, and, if the CEO is not present at such meeting, a majority of the directors present at such meeting shall elect one of the directors present at the meeting to so preside. At all meetings of the Board, a majority of the
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directors then in office shall constitute a quorum for the transaction of business, provided, however, that a quorum shall never be less than one-third the total number of directors. Unless by express provision of an applicable law, the Certificate of Incorporation, or these Bylaws a different vote is required, the vote of a majority of directors present at a meeting at which a quorum is present shall be the act of the Board. At any meeting of the Board, business shall be transacted in such order and manner as the Board may from time to time determine.
Section 6. Committees.
(a)
Subject to provisions regarding committee designations in the Certificate of Incorporation, the Board may designate one or more committees, including an executive committee, consisting of one or more of the directors of the Corporation, and any committees required by the rules and regulations of such exchange as any securities of the Corporation are listed. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Except to the extent restricted by applicable law or the Certificate of Incorporation, each such committee, to the extent provided by the DGCL and in the resolution creating it, shall have and may exercise all the powers and authority of the Board. Each such committee shall serve at the pleasure of the Board. Each committee shall keep regular minutes of its meetings and report the same to the Board upon request.
(b)
Each committee of the Board may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the Board designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. All matters shall be determined by a majority vote of the members present at a meeting at which a quorum is present. Unless otherwise provided in such a resolution, in the event that a member and that member’s alternate, if alternates are designated by the Board, of such committee is or are absent or disqualified, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member.
Section 7. Action by Written Consent. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or such committee, as the case may be, consent thereto in writing or by electronic transmission. After the action is taken, the consent or consents relating thereto shall be filed with the minutes of proceedings of the Board or committee in the same paper form or electronic form as the minutes are maintained.
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Section 8. Compensation. The Board shall have the authority to fix the compensation, including fees, reimbursement of expenses, and equity compensation, of directors for services to the Corporation in any capacity, including for attendance of meetings of the Board or participation on any committees. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.
Section 9. Reliance on Books and Records. A member of the Board, or a member of any committee designated by the Board, shall, in the performance of such member’s duties, be fully protected in relying in good faith upon records of the Corporation and upon such information, opinions, reports, or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees of the Board, or by any other person as to matters the member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.
Section 10. Telephonic and Other Meetings. Unless restricted by the Certificate of Incorporation, any one or more members of the Board or any committee thereof may participate in a meeting of the Board or such committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation by such means shall constitute presence in person at a meeting.
ARTICLE IV
OFFICERS
Section 1. Number and Election. Subject to the authority of the CEO to appoint officers as set forth in Section 11 of this ARTICLE IV, the officers of the Corporation shall be elected by the Board and may consist of a CEO, a President, one or more Vice Presidents, a Secretary, a Chief Financial Officer (the “CFO”), a Treasurer (the “Treasurer”), and such other officers and assistant officers as may be deemed necessary or desirable by the Board. Any number of offices may be held by the same person. In its discretion, the Board may choose not to fill any office for any period as it may deem advisable.
Section 2. Term of Office. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation, or removal as hereinafter provided.
Section 3. Removal. Any officer or agent of the Corporation may be removed with or without cause by the Board, a duly authorized committee thereof or by such officers as may be designated by a resolution of the Board, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Any officer appointed by the CEO in accordance with Section 11 of this ARTICLE IV may also be removed by the CEO in his or her sole discretion.
Section 4. Vacancies. Any vacancy occurring in any office because of death, resignation, removal, disqualification, or otherwise may be filled by the Board or the CEO in accordance with Section 11 of this ARTICLE IV.
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Section 5. Compensation. Compensation of all executive officers shall be approved by the Board or a duly authorized committee thereof, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the Corporation.
Section 6. Chief Executive Officer. The CEO shall have the powers and perform the duties incident to that position. The CEO shall, in the absence of the Chairman, or if a Chairman shall not have been elected, preside at each meeting of (a) the Board if the CEO is a director and (b) the stockholders. Subject to the powers of the Board and the Chairman, the CEO shall be in general and active charge of the entire business and affairs of the Corporation and shall be its chief policy-making officer. The CEO shall have such other powers and perform such other duties as may be prescribed by the Board or provided in these Bylaws. The CEO is authorized to execute bonds, mortgages, and other contracts requiring a seal under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board to some other officer or agent of the Corporation. Whenever the President is unable to serve, by reason of sickness, absence, or otherwise, the CEO shall perform all the duties and responsibilities and exercise all the powers of the President.
Section 7. President. The President of the Corporation shall, subject to the powers of the Board, the Chairman, and the CEO, have general charge of the business, affairs, and property of the Corporation, and, in the absence of the CEO, control over its officers, agents, and employees. The President shall see that all orders and resolutions of the Board are carried into effect. The President is authorized, in the absence of the CEO, to execute bonds, mortgages, and other contracts requiring a seal under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board to some other officer or agent of the Corporation. The President shall, in the absence of the CEO, act with all of the powers and be subject to all of the restrictions of the CEO. The President shall have such other powers and perform such other duties as may be prescribed by the Chairman, the CEO, the Board, or as may be provided in these Bylaws or otherwise are incident to the position of President.
Section 8. Vice Presidents. The Vice President, or if there shall be more than one, the Vice Presidents, in the order determined by the Board or the Chairman, shall, perform such duties and have such powers as the Board, the Chairman, the CEO, the President, or these Bylaws may, from time to time, prescribe or which otherwise are incident to the position of Vice President. The Vice Presidents may also be designated as Executive Vice Presidents or Senior Vice Presidents, as the Board may from time to time prescribe.
Section 9. Secretary and Assistant Secretaries. The Secretary shall attend all meetings of the Board (other than executive sessions thereof) and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose or shall ensure that his or her designee attends each such meeting to act in such capacity. Under the Board’s supervision, the Secretary shall give, or cause to be given, all notices required to be given by these Bylaws or by law; shall have such powers and perform such duties as the Board, the Chairman, the CEO, the President, or these Bylaws may, from time to time, prescribe or which otherwise are incident to the position of Secretary; and shall have custody of the corporate seal of the Corporation. The Secretary, or an Assistant Secretary, shall have authority to affix the corporate
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seal to any instrument requiring it and when so affixed, it may be attested by his or her signature or by the signature of such Assistant Secretary. The Board may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his or her signature. The Assistant Secretary, or if there be more than one, any of the Assistant Secretaries, shall in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board, the Chairman, the CEO, the President, or Secretary may, from time to time, prescribe.
Section 10. Chief Financial Officer and Treasurer. The CFO shall have the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation as shall be necessary or desirable in accordance with applicable law or generally accepted accounting principles; shall deposit all monies and other valuable effects in the name and to the credit of the Corporation as may be ordered by the Chairman or the Board; shall receive, and give receipts for, moneys due and payable to the Corporation from any source whatsoever; shall cause the funds of the Corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; and shall render to the Board, at its regular meeting or when the Board so requires, an account of the financial condition and operations of the Corporation; shall have such powers and perform such duties as the Board, the Chairman, the CEO, the President, or these Bylaws may, from time to time, prescribe or which otherwise are incident to the position of CFO. The Treasurer, if any, shall in the absence or disability of the CFO, perform the duties and exercise the powers of the CFO, subject to the power of the Board. The Treasurer, if any, shall perform such other duties and have such other powers as the Board may, from time to time, prescribe.
Section 11. Appointed Officers. In addition to officers designated by the Board in accordance with this ARTICLE IV, the CEO shall have the authority to appoint other officers below the level of Board appointed Vice President as the CEO may from time to time deem expedient and may designate for such officers titles that appropriately reflect their positions and responsibilities. Such appointed officers shall have such powers and shall perform such duties as may be assigned to them by the CEO or the senior officer to whom they report, consistent with corporate policies. An appointed officer shall serve until the earlier of such officer’s resignation or such officer’s removal by the CEO or the Board at any time, either with or without cause.
Section 12. Other Officers, Assistant Officers and Agents. Officers, assistant officers and agents, if any, other than those whose duties are provided for in these Bylaws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the Board and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board.
Section 13. Officers’ Bonds or Other Security. If required by the Board, any officer of the Corporation shall give a bond or other security for the faithful performance of such officer’s duties, in such amount and with such surety as the Board may require.
Section 14. Delegation of Authority. The Board may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select.
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ARTICLE V
CERTIFICATES OF STOCK
Section 1. Form. The shares of stock of the Corporation shall be represented by certificates, provided that the Board may provide by resolution that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. If shares are represented by certificates, the certificates shall be in such form as required by applicable law and as determined by the Board. Each certificate shall certify the number of shares owned by such holder in the Corporation and shall be signed by, or in the name of the Corporation by two authorized officers of the Corporation including, but not limited to, the Chairman (if an officer), the CEO, the President, a Vice President, the CFO, the Treasurer, the Secretary and an Assistant Secretary. Any or all signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer, transfer agent, or registrar of the Corporation whether because of death, resignation, or otherwise before such certificate or certificates have been issued by the Corporation, such certificate or certificates may nevertheless be issued as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer, transfer agent, or registrar of the Corporation at the date of issue. All certificates for shares shall be consecutively numbered or otherwise identified. The Board may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent, registrar, or both in connection with the transfer of any class or series of securities of the Corporation. The Corporation, or its designated transfer agent or other agent, shall keep a book or set of books to be known as the stock transfer books of the Corporation, containing the name of each holder of record, together with such holder’s address and the number and class or series of shares held by such holder and the date of issue. When shares are represented by certificates, the Corporation shall issue and deliver to each holder to whom such shares have been issued or transferred, certificates representing the shares owned by such holder, and shares of stock of the Corporation shall only be transferred on the books of the Corporation by the holder of record thereof or by such holder’s attorney duly authorized in writing, upon surrender to the Corporation or its designated transfer agent or other agent of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization and other matters as the Corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. When shares are not represented by certificates, shares of stock of the Corporation shall only be transferred on the books of the Corporation by the holder of record thereof or by such holder’s attorney duly authorized in writing, with such evidence of the authenticity of such transfer, authorization and other matters as the Corporation may reasonably require, and accompanied by all necessary stock transfer stamps, and within a reasonable time after the issuance or transfer of such shares, the Corporation shall, if required by applicable law, send the holder to whom such shares have been issued or transferred a written statement of the information required by applicable law. Unless otherwise provided by applicable law, the Certificate of Incorporation, these Bylaws, or any other instrument, the rights
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and obligations of the holders of uncertificated stock, and the rights and obligations of the holders of certificates representing stock of the same class and series shall be identical.
Section 2. Lost Certificates. The Corporation may issue or direct a new certificate or certificates or uncertificated shares to be issued in place of any certificate or certificates previously issued by the Corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the owner of the lost, stolen, or destroyed certificate. When authorizing such issue of a new certificate or certificates or uncertificated shares, the Corporation may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his or her legal representative, to give the Corporation a bond in such sum as it may direct, sufficient to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft, or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.
Section 3. Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its records as the owner of shares of stock to receive dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner, except as otherwise required by applicable law. The Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares of stock on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise required by applicable law.
Section 4. Fixing a Record Date for Purposes Other Than Stockholder Meetings or Actions by Written Consent. In order that the Corporation may determine the stockholders entitled to receive payment of any dividend, other distribution or allotment, or any rights, or the stockholders entitled to exercise any rights in respect of any change, conversion, or exchange of stock, or for the purposes of any other lawful action (other than stockholder meetings and stockholder consents which are expressly governed by Sections 12, 13 and 14 of ARTICLE II hereof), the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
ARTICLE VI
GENERAL PROVISIONS
Section 1. Dividends. Subject to and in accordance with applicable law, the Certificate of Incorporation and any certificate of designation relating to any series of preferred stock, dividends upon the shares of capital stock of the Corporation may be declared and paid by the Board in accordance with applicable law. Dividends may be paid in cash, in property, or in shares of the Corporation’s capital stock, subject to the provisions of applicable law and the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends a reserve or reserves for any proper purpose. The Board may modify or abolish any such reserves in the manner in which they were created.
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Section 2. Checks, Notes, Drafts, Etc. All checks, notes, drafts, or other orders for the payment of money of the Corporation shall be signed, endorsed, or accepted in the name of the Corporation by such officer, officers, person, or persons as from time to time may be designated by the Board, or by an officer or officers authorized by the Board to make such designation.
Section 3. Contracts. In addition to the powers otherwise granted to officers pursuant to ARTICLE IV, the Board may authorize any officer or officers, or any agent or agents, in the name and on behalf of the Corporation to enter into or execute and deliver any and all deeds, bonds, mortgages, contracts, and other obligations or instruments, and such authority may be general or confined to specific instances.
Section 4. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board.
Section 5. Corporate Seal. The Board may provide a corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the Corporation and the words “Corporate Seal, Delaware.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Notwithstanding the foregoing, no seal shall be required by virtue of Section 5 of this ARTICLE VI.
Section 6. Voting Securities Owned By Corporation. Voting securities in any other corporation or entity held by the Corporation shall be voted by the Chairman, CEO, the President, or the CFO, unless the Board specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution.
Section 7. Facsimile/Electronic Signatures. In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, Docusign, facsimile, and other forms of electronic signatures of any officer or director of the Corporation may be used to the fullest extent permitted by applicable law.
Section 8. Section Headings. Section headings in these Bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.
Section 9. Inconsistent Provisions. In the event that any provision (or part thereof) of these Bylaws is or becomes inconsistent with any provision of the Certificate of Incorporation, the DGCL, any other applicable law, or the Director Nomination Agreement, the provision (or part thereof) of these Bylaws shall be construed to be consistent with such other provision or provisions, and to the extent such provision may not be so construed, such provision shall be deemed amended to incorporate such other provision so as to eliminate any such inconsistency and as so amended shall be given full force and effect.
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ARTICLE VII
INDEMNIFICATION
Section 1. Right to Indemnification and Advancement. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including involvement, without limitation, as a witness) in any actual or threatened action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a “proceeding”), by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, manager, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, or other enterprise, including service with respect to an employee benefit plan (an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director or officer or in any other capacity while serving as a director or officer, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended, against all expense, liability, and loss (including attorneys’ fees and related disbursements, judgments, fines, excise taxes, or penalties under the Employee Retirement Income Security Act of 1974, as amended from time to time (“ERISA”) and any other penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith, and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the indemnitee’s heirs, executors, and administrators; provided, however, that, except as provided in Section 2 of this ARTICLE VII with respect to proceedings to enforce rights to indemnification and advance of expenses (as defined herein), the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized in the specific case by the Board of the Corporation. In addition to the right to indemnification conferred herein, an indemnitee shall also have the right, to the fullest extent not prohibited by law, to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition (an “advance of expenses”); provided, however, that if and to the extent that the DGCL requires, an advance of expenses shall be made only upon delivery to the Corporation of an undertaking (an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under Section 1 of this ARTICLE VII or otherwise. The Corporation may also, by action of its Board, provide indemnification and advancement to employees and agents of the Corporation. Any reference to an officer of the Corporation in this ARTICLE VII shall be deemed to refer exclusively to the Chairman, CEO, President, CFO, Secretary, and Treasurer appointed pursuant to ARTICLE IV, and to any Vice President, Assistant Secretary, assistant treasurer, or other officer of the Corporation appointed by the Board or the CEO pursuant to ARTICLE IV of these Bylaws, and any reference to an officer of any other enterprise shall be deemed to refer exclusively to an officer appointed by the Board or equivalent governing body of such other entity pursuant to the certificate of incorporation and bylaws or equivalent organizational documents of such other enterprise. The fact that any person who is or was an employee of the Corporation or an employee of any other enterprise has been given or has used the title of “Vice President” or any other title, including any title granted to such person by the CEO pursuant to Section 11 of ARTICLE IV, that could be construed to suggest or imply that such person is or may be an officer of the Corporation or of such other enterprise shall not result in such person being constituted as, or being deemed to be, an officer of the Corporation
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or of such other enterprise for purposes of this ARTICLE VII unless such person’s appointment to such office was approved by the Board pursuant to ARTICLE IV.
Section 2. Procedure for Indemnification. Any claim for indemnification or advance of expenses by an indemnitee under Section 2 of this ARTICLE VII shall be made promptly, and in any event within 45 days (or, in the case of an advance of expenses, 20 days, provided that the director or officer has delivered the undertaking contemplated by Section 1 of this ARTICLE VII if required), upon the written request of the indemnitee. If the Corporation denies a written request for indemnification or advance of expenses, in whole or in part, or if payment in full pursuant to such request is not made within 45 days (or, in the case of an advance of expenses, 20 days, provided that the indemnitee has delivered the undertaking contemplated by Section 1 of this ARTICLE VII if required), the right to indemnification or advances as granted by this ARTICLE VII shall be enforceable by the indemnitee in any court of competent jurisdiction. Such person’s costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation to the fullest extent permitted by applicable law. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of expenses where the undertaking required pursuant to Section 1 of this ARTICLE VII, if any, has been tendered to the Corporation) that the claimant has not met the applicable standard of conduct which makes it permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed, but the burden of proof shall be on the Corporation to the fullest extent permitted by law. Neither the failure of the Corporation (including the Board, a committee thereof, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including the Board, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.
Section 3. Insurance. The Corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was or has agreed to become a director, officer, employee, or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, partner, member, trustee, administrator, employee, or agent of another corporation, partnership, joint venture, limited liability company, trust, or other enterprise against any expense, liability, or loss asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify such person against such expenses, liability, or loss under the DGCL.
Section 4. Service for Subsidiaries. Any person serving as a director, officer, partner, member, trustee, administrator, employee, or agent of another corporation, partnership, limited liability company, joint venture, trust, or other enterprise, at least 50% of whose equity interests are owned by the Corporation (a “subsidiary” for purposes of this ARTICLE VII) shall be conclusively presumed to be serving in such capacity at the request of the Corporation.
Section 5. Reliance. Persons who after the date of the adoption of this provision become or remain directors or officers of the Corporation or who, while a director or officer of the Corporation, become or remain a director, manager, officer, employee, or agent of a subsidiary,
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shall be conclusively presumed to have relied on the rights to indemnity, advance of expenses, and other rights contained in this ARTICLE VII in entering into or continuing such service. To the fullest extent permitted by law, the rights to indemnification and to the advance of expenses conferred in this ARTICLE VII shall apply to claims made against an indemnitee arising out of acts or omissions which occurred or occur both prior and subsequent to the adoption hereof. Any amendment, alteration, or repeal of this ARTICLE VII that adversely affects any right of an indemnitee or its successors shall be prospective only and shall not limit, eliminate, or impair any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.
Section 6. Non-Exclusivity of Rights; Continuation of Rights of Indemnification. The rights to indemnification and to the advance of expenses conferred in this ARTICLE VII shall not be exclusive of any other right which any person may have or hereafter acquire under the Certificate of Incorporation or under any statute, bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. All rights to indemnification under this ARTICLE VII shall be deemed to be a contract between the Corporation and each director or officer of the Corporation who serves or served in such capacity at any time while this ARTICLE VII is in effect. Any repeal or modification of this ARTICLE VII or repeal or modification of relevant provisions of the DGCL or any other applicable laws shall not in any way diminish any rights to indemnification and advancement of expenses of such director or officer or the obligations of the Corporation arising hereunder with respect to any proceeding arising out of, or relating to, any actions, transactions, or facts occurring prior to the final adoption of such repeal or modification.
Section 7. Merger or Consolidation. For purposes of this ARTICLE VII, references to the “Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents, so that any person who is or was a director, officer, employee, or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, shall stand in the same position under this ARTICLE VII with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.
Section 8. Savings Clause. To the fullest extent permitted by law, if this ARTICLE VII or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify and advance expenses to each person entitled to indemnification under Section 1 of this ARTICLE VII as to all expense, liability, and loss (including attorneys’ fees and related disbursements, judgments, fines, ERISA excise taxes and penalties, and any other penalties and amounts paid or to be paid in settlement) actually and reasonably incurred or suffered by such person and for which indemnification and advancement of expenses is available to such person pursuant to this ARTICLE VII to the fullest extent permitted by any applicable portion of this ARTICLE VII that shall not have been invalidated.
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ARTICLE VIII
AMENDMENTS
These Bylaws may be amended, altered, changed, or repealed or new Bylaws adopted only in accordance with Section 1 of ARTICLE TEN of the Certificate of Incorporation.
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EX-4.1
EX-4.1
Filename: ck0002098430-ex4_1.htm · Sequence: 5
EX-4.1
Exhibit 4.1
MADISON AIR SOLUTIONS CORPORATION
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of April 15, 2026 among Madison Air Solutions Corporation, a Delaware corporation (the “Company”), Madison Industries Holdings LLC, a Delaware limited liability company (“Holdings”), certain entities managed or controlled by B-Flexion Fund Management (Jersey) Limited, a Jersey limited partnership (“Kedge” and together with such entities, the “Kedge Investors”), and each Person who executes a Joinder pursuant to the terms of this Agreement as an “Other Investor” (collectively, the “Other Investors”), a Holdings Member or a Distributed Holdings Investor. Except as otherwise specified herein, all capitalized terms used in this Agreement are defined in Exhibit A attached hereto.
In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:
Section 1 Demand Registrations.
(a) Requests for Registration. At any time and from time to time, (i) Holdings or (ii) the Kedge Investors may request registration under the Securities Act of all or any portion of their Registrable Securities on Form S-1 or any similar long-form registration statement (“Long-Form Registrations”) or on Form S-3 or any similar short-form registration statement (“Short-Form Registrations”), if available (any such requested registration, a “Demand Registration”). Holdings or the Kedge Investors may request that any Demand Registration be made pursuant to Rule 415 under the Securities Act (a “Shelf Registration”) and (if the Company is a WKSI at the time any such request is submitted to the Company or will become one by the time of the filing of such Shelf Registration) that such Shelf Registration be an automatic shelf registration statement (as defined in Rule 405 under the Securities Act) (an “Automatic Shelf Registration Statement”). Each request for a Demand Registration must specify the approximate number or dollar value of Registrable Securities requested to be registered by the requesting Holders and (if known) the intended method of distribution. Holdings will be entitled to request an unlimited number of Demand Registrations. The Kedge Investors will be entitled to request not more than two (2) Demand Registrations in any continuous twelve (12)-month period; provided, that a request for a Short-Form Registration or a Shelf Registration shall not be counted towards one of the foregoing two (2) Demand Registrations; provided, further, that the Kedge Investors shall not be entitled to request a Demand Registration that is a marketed underwritten offering unless the then-current market value of the Registrable Securities proposed to be registered is at least $50,000,000 (unless such Demand Registration is for all remaining Registrable Securities held by the Kedge Investors, in which case the Kedge Investors shall be entitled to make such Demand Registration even if the then-current market value of such Registrable Securities is below $50,000,000). The Company will pay all Expenses (as defined and described in Section 5), whether or not any such registration is consummated.
(b) Notice to Other Holders. Within four (4) Business Days after receipt of any such request, the Company will give written notice of the Demand Registration to all other Holders and, subject to the terms of Section 1(e), will include in such Demand Registration (and in all related registrations and qualifications under state blue sky laws and in any related underwriting) all Registrable Securities with respect to which the Company has received written requests for inclusion therein within ten (10) days after the receipt of the Company’s notice; provided, that, with the written consent of Holdings, the Company may, or at the written request of Holdings, the Company shall, instead provide notice of the Demand Registration to all other Holders within three (3) Business Days following the non-confidential filing of the registration statement with respect to the Demand Registration so long as such registration statement is not an Automatic Shelf Registration Statement.
(c) Form of Registrations. All Long‑Form Registrations will be underwritten registrations, unless otherwise approved by Holdings, or unless at the time of such Demand Registration the Company is not eligible to use Form S-3 or any similar short-form registration statement. Demand Registrations will be Short-Form Registrations whenever the Company is permitted to use any applicable short form unless otherwise requested by Holdings.
(d) Shelf Registrations.
(i) For so long as a registration statement for a Shelf Registration (a “Shelf Registration Statement”) is and remains effective, any Demand Investor will have the right at any time or from time to time to elect to sell pursuant to an offering (including an underwritten offering) Registrable Securities available for sale pursuant to such registration statement (“Shelf Registrable Securities”). If such Demand Investor desires to sell Registrable Securities pursuant to an underwritten offering, then such Demand Investor may deliver to the Company a written notice (a “Shelf Offering Notice”) specifying the number of Shelf Registrable Securities that such Demand Investor desires to sell pursuant to such underwritten offering (the “Shelf Offering”). As promptly as practicable, but in no event later than two (2) Business Days after receipt of a Shelf Offering Notice, the Company will give written notice of such Shelf Offering Notice to all other Holders of Shelf Registrable Securities that are otherwise permitted to sell in such Shelf Offering, and such notice shall request that each such Holder specify, within seven (7) days after such Holder’s receipt of such notice, the maximum number of Shelf Registrable Securities such Holder desires to be disposed of in such Shelf Offering. The Company, subject to Section 1(e) and Section 7, will include in such Shelf Offering all Shelf Registrable Securities with respect to which the Company has received timely written requests for inclusion. The Company will, as expeditiously as possible (and in any event within fourteen (14) days after the receipt of a Shelf Offering Notice), but subject to Section 1(e), use its best efforts to consummate such Shelf Offering.
(ii) If any Demand Investor desires to engage in an underwritten block trade or bought deal pursuant to a Shelf Registration Statement (either through filing an Automatic Shelf Registration Statement or through a take-down from an already existing Shelf Registration Statement) (each, an “Underwritten Block Trade”), then notwithstanding the time periods set forth in Section 1(d)(i), such Demand Investor must notify the Company of the Underwritten Block Trade not less than two (2) Business Days prior to the day such offering is first anticipated to commence. If requested by such Demand Investor, the Company will promptly notify other Holders of such Underwritten Block Trade and such notified Holders (each, a “Potential Participant”) may elect whether or not to participate no later than the next Business Day (i.e., one (1) Business Day prior to the day such offering is to commence) (unless a longer period is agreed to by the Demand Investors requesting such Demand Registration), and the Company will as expeditiously as possible use its best efforts to facilitate such Underwritten Block Trade (which may close as early as two (2) Business Days after the date it commences). Any Potential Participant’s request to participate in an Underwritten Block Trade shall be binding on the Potential Participant. For the avoidance of doubt, any Underwritten Block Trade shall not be deemed a marketed underwritten offering under Section 1(a).
(iii) All determinations as to whether to complete any Shelf Offering and as to the timing, manner, price and other terms of any Shelf Offering contemplated by this Section 1(d) shall be determined by the Demand Investors requesting such Shelf Offering, and the Company shall use its best efforts to cause any Shelf Offering to occur in accordance with such determinations as promptly as practicable.
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(iv) The Company will, at the request of any Demand Investor, file any prospectus supplement or any post-effective amendments and otherwise take any action necessary to include therein all disclosure and language deemed necessary or advisable by such Demand Investor to effect such Shelf Offering, subject to, in each case, the written consent of the Participating Demand Investors.
(e) Priority on Demand Registrations and Shelf Offerings. The Company will not include in any Demand Registration any securities that are not Registrable Securities without the prior written consent of the Participating Demand Investors. For the avoidance of doubt, the Company, Holdings, the Kedge Investors and Other Investors may participate in any Demand Registration initiated by Holdings or the Kedge Investors, subject to the Priority Rights set forth in this Section 1(e). If a Demand Registration or Piggyback Registration or a Shelf Offering is an underwritten offering and the managing underwriters advise the Company in writing that in their opinion the number of Registrable Securities and (if permitted hereunder) other securities requested to be included in such offering exceeds the number of Registrable Securities and other securities (if any), which can be sold therein without adversely affecting the marketability, proposed offering price, timing or method of distribution of the offering, then the Company will include in such offering the number of Registrable Securities and other securities that, in the opinion of such underwriters, can be sold without any such adverse effect in the following order of priority (the “Priority Rights”):
(i) first, 100% of any securities the Company proposes to sell;
(ii) second, 100% of the Kedge Registrable Securities proposed to be sold by the Kedge Investors, up to an aggregate number of shares of Common Equity equal to the Threshold minus all shares of Common Equity sold by the Kedge Investors prior to such offering, which amount shall not be less than zero (such net amount, the “Kedge Priority Allocation”);
(iii) third, any remaining capacity allocated between Holdings (and, if applicable, any Distributed Holdings Investor) and the Kedge Investors, pro rata among such Holders on the basis of the number of Registrable Securities owned by such Holder at such time (not including any Registrable Securities held by the Kedge Investors which have already been allocated to the Kedge Investors as part of the Kedge Priority Allocation in such Demand Registration or Piggyback Registration in Section 1(e)(ii)); and
(iv) fourth, if all Registrable Securities desired to be sold by each of the Company, Holdings (and, if applicable, any Distributed Holdings Investor) and the Kedge Investors are included in the offering, to any Other Investors or Persons not party to this Agreement.
(v) The Priority Rights shall be subject to the following additional provisions:
(A)
For the avoidance of doubt, the Kedge Priority Allocation shall be reduced (on a share for share basis) by the number of Registrable Securities which the Kedge Investors have previously sold through any method. Once the Kedge Investors have sold a total number of Registrable Securities equal to the Kedge Priority Allocation pursuant to clause (ii) of the Priority Rights, the Kedge Investors will no longer be entitled to any priority allocation under clause (ii).
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(B)
Holdings’ and the Kedge Investors’ pro rata holdings shall be calculated and fixed on the basis of the net number of Registrable Securities which are held (or deemed to be held), directly or indirectly, by Holdings (and/or any Distributed Holdings Investor) and the Kedge Investors, respectively, at the time that such Priority Rights are being applied.
(C)
If Holdings distributes Registrable Securities to its members (each such member, a “Holdings Member”), Holdings may assign its registration rights and Priority Rights to any Holdings Member (and any of such Holdings Member’s future affiliated transferees of such Registrable Securities) that, along with its Affiliates, holds a direct or indirect interest in a number of Registrable Securities which (at the time that such Priority Rights are being applied) are equal to or more than 3% of the total number of issued and outstanding shares of Common Equity as of the completion of the initial Public Offering (a “Distributed Holdings Investor”). The Priority Rights attributable to any Distributed Holdings Investor (together with its affiliated transferees) shall automatically terminate at such time as such Distributed Holdings Investor (together with any affiliated transferees of such Registrable Securities) ceases to hold a direct or indirect interest in a number of Registrable Securities which are equal to or more than 3% of the total number of issued and outstanding shares of Common Equity as at completion of the initial Public Offering.
(D)
The Priority Rights of the Kedge Investors shall automatically terminate at such time as the Kedge Investors no longer hold a direct or indirect interest in a number of Registrable Securities which are equal to or more than 3% of the total number of issued and outstanding shares of Common Equity as of the completion of the initial Public Offering.
(E)
Any shares of Common Equity which may be acquired or sold by Holdings, the Kedge Investors or any Holdings Member (including any Distributed Holdings Investor) following completion of the initial Public Offering shall not (x) represent Registrable Securities or (y) count for any purposes in applying the Priority Rights.
(F)
In the event that Priority Rights are required to be allocated, each of the Company, Holdings (and, if applicable, any Distributed Holdings Investor) and the Kedge Investors shall, within five (5) Business Days of receipt of the applicable demand or piggyback notice, deliver to the managing underwriter in writing its desired allocation. Following receipt of such notices, the parties shall request that the managing underwriter promptly provide its reasonable, good-faith opinion in writing as to the maximum offering size that can be achieved (subject to the above limitations) prior to determining the necessity of any Priority Rights.
(G)
See Exhibit B attached hereto for illustrative examples of how the Priority Rights shall be applied.
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(f) Restrictions on Demand Registration and Shelf Offerings.
(i) The Company may postpone, for up to 30 days from the date of the request (the “Suspension Period”), the filing or the effectiveness of a registration statement for a Demand Registration or suspend the use of a prospectus that is part of a Shelf Registration Statement (and therefore suspend sales of the Shelf Registrable Securities) by providing written notice to the Holders from the Company’s Chief Executive Officer stating that the Company’s Board of Directors has determined, in its reasonable, good-faith judgment, that the offer or sale of Registrable Securities would reasonably be expected to be materially detrimental to the Company and its stockholders because such action (A) would materially interfere with a material acquisition of assets or stock (other than in the ordinary course of business) or any material merger, consolidation, tender offer, recapitalization, reorganization, financing or other transaction involving the Company and (B) upon advice of counsel, the sale of Registrable Securities pursuant to the registration statement would require disclosure of material non-public information not otherwise required to be disclosed under applicable law, and either (x) the Company has a bona fide business purpose for preserving the confidentiality of such transaction or (y) such transaction renders the Company unable to comply with SEC requirements, in each case under circumstances that would make it impractical or inadvisable to cause the registration statement (or such filings) to become effective or to promptly amend or supplement the registration statement on a post effective basis, as applicable. The Company may delay or suspend the effectiveness of a Demand Registration or Shelf Registration Statement pursuant to this Section 1(f)(i) only twice in any continuous twelve (12)-month period and not for longer than 60 days in any single instance (for the avoidance of doubt, in addition to the Company’s rights and obligations under Section 4(a)(ii)).
(ii) In the case of an event that causes the Company to suspend the use of a Shelf Registration Statement as set forth in Section 1(f)(i) above or pursuant to Section 4(a)(ii) (a “Suspension Event”), the Company will give notice to the Holders whose Registrable Securities are registered pursuant to such Shelf Registration Statement (a “Suspension Notice”) to suspend sales of the Registrable Securities and such notice must state generally the basis for the notice and that such suspension will continue only for so long as the Suspension Event or its effect is continuing. Each Holder agrees not to effect any sales of its Registrable Securities pursuant to such Shelf Registration Statement (or such filings) at any time after it has received a Suspension Notice from the Company and prior to receipt of an End of Suspension Notice. A Holder may recommence effecting sales of the Registrable Securities pursuant to the Shelf Registration Statement (or such filings) following further written notice to such effect (an “End of Suspension Notice”) from the Company, which End of Suspension Notice will be given by the Company to the Holders promptly following the conclusion of any Suspension Event (and in any event during the permitted Suspension Period).
(iii) The Company shall not be obligated to effect any Demand Registration during the period beginning 30 days before the Company’s reasonable, good-faith estimate of the date of filing or pricing of a registration with respect to which Holders are or will be entitled to a Piggyback Registration pursuant to Section 2(a), and ending on the date that is 90 days after the effective date or pricing of such previous registration.
(g) Selection of Counsel and Underwriters. The Company shall select each of the legal counsel to the Company, the investment bank(s) and manager(s) to administer any underwritten offering in connection with any Demand Registration or Shelf Offering; provided, that the Demand Investor who initiates an Underwritten Block Trade shall select the investment bank(s) for any such Underwritten Block Trade.
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(h) Other Registration Rights. Except as provided in this Agreement, the Company will not grant to any Person(s) the right to request the Company or any Subsidiary to register any equity securities of the Company or any Subsidiary, or any securities convertible or exchangeable into or exercisable for such securities, without the prior written consent of Holdings, and any such right shall not be enforceable unless it expressly provides that any registration must be subject to the Priority Rights and does not permit any Person(s) to breach or otherwise deviate from the Priority Rights and terms of this Agreement. The Company represents and warrants to each Holder that, as of the date of this Agreement, the Company has not entered into or agreed to enter into or provide, and there are not outstanding, any registration rights agreements or similar agreements that grant any Person the right to require or participate in the registration of any equity securities of the Company.
(i) Revocation of Demand Notice or Shelf Offering Notice. At any time prior to the effective date of the registration statement relating to a Demand Registration or the “pricing” of any offering relating to a Shelf Offering Notice, the Demand Investor who initiated such Demand Registration or Shelf Offering may revoke or withdraw such notice of a Demand Registration or Shelf Offering Notice on behalf of all Holders participating in such Demand Registration or Shelf Offering without liability to such Holders (including, for the avoidance of doubt, the Participating Holdings Investors), in each case by providing written notice to the Company.
(j) Confidentiality. Each Holder agrees to treat as confidential the receipt of any notice hereunder (including notice of a Demand Registration, a Shelf Offering Notice and a Suspension Notice) and the information contained therein, and not to disclose or use the information contained in any such notice (or the existence thereof) without the prior written consent of the Company until such time as the information contained therein is or becomes available to the public generally (other than as a result of disclosure by such Holder in breach of the terms of this Agreement).
(k) Fulfillment of Kedge Registration Obligations. Notwithstanding any other provision of this Agreement, a Demand Registration requested by the Kedge Investors shall not be deemed to have been effected, and shall not count toward the two (2) Demand Registrations in any continuous twelve (12)-month period to which the Kedge Investors are entitled under Section 1(a) if:
(i) the registration statement or offering does not reach pricing for any reason, including situations in which the Kedge Investors withdraw such Demand Registration prior to pricing, except if the offering does not reach pricing exclusively due to the Kedge Investors’ bad faith;
(ii) the number of Registrable Securities requested to be included in such Demand Registration by the Kedge Investors is reduced by the managing underwriters pursuant to the Priority Rights described in Section 1(e) by more than 20% of the number of Registrable Securities the Kedge Investors reasonably requested to include in such Demand Registration;
(iii) if, as of the date of such withdrawal, the per share stock price of the Company’s Class A common stock has declined by fifteen percent (15)% or more as compared to the closing per share stock price of the Class A common stock on the date of the delivery of the Demand Notice with respect to such Demand Registration;
(iv) after it has become effective, such registration ceases to be effective or is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental authority for any reason, other than exclusively due to an untrue statement of a material fact or omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, in any information
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expressly furnished to the Company by the Kedge Investors for inclusion in any such registration, and, as a result thereof, the Registrable Securities requested to be registered cannot be completely distributed in accordance with the plan of distribution set forth in the related registration statement; or
(v) in the case of an underwritten offering, the conditions to closing specified in the underwriting agreement entered into in connection with such Demand Registration are not satisfied or waived other than solely by reason of the bad faith of the Kedge Investors.
Section 2 Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to register any of its equity securities under the Securities Act (including primary and secondary registrations, and other than pursuant to an Excluded Registration) (a “Piggyback Registration”), the Company will give prompt written notice (and in any event within three (3) Business Days before the public filing of the registration statement relating to the Piggyback Registration) to all Holders of its intention to effect such Piggyback Registration and, subject to the terms of Section 2(b) and Section 2(c), will include in such Piggyback Registration (and in all related registrations or qualifications under blue sky laws and in any related underwriting) all Registrable Securities with respect to which the Company has received written requests for inclusion therein within ten (10) days after delivery of the Company’s notice to the Holders. Any Participating Demand Investor may withdraw its request for inclusion from any Piggyback Registration (or, for the avoidance of doubt, from any Demand Registration) at any time prior to executing the underwriting agreement, or if none, prior to the applicable registration statement becoming effective, without liability to any Holders (including, for the avoidance of doubt, the Participating Holdings Investors), in each case by providing written notice to the Company.
(b) Priority on Primary Registrations. Other than the securities the Company proposes to register on its own behalf, the Company will not include in any Piggyback Registration any securities that are not Registrable Securities without the prior written consent of Holdings. If a Piggyback Registration is an underwritten primary registration on behalf of the Company, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability, proposed offering price, timing or method of distribution of the offering, the Company will include in such registration the number of Registrable Securities and other securities that, in the opinion of the underwriters, can be sold without any such adverse effect in accordance with the Priority Rights set forth in Section 1(e).
(c) Priority on Secondary Registrations. If a Piggyback Registration is an underwritten secondary registration on behalf of holders of the Company’s equity securities (other than pursuant to Section 1), and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability, proposed offering price, timing or method of distribution of the offering, the Company will include in such registration the number of Registrable Securities and other securities that, in the opinion of the underwriters, can be sold without any such adverse effect in accordance with the Priority Rights set forth in Section 1(e).
(d) Right to Terminate Registration. The Company will have the right to terminate or withdraw any registration initiated by it under this Section 2, whether or not any holder of Registrable Securities has elected to include securities in such registration.
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(e) Selection of Counsel and Underwriters. If any Piggyback Registration is an underwritten offering, the Company shall select each of the legal counsel for the Company, the investment bank(s) and manager(s) for the offering.
Section 3 Stockholder Lock-Up Agreements and Company Holdback Agreement.
(a) Stockholder Lock-up Agreements. In connection with any underwritten Public Offering, each Holder will enter into any lock-up, holdback or similar agreements in the form negotiated between Holdings and the underwriter(s) managing such offering, in each case with such modifications and exceptions as may be approved by Holdings. The Company may impose stop-transfer instructions with respect to any shares of Common Equity or any other equity securities of the Company, or any securities convertible or exchangeable into or exercisable for such securities, that are subject to the lock-up, holdback or similar agreements contemplated by this Section 3(a), and such stop-transfer instructions shall be effective to enforce the terms of such lock-up, holdback or similar agreements regardless of whether the applicable Holder has executed such agreement.
(b) Company Holdback Agreement. In connection with any underwritten Public Offering, the Company will, and will cause each of its directors and executive officers to, enter into any customary lock-up, holdback or similar agreements reasonably requested by the underwriter(s) managing such offering, unless approved in writing by Holdings and the underwriters managing the Public Offering and with such modifications and exceptions as may be approved by Holdings.
Section 4 Registration Procedures.
(a) Company Obligations. Whenever the Holders have requested that any Registrable Securities be registered pursuant to this Agreement or have initiated a Shelf Offering, the Company will use its best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof, and pursuant thereto the Company will as expeditiously as possible:
(i) prepare and file with (or submit confidentially to) the SEC a registration statement, and all amendments and supplements thereto and related prospectuses, with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, all in accordance with the Securities Act and all applicable rules and regulations promulgated thereunder; provided, that before filing or confidentially submitting a registration statement or prospectus or any amendments or supplements thereto, the Company will furnish to the counsel selected by each Holder covered by such registration statement copies of all such documents proposed to be filed or submitted, which documents will be subject to the review and comment of such counsel;
(ii) notify each Holder of (A) the issuance by the SEC of any stop order suspending the effectiveness of any registration statement or the initiation of any proceedings for that purpose, (B) the receipt by the Company or its counsel of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, and (C) the effectiveness of each registration statement filed hereunder;
(iii) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period ending when all of the securities covered by such registration statement have been disposed of in accordance with the intended methods of
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distribution by the sellers thereof set forth in such registration statement (but not in any event before the expiration of any longer period required under the Securities Act or, if such registration statement relates to an underwritten Public Offering, such longer period as in the opinion of counsel for the underwriters a prospectus is required by law to be delivered in connection with sale of Registrable Securities by an underwriter or dealer) and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement;
(iv) furnish, without charge, to each seller of Registrable Securities thereunder and each underwriter, if any, such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) (in each case including all exhibits and documents incorporated by reference therein), each amendment and supplement thereto, each Free Writing Prospectus and such other documents as such seller or underwriter, if any, may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller (the Company hereby consenting to the use in accordance with all applicable laws of each such registration statement, each such amendment and supplement thereto, and each such prospectus (or preliminary prospectus or supplement thereto) or Free Writing Prospectus by each such seller of Registrable Securities and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such registration statement or prospectus);
(v) use its best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller; provided, that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph, (B) consent to general service of process in any such jurisdiction or (C) subject itself to taxation in any such jurisdiction;
(vi) notify in writing each seller of such Registrable Securities (A) promptly after it receives notice thereof, of the date and time when such registration statement and each post-effective amendment thereto has become effective or a prospectus or supplement to any prospectus relating to a registration statement has been filed and when any registration or qualification has become effective under a state securities or blue sky law or any exemption thereunder has been obtained, (B) promptly after receipt thereof, of any request by the SEC for the amendment or supplementing of such registration statement or prospectus or for additional information, (C) at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event or of any information or circumstances as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and, subject to Section 1(f), if required by applicable law or to the extent requested by the Participating Demand Investors, the Company will use its best efforts to promptly prepare and file a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading and (D) if at any time the representations and warranties of the Company in any underwriting agreement, securities sale agreement, or other similar agreement, relating to the offering shall cease to be true and correct;
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(vii) (A) use best efforts to cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed and, if not so listed, to be listed on and the Nasdaq Stock Market or the New York Stock Exchange, without limiting the generality of the foregoing, to arrange for at least two market makers to register as such with respect to such Registrable Securities with FINRA, and (B) comply (and continue to comply) with the requirements of any self-regulatory organization applicable to the Company, including without limitation all corporate governance requirements;
(viii) use best efforts to provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement and, in connection with any proposed sale of Registrable Securities pursuant to a registration statement, provide the transfer agent upon its request, an opinion of counsel as to the effectiveness of the registration statement, together with any other authorizations, certificates and directions required by the transfer agent which authorize and direct the transfer agent to issue such Registrable Securities without legend upon sale by the Holder of such Registrable Securities under the registration statement; provided, that such Holder shall deliver such certificates as may be reasonably requested by counsel to the Company in order to effectuate such transfers;
(ix) enter into and perform such customary agreements (including, as applicable, underwriting agreements in customary form) and take all such other actions as the Participating Demand Investors or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (including, without limitation, making available the executive officers of the Company and participating in “road shows,” investor presentations, marketing events and other selling efforts and effecting a stock or unit split or combination, recapitalization or reorganization);
(x) make available for inspection by any seller of Registrable Securities, any underwriter participating in any disposition or sale pursuant to such registration statement and any attorney, accountant or other agent retained by any such seller or underwriter, all financial and other records, pertinent corporate and business documents and properties of the Company as will be necessary to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors, employees, agents, representatives and independent accountants to be available for due diligence discussions and supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement and the disposition of such Registrable Securities pursuant thereto;
(xi) take all actions to ensure that any Free-Writing Prospectus utilized in connection with any Demand Registration or Piggyback Registration or Shelf Offering hereunder complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related prospectus, prospectus supplement and related documents, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(xii) otherwise use its best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the registration statement, which earnings statement will satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
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(xiii) permit any Holder which, in its sole and exclusive judgment, might be deemed to be an underwriter or a controlling person of the Company, to participate in the preparation of such registration or comparable statement and to allow such Holder to provide language for insertion therein, in form and substance satisfactory to the Company, which in the reasonable judgment of such Holder and its counsel should be included;
(xiv) use best efforts to (A) make Short-Form Registrations available for the sale of Registrable Securities and (B) prevent the issuance of any stop order suspending the effectiveness of a registration statement, or the issuance of any order suspending or preventing the use of any related prospectus or suspending the qualification of any Common Equity included in such registration statement for sale in any jurisdiction, and in the event any such order is issued, use best efforts to obtain promptly the withdrawal of such order;
(xv) use its reasonable best efforts to cause such Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the sellers thereof to consummate the disposition of such Registrable Securities;
(xvi) cooperate with the Holders covered by the registration statement and the managing underwriter or agent, if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing securities to be sold under the registration statement, or the removal of any restrictive legends associated with any account at which such securities are held, and enable such securities to be in such denominations and registered in such names as the managing underwriter, or agent, if any, or such Holders may request;
(xvii) if requested by any managing underwriter, include in any prospectus or prospectus supplement updated financial or business information for the Company’s most recent period or current quarterly period (including estimated results or ranges of results) if required for purposes of marketing the offering in the view of the managing underwriter;
(xviii) take no direct or indirect action prohibited by Regulation M under the Exchange Act; provided, however, that to the extent that any prohibition is applicable to the Company, the Company will take such action as is necessary to make any such prohibition inapplicable;
(xix) (A) cooperate with each Holder covered by the registration statement and each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with the preparation and filing of applications, notices, registrations and responses to requests for additional information with FINRA, the New York Stock Exchange, Nasdaq or any other national securities exchange on which the shares of Common Equity are or are to be listed, and (B) to the extent required by the rules and regulations of FINRA, retain a Qualified Independent Underwriter acceptable to the managing underwriter;
(xx) in the case of any underwritten offering, use its best efforts to obtain, and deliver to the underwriter(s), in the manner and to the extent provided for in the applicable underwriting agreement, one or more cold comfort letters from the Company’s independent public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters;
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(xxi) use its best efforts to provide (A) a legal opinion of the Company’s outside counsel, dated the effective date of such registration statement addressed to the Company, (B) on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a Demand Registration or Shelf Offering, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the closing date of the applicable sale, (1) one or more legal opinions of the Company’s outside counsel, dated such date, in form and substance as customarily given to underwriters in an underwritten public offering or, in the case of a non-underwritten offering, to the broker, placement agent or other agent of the Holders assisting in the sale of the Registrable Securities, (2) one or more “negative assurances letters” of the Company’s outside counsel, dated such date, in form and substance as is customarily given to underwriters in an underwritten public offering or, in the case of a non-underwritten offering, to the broker, placement agent or other agent of the Holders assisting in the sale of the Registrable Securities, in each case, addressed to the underwriters, if any, or, if requested, in the case of a non-underwritten offering, to the broker, placement agent or other agent of the Holders assisting in the sale of the Registrable Securities and (3) customary certificates executed by authorized officers of the Company as may be requested by any Holder or any underwriter of such Registrable Securities;
(xxii) if the Company files an Automatic Shelf Registration Statement covering any Registrable Securities, use its best efforts to remain a WKSI (and not become an ineligible issuer (as defined in Rule 405 under the Securities Act)) during the period during which such Automatic Shelf Registration Statement is required to remain effective;
(xxiii) if the Company does not pay the filing fee covering the Registrable Securities at the time an Automatic Shelf Registration Statement is filed, pay such fee at such time or times as the Registrable Securities are to be sold;
(xxiv) if the Automatic Shelf Registration Statement has been outstanding for at least three (3) years, at the end of the third year, refile a new Automatic Shelf Registration Statement covering the Registrable Securities, and, if at any time when the Company is required to re-evaluate its WKSI status the Company determines that it is not a WKSI, use its best efforts to refile the Shelf Registration Statement on Form S-3 and, if such form is not available, Form S-1 and keep such registration statement effective during the period during which such registration statement is required to be kept effective pursuant to this Agreement; and
(xxv) if requested by any Participating Demand Investor, cooperate with such Participating Demand Investor and with the managing underwriter or agent, if any, on reasonable notice to facilitate any Charitable Gifting Event and to prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to permit any such recipient Charitable Organization to sell in the underwritten offering if it so elects.
(b) Officer Obligations. Each Holder that is an officer of the Company agrees that if and for so long as he or she is employed by the Company or any Subsidiary thereof, he or she will participate fully in the sale process in a manner customary for persons in like positions and consistent with his or her other duties with the Company, including the preparation of the registration statement and the preparation and presentation of any road shows.
(c) Automatic Shelf Registration Statements. If the Company files any Automatic Shelf Registration Statement for the benefit of the holders of any of its securities other than the Holders, and a Demand Investor does not request that their Registrable Securities be included in such Shelf Registration
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Statement, the Company agrees that, at the request of a Demand Investor, it will include in such Automatic Shelf Registration Statement such disclosures as may be required by Rule 430B in order to ensure that the Demand Investor may be added to such Shelf Registration Statement at a later time through the filing of a prospectus supplement rather than a post-effective amendment, and will file any post-effective amendments necessary to include therein all disclosure and language necessary to ensure that the holders of Registrable Securities may be added to such Shelf Registration Statement.
(d) Additional Information. The Company may require each seller of Registrable Securities as to which any registration is being effected to furnish the Company such customary information regarding such seller and the distribution of such securities as the Company may from time to time reasonably request in writing, as a condition to such seller’s participation in such registration.
(e) In-Kind Distributions. If any Demand Investor (and/or any of its Affiliates) seeks to effectuate an in-kind distribution of all or part of its Registrable Securities to its direct or indirect equityholders, the Company will, subject to any applicable lock-ups, reasonably cooperate with and assist such stockholder, such equityholders and the Company’s transfer agent to facilitate such in-kind distribution in the matter reasonably requested by such stockholder (including the delivery of instruction letters by the Company or its counsel to the Company’s transfer agent, the delivery of customary legal opinions by counsel to the Company and the delivery of Company Equity without restrictive legends, to the extent no longer applicable).
(f) Suspended Distributions. Each Person participating in a registration hereunder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 4(a)(ii), such Person will immediately discontinue the disposition of its Registrable Securities pursuant to the registration statement until such Person’s receipt of the copies of a supplemented or amended prospectus as contemplated by Section 4(a)(ii), subject to the Company’s compliance with its obligations under Section 4(a)(ii).
(g) Registerable Securities Transactions. If requested by any Holder in connection with any transaction involving any Registrable Securities (including any sale or other transfer of such securities without registration under the Securities Act, any margin loan with respect to such securities and any pledge of such securities), the Company agrees to provide such Holder with customary and reasonable assistance to facilitate such transaction, including, without limitation, (i) such action as such Holder may reasonably request from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act and (ii) entering into an “issuer’s agreement” in connection with any margin loan with respect to such securities in customary form.
(h) Other. To the extent that any of the Participating Demand Investors is or may be deemed to be an “underwriter” of Registrable Securities pursuant to any SEC comments or policies, the Company agrees that (i) the indemnification and contribution provisions contained in Section 6 shall be applicable to the benefit of such Participating Demand Investor in their role as an underwriter or deemed underwriter in addition to their capacity as a Holder and (ii) such Participating Demand Investor shall be entitled to conduct the due diligence which they would normally conduct in connection with an offering of securities registered under the Securities Act, including without limitation receipt of customary opinions and comfort letters addressed to such Participating Demand Investor.
Section 5 Expenses.
Except as expressly provided herein, all out-of-pocket expenses incurred by the Company in connection with the performance of or compliance with this Agreement and/or in connection with any sale, transfers, distributions or other disposition of Registrable Securities, including pursuant to a Demand
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Registration, Piggyback Registration or Shelf Offering, whether or not the same shall become effective, shall be paid by the Company, including, without limitation: (i) all registration and filing fees, and any other fees and expenses associated with filings required to be made with the SEC or FINRA, (ii) all fees and expenses in connection with compliance with any securities or “blue sky” laws, (iii) all printing, duplicating, word processing, messenger, telephone, facsimile and delivery expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company or other depositary and of printing prospectuses and Company Free Writing Prospectuses), (iv) all fees and disbursements of counsel for the Company and of all independent certified public accountants of the Company (including the expenses of any special audit and cold comfort letters required by or incidental to such performance), (v) Securities Act liability insurance or similar insurance if the Company so desires or the underwriters so require in accordance with then-customary underwriting practice, (vi) all fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange on which similar securities of the Company are then listed (or on which exchange the Registrable Securities are proposed to be listed in the case of the initial Public Offering), (vii) all applicable rating agency fees with respect to the Registrable Securities, (viii) all fees and disbursements of legal counsel for the Company, (ix) any fees and disbursements of underwriters customarily paid by issuers or sellers of securities, (x) all fees and expenses of any special experts or other Persons retained by the Company in connection with any Registration, (xi) all of the Company’s internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties) and (xii) all expenses related to the “roadshow” for any underwritten offering, including all travel, meals and lodging. All such expenses are referred to herein as “Expenses.” The Company shall not be required to pay, and each Person that sells securities pursuant to a Demand Registration, Shelf Offering or Piggyback Registration hereunder will bear and pay (i) all underwriting discounts and commissions applicable to the Registrable Securities sold for such Person’s account and all transfer taxes (if any) attributable to the sale of Registrable Securities, (ii) all fees and disbursements of legal counsel for such Person participating in such registration (or, in the case of a Shelf Registration, each Person selling Registrable Securities under the Shelf Registration Statement); and (iii) all expenses associated with filings required to be made with the SEC by any Person or its Affiliates reporting a change in beneficial ownership.
Section 6 Indemnification and Contribution.
(a) By the Company. The Company will indemnify and hold harmless, to the fullest extent permitted by law and without limitation as to time, each Holder, such Holder’s officers, directors, employees, agents, fiduciaries, stockholders, managers, partners, members, Affiliates, direct and indirect equityholders, consultants and representatives, and any successors and assigns thereof, and each Person who controls such Holder (within the meaning of the Securities Act) (the “Indemnified Parties”) against all losses, claims, actions, damages, liabilities and expenses (including with respect to actions or proceedings, whether commenced or threatened, and including reasonable attorney fees and expenses) (collectively, “Losses”) caused by, resulting from, arising out of, based upon or related to any of the following (each, a “Violation”) by the Company: (i) any untrue or alleged untrue statement of material fact contained in (A) any registration statement, prospectus, preliminary prospectus or Free‑Writing Prospectus, or any amendment thereof or supplement thereto or (B) any application or other document or communication (in this Section 6, collectively called an “application”) executed by or on behalf of the Company or based upon written information furnished by or on behalf of the Company filed in any jurisdiction in order to qualify any securities covered by such registration under the “blue sky” or securities laws thereof, (ii) any omission or alleged omission of a material fact required to be stated in any of the foregoing or necessary to make the statements contained in any of the foregoing, in light of the circumstances under which they were made, not misleading or (iii) any Violation or alleged Violation by the Company of the Securities Act or any other similar federal or state securities laws or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance. In addition, the Company will reimburse such Indemnified Party
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for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such Losses. Notwithstanding the foregoing, the Company will not be liable in any such case to the extent that any such Losses result from, arise out of, are based upon, or relate to an untrue statement of a material fact or omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, made in such registration statement, any such prospectus, preliminary prospectus or Free‑Writing Prospectus or any amendment or supplement thereto, or in any application, in reliance upon, and in conformity with, written information prepared and furnished in writing to the Company by such Indemnified Party expressly for use therein. In connection with an underwritten offering, the Company will indemnify such underwriters, their officers and directors, and each Person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the Indemnified Parties or as otherwise agreed to in the underwriting agreement executed in connection with such underwritten offering. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of such securities by such seller.
(b) By Holders. In connection with any registration statement in which a Holder is participating, each such Holder will furnish to the Company in writing such customary information as the Company reasonably requests for use in connection with any such registration statement or prospectus and, to the extent permitted by law, will indemnify, on a several and not joint basis, the Company, its officers, directors, employees, agents and representatives, and each Person who controls the Company (within the meaning of the Securities Act) against any Losses resulting from (as determined by a final and appealable judgment, order or decree of a court of competent jurisdiction) any untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, but only to the extent that such untrue statement or omission is contained in any information so furnished in writing by such Holder expressly for use therein; provided, that the obligation to indemnify will be individual, not joint and several, for each Holder and will be limited to the net amount of proceeds received by such Holder from the sale of Registrable Securities pursuant to such registration statement giving rise to such indemnification obligation.
(c) Claim Procedure. Any Person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification; provided, that the failure to give prompt notice will impair any Person’s right to indemnification hereunder only to the extent such failure has prejudiced the indemnifying party, and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party will not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld, conditioned or delayed). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. In such instance, the conflicted indemnified parties will have a right to retain one separate counsel, chosen by the majority of the conflicted indemnified parties involved in the indemnification and approved by the Company, at the expense of the indemnifying party.
(d) Contribution. If the indemnification provided for in this Section 6 is held by a court of competent jurisdiction to be unavailable to, or is insufficient to hold harmless, an indemnified party or
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is otherwise unenforceable with respect to any Losses referred to herein, then such indemnifying party will contribute to the amounts paid or payable by such indemnified party as a result of such Losses, (i) in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other hand in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations or (ii) if the allocation provided by clause (i) of this Section 6(d) is not permitted by applicable law, then in such proportion as is appropriate to reflect not only such relative fault but also the relative benefit of the Company on the one hand and of the sellers of Registrable Securities and any other sellers participating in the registration statement on the other in connection with the statement or omissions which resulted in such Losses, as well as any other relevant equitable considerations; provided, that the maximum amount of liability in respect of such contribution will be limited, in the case of each seller of Registrable Securities, to an amount equal to the net proceeds actually received by such seller from the sale of Registrable Securities effected pursuant to such registration. The relative fault of the indemnifying party and of the indemnified party will be determined by reference to, among other things, whether the untrue (or, as applicable alleged) untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just or equitable if the contribution pursuant to this Section 6(d) were to be determined by pro rata allocation or by any other method of allocation that does not take into account such equitable considerations. The amount paid or payable by an indemnified party as a result of the Losses referred to herein will be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending against any action or claim which is the subject hereof. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who is not guilty of such fraudulent misrepresentation.
(e) Release. No indemnifying party will, except with the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
(f) Non-exclusive Remedy; Survival. The indemnification and contribution provided for under this Agreement will be in addition to any other rights to indemnification or contribution that any indemnified party may have pursuant to law or contract (and the Company and its Subsidiaries shall be considered the indemnitors of first resort in all such circumstances to which this Section 6 applies) and will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and will survive the transfer of Registrable Securities and the termination or expiration of this Agreement.
Section 7 Cooperation with Underwritten Offerings. No Person may participate in any underwritten registration hereunder unless such Person (i) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements and on the terms and conditions no less favorable than the terms and conditions applicable to the Company and/or the other holders of securities of the Company included in such underwritten registration (including, without limitation, pursuant to the terms of any over-allotment or “green shoe” option requested by the underwriters; provided, that no Holder will be required to sell more than the number of Registrable Securities such Holder has requested to include in such registration) and (ii) completes, executes and delivers all questionnaires, powers of attorney, stock powers, custody agreements, indemnities, underwriting agreements and other documents and agreements required under the terms of such underwriting arrangements or as may be reasonably requested by the Company and the lead managing underwriter(s). To the extent that any such agreement is entered into pursuant to, and consistent with, Section 3, Section 4 and/or this Section 7, the respective rights and obligations created under such
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agreement will supersede the respective rights and obligations of the Holders, the Company and the underwriters created thereby with respect to such registration.
Section 8 Subsidiary Public Offering. If, after an initial Public Offering of the common equity securities of one of its Subsidiaries, the Company distributes securities of such Subsidiary to its equityholders, then the rights and obligations of the Company pursuant to this Agreement will apply, mutatis mutandis, to such Subsidiary, and the Company will cause such Subsidiary to comply with such Subsidiary’s obligations under this Agreement as if it were the Company hereunder.
Section 9 Joinder; Additional Parties; Transfer of Registrable Securities.
(a) Joinder. Except with respect to the transfer of Holdings Registrable Securities by Holdings or its Affiliate transferees (in which case no consent or permission from the Company or Holdings is required), the Company may from time to time (only with the prior written consent of Holdings and subject to the qualification of this Section 9) permit any Person who acquires Common Equity (or rights to acquire Common Equity) to become a party to this Agreement and to be entitled to and be bound by all of the rights and obligations as a Holder by obtaining an executed joinder to this Agreement from such Person in the form of Exhibit C attached hereto (a “Joinder”). Upon the execution and delivery of a Joinder by such Person, the Common Equity held by such Person shall become the category of Registrable Securities (i.e., Holdings Registrable Securities, Kedge Registrable Securities or Other Investor Registrable Securities), and such Person shall be deemed the category of Holder (i.e., Kedge Investor or Other Investor), in each case as set forth on the signature page to such Joinder (only with the prior written consent of Holdings); provided, however, that the prior written consent of the Kedge Investors shall be required for any Joinder pursuant to which (i) such Person would be entitled to Priority Rights at or above the Kedge Priority Allocation set forth in Section 1(e)(ii), or (ii) such Person would be entitled to participate in the Priority Rights set forth in Section 1(e)(iii) (except that the foregoing (ii) shall not apply to any Person who is issued Common Equity by the Company in circumstances whereby the Company in good faith deems such issuance to be in the reasonable best interest of the Company and its shareholders, including in connection with any acquisition by the Company of another company or assets); provided, further, that in a transfer of Holdings Registrable Securities by Holdings or its Affiliate transferees, Holdings shall have the right to designate the category of Registrable Securities to be received by such transferee and such Person shall be deemed the category of Holder as designated by Holdings (except that any such Affiliate transferee shall not be designated a Kedge Investor, and their Registrable Securities shall not be deemed Kedge Registrable Securities, without the prior written consent of the Kedge Investors, and any such Affiliate transferee shall not be designated a Distributed Holdings Investor unless such Affiliates holds a direct or indirect interest in a number of Registrable Securities equal to or more than 3% of the total number of issued and outstanding shares of Common Equity as of the completion of the initial Public Offering pursuant to Section 1(e)).
(b) Restrictions on Transfers. Prior to transferring any Registrable Securities to any Person (including, without limitation, by operation of law), the transferring Holder must cause the prospective transferee to execute and deliver to the Company a Joinder (which shall be subject to the prior written consent of Holdings, except in the case of any Affiliate transfers pursuant to Section 11(e)); provided, however, that the prior written consent of the Kedge Investors shall be required for any such Joinder pursuant to which such prospective transferee would be entitled to Priority Rights at or above the Kedge Priority Allocation set forth in Section 1(e)(ii); provided, further, that such Joinder shall not be required in the case of (i) a transfer to the Company, (ii) a Public Offering, (iii) a sale pursuant to Rule 144 after the completion of the initial Public Offering and/or (iv) a transfer in connection with a Sale of the Company. Any transfer or attempted transfer of Registrable Securities in violation of any provision of this Agreement will be void, and the Company will not record such transfer on its books or treat any purported
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transferee of such Registrable Securities as the owner thereof for any purpose (but the Company will be entitled to enforce against such Person the obligations hereunder).
(c) Legend. Each certificate (if any) or book entry form evidencing any Registrable Securities and each certificate issued in exchange for or upon the transfer of any Registrable Securities (unless such Registrable Securities would no longer be Registrable Securities after such transfer) will be stamped or otherwise imprinted with a legend in substantially the following form:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS SET FORTH IN A REGISTRATION RIGHTS AGREEMENT DATED AS OF APRIL 15, 2026 AMONG THE ISSUER OF SUCH SECURITIES (THE “COMPANY”) AND CERTAIN OF THE COMPANY’S EQUITYHOLDERS, AS AMENDED AND/OR RESTATED. A COPY OF SUCH AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”
The Company will imprint such legend on certificates evidencing Registrable Securities outstanding prior to the date hereof. The legend set forth above will be removed from the certificates evidencing any securities that have ceased to be Registrable Securities.
Section 10 Effectiveness. Notwithstanding anything to the contrary set forth in his Agreement, no Holder shall have any rights hereunder with respect to the registration or sale of any Registrable Securities or any other securities at any time prior to the date that is two years and one day after the issuance of Common Equity upon consummation of the closing of the Company’s initial Public Offering.
Section 11 General Provisions.
(a) Amendments and Waivers. Except as otherwise provided herein, the provisions of this Agreement may be amended, modified or waived only with the prior written consent of the Company and Holdings; provided, that no such amendment, modification or waiver that would treat a specific Holder or group of Holders of Registrable Securities (i.e., Holdings, the Kedge Investors or Other Investors) materially adversely will be effective against such Holder or group of Holders without the consent of each Holder that is materially adversely affected thereby (except that for the purposes of this Section 11, the Kedge Investors shall be deemed a single Holder). The failure or delay of any Person to enforce any of the provisions of this Agreement will in no way be construed as a waiver of such provisions and will not affect the right of such Person thereafter to enforce each and every provision of this Agreement in accordance with its terms. A waiver or consent to or of any breach or default by any Person in the performance by that Person of his, her or its obligations under this Agreement will not be deemed to be a consent or waiver to or of any other breach or default in the performance by that Person of the same or any other obligations of that Person under this Agreement.
(b) Remedies. The parties to this Agreement will be entitled to enforce their rights under this Agreement specifically (without posting a bond or other security), to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their favor. The parties hereto agree and acknowledge that a breach of this Agreement would cause irreparable harm and money damages would not be an adequate remedy for any such breach and that, in addition to any other rights and remedies existing hereunder, any party will be entitled to specific performance and/or other
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injunctive relief from any court of law or equity of competent jurisdiction (without posting any bond or other security) in order to enforce or prevent violation of the provisions of this Agreement.
(c) 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, invalid, illegal or unenforceable in any respect under any applicable law or regulation in any jurisdiction, such prohibition, invalidity, illegality or unenforceability will not affect the validity, legality or enforceability of any other provision of this Agreement in such jurisdiction or in any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such prohibited, invalid, illegal or unenforceable provision had never been contained herein.
(d) Entire Agreement. Except as otherwise provided herein, this Agreement contains the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties hereto, written or oral, which may have related to the subject matter hereof in any way.
(e) Successors and Assigns. Except as otherwise provided herein, this Agreement will bind and inure to the benefit and be enforceable by the Company and its successors and permitted assigns. Holdings and the Kedge Investors may assign their respective rights hereunder to their respective Affiliates; provided, that such purchaser or transferee shall, as a condition to the effectiveness of such assignment, be required to cause such prospective transferee to execute and deliver to the Company a Joinder. Except as otherwise provided herein, the rights under this Agreement are personal to the Holders and are not assignable without the prior written consent of each of the Company, Holdings and Kedge.
(f) Notices. Any notice, demand or other communication to be given under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given (i) when delivered personally to the recipient, (ii) when sent by confirmed electronic mail if sent during normal business hours of the recipient; but if not, then on the next Business Day, (iii) one Business Day after it is sent to the recipient by reputable overnight courier service (charges prepaid) or (iv) three (3) Business Days after it is mailed to the recipient by first class mail, return receipt requested. Such notices, demands and other communications will be sent to the Company at the address specified on the signature page hereto or any Joinder and to any holder, or at such address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party. Any party may change such party’s address for receipt of notice by giving prior written notice of the change to the sending party as provided herein. The Company’s address is:
If to the Company:
Madison Air Solutions Corporation
444 West Lake Street, Suite 4460
Chicago, IL 60606
Attention: John Lavorato, General Counsel
Email: [****]
With a copy to (which shall not constitute notice):
Kirkland & Ellis LLP
333 West Wolf Point Plaza
Chicago, IL 60654
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Attention: Robert M. Hayward, P.C., Robert E. Goedert, P.C., A.J. Million
Email: [****], [****], [****]
If to Holdings:
Madison Industries Holdings LLC
444 West Lake Street, Suite 4400
Chicago, IL 60606
Attention: Larry W. Gies
Email: [****]
With a copy to (which shall not constitute notice):
Paul Hastings LLP
71 S. Wacker Drive, 45th Floor
Chicago, IL 60606
Attention: Brian Richards
Email: [****]
If to Kedge:
Kedge Investors
Ensign House, 29 Seaton Place
St Helier, Jersey JE1 1ZZ
Attention: Remi Beard, Alex Papadimitriou, Kedge Capital PE Team
Email: [****], [****], [****]
With a copy to (which shall not constitute notice):
Skadden, Arps, Slate, Meagher & Flom (UK) LLP
22 Bishopsgate
London, UK EC2N 4BQ
Attention: Lorenzo Corte, Greg Norman
Email: [****], [****]
or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.
(g) Business Days. If any time period for giving notice or taking action hereunder expires on a day that is not a Business Day, the time period will automatically be extended to the Business Day immediately following such Saturday, Sunday or legal holiday.
(h) Governing Law. All issues and questions concerning the construction, validity, interpretation and enforcement of this Agreement and the exhibits and schedules hereto will be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
(i) MUTUAL WAIVER OF JURY TRIAL. AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH PARTY HERETO
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EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.
(j) CONSENT TO JURISDICTION AND SERVICE OF PROCESS. EACH OF THE PARTIES IRREVOCABLY SUBMITS TO THE NON‑EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES HERETO FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO SUCH PARTY’S RESPECTIVE ADDRESS SET FORTH ABOVE WILL BE EFFECTIVE SERVICE OF PROCESS FOR ANY ACTION, SUIT OR PROCEEDING WITH RESPECT TO ANY MATTERS TO WHICH IT HAS SUBMITTED TO JURISDICTION IN THIS PARAGRAPH. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, AND HEREBY AND THEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(k) No Recourse. Notwithstanding anything to the contrary in this Agreement, the Company and each Holder agrees and acknowledges that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement, will be had against any current or future director, officer, employee, general or limited partner or member of any Holder or any Affiliate or assignee thereof, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever will attach to, be imposed on or otherwise be incurred by any current or future officer, agent or employee of any Holder or any current or future member of any Holder or any current or future director, officer, employee, partner or member of any Holder or of any Affiliate or assignee thereof, as such for any obligation of any Holder under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.
(l) Descriptive Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. The use of the word “including” in this Agreement will be by way of example rather than by limitation.
(m) No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction will be applied against any party.
(n) Counterparts. This Agreement may be executed in multiple counterparts, any one of which need not contain the signature of more than one party, but all such counterparts taken together will constitute one and the same agreement.
(o) Electronic Delivery. This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent executed and delivered by means of a photographic, photostatic, facsimile or similar reproduction of such signed writing using a facsimile
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machine or electronic mail will be treated in all manner and respects as an original agreement or instrument and will be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto will re‑execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument will raise the use of a facsimile machine or electronic mail to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or electronic mail as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.
(p) Further Assurances. In connection with this Agreement and the transactions contemplated hereby, each Holder agrees to execute and deliver any additional documents and instruments and perform any additional acts that may be necessary or appropriate to effectuate and perform the provisions of this Agreement and the transactions contemplated hereby.
(q) Dividends, Recapitalizations, etc. If at any time or from time to time there is any change in the capital structure of the Company by way of a stock split, stock dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment will be made in the provisions hereof so that the rights and privileges granted hereby will continue.
(r) No Third-Party Beneficiaries. No term or provision of this Agreement is intended to be, or shall be, for the benefit of any Person not a party hereto, and no such other Person shall have any right or cause of action hereunder, except as otherwise expressly provided herein.
(s) Rule 144, Current Public Information. With a view to making available to the Holders the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration, the Company shall:
(i) make and keep available adequate current public information, as those terms are understood and defined in Rule 144, at all times after the effective date of the registration statement filed by the Company for the initial Public Offering;
(ii) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after the Company has become subject to such reporting requirements);
(iii) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act (at any time after the Company has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 or any similar short-form registration statement (at any time after the Company so qualifies); and (ii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to Form S-3 or any similar short-form registration statement (at any time after the Company so qualifies to use such form);
(iv) upon request by a Holder, instruct the transfer agent for the Registrable Securities to remove restrictive legends from any Registrable Securities eligible for sale pursuant to Rule 144 (to the extent such removal is permitted under Rule 144 and other applicable law) and provide all documentation to such transfer agent, including any legal opinions, that such transfer
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agent requires in order to remove restrictive legends; provided, that such Holder shall deliver such certificates as may be reasonably requested by counsel to the Company in order to effectuate such transfers;
(v) cooperate with the Holder of such Registrable Securities to facilitate the transfer of such securities through the facilities of The Depository Trust Company, in such amounts and credited to such accounts as such Holder may request (or, if applicable, the preparation and delivery of certificates representing such securities, in such denominations and registered in such names as such Holder may request), all to the extent required to enable the Holders to sell Registrable Securities pursuant to Rule 144; and
(vi) upon request by a Holder, deliver to such Holder a written statement as to whether it has complied with such requirements.
Notwithstanding anything to the contrary in this Agreement, the Company’s obligations under this Section 9(s) with respect to a Holder shall survive after such Holder ceases to be a holder of Registrable Securities and shall remain in effect until such former Holder has completed the transfer of all Common Equity that formerly constituted Registrable Securities held by such former Holder.
* * * * *
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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
MADISON AIR SOLUTIONS CORPORATION
By:
/s/ John Lavorato
Name:
John Lavorato
Its:
General Counsel
[Signature Page to Registration Rights Agreement]
MADISON INDUSTRIES HOLDINGS LLC
By:
/s/ Larry Gies
Name:
Larry Gies
Its:
President and Chief Executive Officer
Address:
444 West Lake Street, Suite 4400
Chicago, IL 60606
[Signature Page to Registration Rights Agreement]
K.C. ARMADA, LP
By:
/s/ Remi Beard
Name:
Remi Beard
Its:
Director
Address:
By:
/s/ Panicos Papageorgiou
Name:
Panicos Papageorgiou
Its:
Director
Address:
Kedge Capital Private Equity IX, LP
By:
/s/ Remi Beard
Name:
Remi Beard
Its:
Director
Address:
By:
/s/ Panicos Papageorgiou
Name:
Panicos Papageorgiou
Its:
Director
Address:
[Signature Page to Registration Rights Agreement]
Kedge Capital Private Equity X LP
By:
/s/ Remi Beard
Name:
Remi Beard
Its:
Director
Address:
By:
/s/ Panicos Papageorgiou
Name:
Panicos Papageorgiou
Its:
Director
Address:
Kedge Capital Principal Opportunities V LP
acting by its general partner, Kedge Capital Principal Opportunities V GP Limtied
By:
/s/ Remi Beard
Name:
Remi Beard
Its:
Director
Address:
By:
/s/ Panicos Papageorgiou
Name:
Panicos Papageorgiou
Its:
Director
Address:
[Signature Page to Registration Rights Agreement]
EXHIBIT A
DEFINITIONS
Capitalized terms used in this Agreement have the meanings set forth in the Agreement and, to the extent not defined therein, below.
“Affiliate” of any Person means any other Person controlled by, controlling or under common control with such Person and, in the case of an individual, also includes any member of such individual’s Family Group; provided, that the Company and its Subsidiaries will not be deemed to be Affiliates of any holder of Registrable Securities. As used in this definition, “control” (including, with its correlative meanings, “controlling,” “controlled by” and “under common control with”) will mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities, by contract or otherwise).
“Agreement” has the meaning set forth in the preamble.
“Automatic Shelf Registration Statement” has the meaning set forth in Section 1(a).
“Business Day” means a day that is not a Saturday or Sunday or a day on which banks in New York City are authorized or requested by law to close.
“Charitable Gifting Event” means any transfer by Holdings, or any subsequent transfer by such Holder’s members, partners or other employees, in connection with a bona fide gift to any Charitable Organization on the date of, but prior to, the execution of the underwriting agreement entered into in connection with any underwritten offering.
“Charitable Organization” means a charitable organization as described by Section 501(c)(3) of the Internal Revenue Code of 1986, as in effect from time to time.
“Common Equity” means (i) the Company’s Class A common stock, par value $0.0000001 per share, and (ii) shares of the Company’s Class A common stock issuable upon conversion of the Company’s Class B common stock, par value $0.0000001 per share.
“Company” has the meaning set forth in the preamble and shall include its successor(s).
“Demand Investor” means any Holder entitled to request Demand Registrations pursuant to Section 1(a).
“Demand Registration” has the meaning set forth in Section 1(a).
“Distributed Holdings Investor” has the meaning set forth in Section 1(e)(v)(C).
“End of Suspension Notice” has the meaning set forth in Section 1(f)(ii).
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor federal law then in force, together with all rules and regulations promulgated thereunder.
“Excluded Registration” means any registration (i) pursuant to a Demand Registration (which is addressed in Section 1(a)), or (ii) in connection with registrations on Form S‑4 or S‑8 promulgated by the SEC or any successor or similar forms.
“Expenses” has the meaning set forth in Section 5.
“Family Group” means, with respect to any individual, such individual’s current or former spouse, their respective parents, descendants of such parents (whether natural or adopted) and the spouses of such descendants, any trust, limited partnership, corporation or limited liability company established solely for the benefit of such individual or such individual’s current or former spouse, their respective parents, descendants of such parents (whether natural or adopted) or the spouses of such descendants.
“FINRA” means the Financial Industry Regulatory Authority.
“Free Writing Prospectus” means a free-writing prospectus, as defined in Rule 405.
“Holdback Period” has the meaning set forth in Section 3(a).
“Holder” means a holder of Registrable Securities who is a party to this Agreement (including by way of Joinder).
“Holdings” has the meaning set forth in the preamble.
“Holdings Member” has the meaning set forth in Section 1(e)(v)(C).
“Holdings Registrable Securities” means (i) any Common Equity held (directly or indirectly) by Holdings, any of its Affiliates or any Distributed Holdings Investor as of the date of this Agreement, and (ii) any equity securities of the Company or any Subsidiary issued or issuable with respect to the securities referred to in clause (i) above by way of dividend, distribution, split or combination of securities, or any recapitalization, merger, consolidation or other reorganization.
“Indemnified Parties” has the meaning set forth in Section 6(a).
“Joinder” has the meaning set forth in Section 9(a).
“Kedge” has the meaning set forth in the preamble.
“Kedge Investors” means KC Armada LP, Kedge Capital Private Equity IX, LP, Kedge Capital Private Equity X LP and Kedge Capital Principal Opportunities V LP; provided, that any decision to be made under this Agreement by the Kedge Investors shall be made by the holders of a majority of all Kedge Registrable Securities.
“Kedge Priority Allocation” has the meaning set forth in Section 1(e)(ii).
“Kedge Registrable Securities” means (i) any Common Equity held (directly or indirectly) by the Kedge Investors or any of their Affiliates as of the date of this Agreement, (ii) any Registrable Securities which were originally held by Holdings and which may be received by the Kedge Investors as a result of any redemption of, or distribution or transfer of, such Registrable Securities in respect of the interests of the Kedge Investors in Holdings from time to time, subject to the execution of a Joinder by any Kedge Investors and/or their Affiliates not party to this Agreement, and (iii) any equity securities of the Company or any Subsidiary issued or issuable with respect to the securities referred to in clauses (i) or (ii) above by way of dividend, distribution, split or combination of securities, or any recapitalization, merger, consolidation or other reorganization.
“Long-Form Registrations” has the meaning set forth in Section 1(a).
“Losses” has the meaning set forth in Section 6(a).
“Other Investors” has the meaning set forth in the preamble.
“Other Investor Registrable Securities” means (i) any Common Equity held (directly or indirectly) by any Other Investors or their respective Affiliates as of the date of this Agreement, (ii) any Common Equity obtained and held (directly or indirectly) by any Other Investors or their respective Affiliates after the date of this Agreement, subject to the execution of a Joinder by such Other Investors and/or their Affiliates pursuant to Section 9 hereof, and (ii) any equity securities of the Company or any Subsidiary issued or issuable with respect to the securities referred to in clause (i) above by way of dividend, distribution, split or combination of securities, or any recapitalization, merger, consolidation or other reorganization.
“Participating Demand Investors” means, with respect to any registration or offering effected hereunder, any Demand Investor who is participating in such registration or offering (regardless of whether such Demand Investor shall have exercised any demand rights in connection therewith).
“Participating Holdings Investors” means Holdings or any holder of Holdings Registrable Securities participating in the request for a Demand Registration, Shelf Offering, Piggyback Registration or Underwritten Block Trade.
“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.
“Piggyback Registration” has the meaning set forth in Section 2(a).
“Priority Rights” has the meaning section forth in Section 1(e).
“Public Offering” means any sale or distribution by the Company, one of its Subsidiaries and/or Holders to the public of Common Equity or other securities convertible into or exchangeable for Common Equity pursuant to an offering registered under the Securities Act.
“Qualified Independent Underwriter” has the meaning set forth by FINRA in Section 5121(f)(12), or any successor provision thereto.
“Registrable Securities” means Holdings Registrable Securities, Kedge Registrable Securities and Other Investor Registrable Securities. As to any particular Registrable Securities, such securities will cease to be Registrable Securities when they have been (a) sold or distributed pursuant to a Public Offering, (b) sold in compliance with Rule 144 following the consummation of the initial Public Offering or (c) repurchased by the Company or a Subsidiary of the Company. For purposes of this Agreement, a Person will be deemed to be a holder of Registrable Securities, and the Registrable Securities will be deemed to be in existence, whenever such Person has the right to acquire, directly or indirectly, such Registrable Securities (upon conversion or exercise in connection with a transfer of securities or otherwise, but disregarding any restrictions or limitations upon the exercise of such right), whether or not such acquisition has actually been effected, and such Person will be entitled to exercise the rights of a holder of Registrable Securities hereunder (it being understood that a holder of Registrable Securities may only request that Registrable Securities in the form of Common Equity be registered pursuant to this Agreement). Notwithstanding the foregoing, following the consummation of an initial Public Offering, any Registrable Securities held by any Person (other than Holdings, the Kedge Investors or their respective Affiliates) that may be sold under Rule 144(b)(1)(i) without limitation under any of the other requirements of Rule 144
will be deemed not to be Registrable Securities; provided, however, that the Holdings Registrable Securities and the Kedge Registrable Securities shall continue to be Registrable Securities for so long as Holdings and the Kedge Investors, respectively, together with their respective Affiliates, beneficially own at least 3% of the then-outstanding Common Equity of the Company.
“Rule 144”, “Rule 158”, “Rule 405”, “Rule 415”, “Rule 430B” and “Rule 462” mean, in each case, such rule promulgated under the Securities Act (or any successor provision) by the SEC, as the same will be amended from time to time, or any successor rule then in force.
“Sale of the Company” means any transaction or series of transactions pursuant to which any Person(s) or a group of related Persons (other than Holdings and/or its Affiliates) in the aggregate acquires: (i) Common Equity of the Company entitled to vote (other than voting rights accruing only in the event of a default, breach, event of noncompliance or other contingency) to elect directors with a majority of the voting power of the Company’s board of directors (whether by merger, consolidation, reorganization, combination, sale or transfer of the Company’s Common Equity) or (ii) all or substantially all of the Company’s and its Subsidiaries’ assets determined on a consolidated basis; provided, that a Public Offering will not constitute a Sale of the Company.
“Sale Transaction” has the meaning set forth in Section 3(a).
“SEC” means the United States Securities and Exchange Commission.
“Securities” has the meaning set forth in Section 3(a).
“Securities Act” means the Securities Act of 1933, as amended from time to time, or any successor federal law then in force, together with all rules and regulations promulgated thereunder.
“Shelf Offering” has the meaning set forth in Section 1(d)(i).
“Shelf Offering Notice” has the meaning set forth in Section 1(d)(i).
“Shelf Registration” has the meaning set forth in Section 1(a).
“Shelf Registrable Securities” has the meaning set forth in Section 1(d)(i).
“Shelf Registration Statement” has the meaning set forth in Section 1(d)(i).
“Short-Form Registrations” has the meaning set forth in Section 1(a).
“Subsidiary” means, with respect to the Company, any corporation, limited liability company, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by the Company or one or more of the other Subsidiaries of the Company or a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity, a majority of the limited liability company, partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by the Company or one or more Subsidiaries of the Company or a combination thereof. For purposes hereof, a Person or Persons will be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons will be allocated a majority of limited liability company, partnership, association or other business
entity gains or losses or will be or control the managing director or general partner of such limited liability company, partnership, association or other business entity.
“Suspension Event” has the meaning set forth in Section 1(f)(ii).
“Suspension Notice” has the meaning set forth in Section 1(f)(ii).
“Suspension Period” has the meaning set forth in Section 1(f)(i).
“Threshold” means the total number of shares of Common Equity held by Hartford Fire Insurance Company, Hartford Accident and Indemnity Company, Hartford Life and Accident Insurance Company, Barings Participation Investors, C.M. Life Insurance Company, MM Life Insurance Company, and AMF – Barings Segregated Loans 5 in the aggregate, as of completion of the initial Public Offering.
“Violation” has the meaning set forth in Section 6(a).
“WKSI” means a “well-known seasoned issuer” as defined under Rule 405.
EX-10.1
EX-10.1
Filename: ck0002098430-ex10_1.htm · Sequence: 6
EX-10.1
Exhibit 10.1
DIRECTOR NOMINATION AGREEMENT
THIS DIRECTOR NOMINATION AGREEMENT (this “Agreement”) is made and entered into as of April 15, 2026, by and among Madison Air Solutions Corporation, a Delaware corporation (the “Company”), and Madison Industries Holdings LLC, a Delaware limited liability company (“Holdings”), an entity controlled by the Company’s founder, Larry W. Gies (the “Founder”). This Agreement shall be effective from the date hereof (the “Effective Date”).
WHEREAS, the Company intends to consummate an initial public offering of shares of its Class A common stock, par value $0.0000001 (“Class A common stock,” together with the Company’s Class B common stock, the “Common Stock”); and
WHEREAS, in connection with such events, the parties hereto desire to provide for certain governance rights and other matters with respect to the Company upon the effectiveness of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants and conditions set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree, subject to Section 13 as follows:
1. Board Nomination Rights.
(a) From the Effective Date, (A) Holdings shall have the right, but not the obligation, to nominate to the Board a number of nominees equal to at least: (i) all of the nominees for election to our Board for so long as Holdings beneficially owns 50% or more of the Original Amount; (ii) a number of directors (rounded up to the nearest whole number) equal to 50% of the total directors for so long as Holdings beneficially owns more than 40% and up to 50% of the Original Amount; (iii) a number of directors (rounded up to the nearest whole number) equal to 40% of the total directors for so long as Holdings beneficially owns over 30% and up to 40% of the Original Amount; (iv) a number of directors (rounded up to the nearest whole number) equal to 30% of the total directors for so long as Holdings beneficially owns more than 20% and up to 30% of the Original Amount; (v) a number of directors (rounded up to the nearest whole number) equal to 20% of the total directors for so long as Holdings beneficially owns more than 10% and up to 20% of the Original Amount; and (vi) a number of director nominees (rounded up to the nearest whole number) equal to 10% of the total directors for so long as Holdings beneficially owns more than 5% and up to 10% of the Original Amount (such persons, the “Nominees”). For purposes of calculating the number of Directors that Holdings is entitled to nominate pursuant to the immediately preceding sentence, any fractional amounts shall automatically be rounded up to the nearest whole number (e.g., 1 ¼ Directors shall equate to 2 Directors) and any such calculations shall be made after taking into account any increase in the total number of Directors. Upon the death or Disability of the Founder, Holdings will no longer hold the nomination rights specified in (i) through (vi).
(b) In the event that Holdings has nominated less than the total number of nominees that Holdings shall be entitled to nominate pursuant to Section 1(a), Holdings shall have the right, at any time, to nominate such additional nominees to which it is entitled, in which case, the Company and the Directors shall take all necessary corporation action, to the fullest extent permitted by applicable law (including with respect to fiduciary duties under Delaware law), to (x) cause the Holdings nominee to be elected to the Board, either by filling any vacancy on the Board created when a director previously nominated by Holdings ceased to be a director, or, if there is no such vacancy to fill, by increasing the size of the Board by the number necessary to create a directorship for the Holdings nominee and filling such newly created directorship(s) with the individual nominated by Holdings.
(c) The Company shall pay all reasonable out-of-pocket expenses incurred by any Nominee in connection with the performance of his or her duties as a director and in connection with his or her attendance at any meeting of the Board.
(d) For purposes of this Agreement, the following terms shall have the following meanings:
(i)
“Affiliate” of any person shall mean any other person controlled by, controlling or under common control with such person; where “control” (including, with its correlative meanings, “controlling,” “controlled by” and “under common control with”) means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities, by contract or otherwise).
(ii)
“Beneficially Own” shall mean that a specified person has or shares the right, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, to vote and/or dispose of (or to direct the voting and/or disposition of) any shares of capital stock of the Company.
(iii)
“Director” means any member of the Board.
(iv)
“Disability” means with respect to an individual, permanent and total disability such that the individual is unable to engage in any substantial gainful activity by reason of any medically determinable mental impairment which would reasonably be expected to result in death or which has lasted or would reasonably be expected to last for a continuous period of not less than 12 months as determined by a licensed medical practitioner. In the event of a dispute whether the individual has suffered a Disability, no Disability of the individual shall be deemed to have occurred unless and until an affirmative ruling regarding such Disability has been made by a court of competent jurisdiction, and such ruling has become final and nonappealable.
(v)
“Original Amount” means, with respect to Holdings, the aggregate number of shares of Common Stock held, directly or indirectly, by Holdings immediately following the closing of the IPO, as such number may be adjusted from time to time for any reorganization, recapitalization, stock dividend, stock split, reverse stock split or other similar changes in the Company’s capitalization. As of the Effective Date, the Original Amount of Holdings is equal to 324,379,859.
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(e) No reduction in the number of shares of Common Stock that Holdings Beneficially Owns shall shorten the term of any incumbent director. At the Effective Date, the Board shall be comprised of 4 members.
(f) In the event that any Nominee shall cease to serve for any reason, Holdings shall be entitled to designate such person’s successor in accordance with this Agreement (regardless of Holdings’ Beneficial Ownership of Common Stock at the time of such vacancy) and the Board shall promptly fill the vacancy with such successor nominee; it being understood that any such designee shall serve the remainder of the term of the director whom such designee replaces.
(g) If a Nominee is not appointed or elected to the Board because of such person’s death, disability, disqualification, withdrawal as a nominee or for any other reason is unavailable or unable to serve on the Board, Holdings shall be entitled to designate promptly another nominee and the director position for which the original Nominee was nominated shall not be filled pending such designation.
(h) So long as Holdings has the right to nominate at least one Nominee under Section 1(a) or any such Nominee is serving on the Board, the Company shall maintain in effect at all times directors and officers indemnity insurance coverage reasonably satisfactory to Holdings, and the Company’s Amended and Restated Certificate of Incorporation and Bylaws (each as may be further amended, supplemented or waived in accordance with its terms) shall at all times provide for indemnification, exculpation and advancement of expenses to the fullest extent permitted under applicable law.
(i) At any time that Holdings shall have any nomination rights under Section 1(a), the Company shall not increase or decrease the number of Directors serving on the Board without the prior written consent of Holdings.
(j) At such time as the Company ceases to be a “controlled company” and is required by applicable law or the New York Stock Exchange (the “Exchange”) listing standards to have a majority of the Board comprised of “independent directors” (subject in each case to any applicable phase-in periods), the Nominees shall include a number of persons that qualify as “independent directors” under applicable law and the Exchange listing standards such that, together with any other “independent directors” then serving on the Board that are not Nominees, the Board is comprised of a majority of “independent directors.”; provided that at any time that Holdings shall have any nomination rights under Section 1(a), Holdings shall be entitled to nominate at least one Nominee who does not qualify as an “independent director.”
(k) At any time that Holdings shall have any nomination rights under Section 1(a), the Company shall not take any action, including making or recommending any amendment to Company’s Amended and Restated Certificate of Incorporation or Bylaws (each as may be further amended, supplemented or waived in accordance with its terms) that could reasonably be expected to adversely affect Holdings’ rights under this Agreement, in each case without the prior written consent of Holdings.
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(l) The Company recognizes that each Nominee (i) will from time to time receive non-public information concerning the Company, and (ii) may share such information with other individuals associated with Holdings that designated such Nominee. The Company hereby irrevocably consents to such sharing. Holdings agrees that it will keep confidential and not disclose or divulge to any third party any confidential information regarding the Company it receives from the Company or a Nominee, unless such information (x) is available or becomes available to the public in general, (y) is or has been independently developed or conceived by Holdings without use of the Company’s confidential information or (z) is or has been made known or disclosed to Holdings by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that Holdings may disclose confidential information (I) to its Affiliates (other than portfolio companies), (II) to each of its and its Affiliate’s (other than portfolio companies) attorneys, accountants, consultants, advisors and other professionals to the extent necessary to obtain their services in connection with evaluating the information, or (III) as may be required by law or legal, judicial or regulatory process or requested by any regulatory or self-regulatory authority or examiner, provided that Holdings takes reasonable steps to minimize the extent of any required disclosure.
2. Company Obligations. The Company agrees that prior to the date that Holdings ceases to Beneficially Own shares of Common Stock representing at least 5% of the total voting power of the then outstanding Common Stock, (i) each Nominee is included in the Board’s slate of nominees to the stockholders (the “Board’s Slate”) for each election of members of the Board; and (ii) each Nominee is included in the proxy statement prepared by management of the Company in connection with soliciting proxies for every meeting of the stockholders of the Company called with respect to the election of members of the Board (each, a “Director Election Proxy Statement”), and at every adjournment or postponement thereof, and on every action or approval by written consent of the stockholders of the Company or the Board with respect to the election of members of the Board. Holdings will promptly report to the Company after Holdings ceases to Beneficially Own shares of Common Stock representing at least 5% of the Original Amount, such that the Company is informed of when this obligation terminates. The calculation of the number of Nominees that Holdings is entitled to nominate to the Board’s Slate for any election of directors shall be based on the percentage of the total voting power of the then outstanding Common Stock then Beneficially Owned by Holdings (“Holdings Voting Control”) immediately prior to the mailing to shareholders of the Director Election Proxy Statement relating to such election (or, if earlier, the filing of the definitive Director Election Proxy Statement with the U.S. Securities and Exchange Commission). Unless Holdings notifies the Company otherwise prior to the mailing to shareholders of the Director Election Proxy Statement relating to an election of directors (or, if earlier, the filing of the definitive Director Election Proxy Statement with the U.S. Securities and Exchange Commission), the Nominees for such election shall be presumed to be the same Nominees currently serving on the Board, and no further action shall be required of Holdings for the Board to include such Nominees on the Board’s Slate; provided, that, in the event Holdings is no longer entitled to nominate the full number of Nominees then serving on the Board, Holdings shall provide advance written notice to the Company of which currently servicing Nominee(s) shall be excluded from the Board Slate, and of any other changes to the list of Nominees. If Holdings fails to provide such notice prior to the mailing to shareholders of the Director Election Proxy Statement relating to such election (or, if earlier, the filing of the definitive Director Election Proxy Statement with the U.S. Securities and Exchange Commission), a majority of the “independent directors” then serving on the Board
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shall determine which of the nominees in the class up for election in the next annual meeting then serving on the Board will be included in the Board’s Slate. Furthermore, the Company agrees for so long as the Company qualifies as a “controlled company” under the rules of the Exchange the Company will elect to be a “controlled company” for purposes of the Exchange and will disclose in its annual meeting proxy statement that it is a “controlled company” and the basis for that determination. The Company and Holdings acknowledge and agree that, as of the Effective Date, the Company is a “controlled company.” The Company agrees to provide written notice of the preparation of a Director Election Proxy Statement to Holdings at least 20 business days, but no more than 40 business days, prior to the earlier of the mailing and the filing date of any Director Election Proxy Statement.
3. Amendment and Waiver. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by the Company and Holdings, or in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. Holdings shall not be obligated to nominate all (or any) of the Nominees it is entitled to nominate pursuant to this Agreement for any election of directors but the failure to do so shall not constitute a waiver of its rights hereunder with respect to future elections; provided, however, that in the event Holdings fails to nominate all (or any) of the Nominees it is entitled to nominate pursuant to this Agreement prior to the mailing to shareholders of the Director Election Proxy Statement relating to such election (or, if earlier, the filing of the definitive Director Election Proxy Statement with the U.S. Securities and Exchange Commission), the Compensation and Nominating Committee of the Board shall be entitled to nominate individuals in lieu of such Nominees for inclusion in the Board’s Slate and the applicable Director Election Proxy Statement with respect to the election for which such failure occurred and Holdings shall be deemed to have waived its rights under Section 1 and Section 2 with respect to such election (but solely with respect to such election and not any subsequent election); provided, further, however, that any such waiver shall only be effective if the Company has provided written notice to Holdings of such Director Election Proxy Statement no less than 20 business days, and no more than 40 business days, prior to the earlier of the mailing or filing date of such Director Election Proxy Statement. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
4. Benefit of Parties. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective permitted successors and assigns. Notwithstanding the foregoing, the Company may not assign any of its rights or obligations hereunder without the prior written consent of Holdings. Except as otherwise expressly provided in Section 6 and the last sentence of Section 7(b), nothing herein contained shall confer or is intended to confer on any third party or entity that is not a party to this Agreement any rights under this Agreement.
5. Assignment. Upon written notice to the Company, Holdings may assign to any of its Affiliates (other than a portfolio company) all of its rights hereunder and, following such assignment, such assignee shall be deemed to be “Holdings” for all purposes hereunder but no such assignment shall relieve the assignor of any of its obligations hereunder.
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6. Indemnification. The Company shall defend, indemnify and hold harmless Holdings, its respective Affiliates, partners, employees, agents, directors, managers, officers and controlling persons (collectively, the “Indemnified Parties”) from and against any and all actions, causes of action, suits, claims, liabilities, losses, damages, costs, expenses, or other obligations of any kind or nature (whether accrued or fixed, absolute or contingent) in connection therewith (including reasonable attorneys’ fees and expenses) incurred by the Indemnified Parties before or after the date of this Agreement (each, an “Action”) arising directly or indirectly out of, or in any way relating to, (i) Holdings or its Affiliates’ Beneficial Ownership of Common Stock or other equity securities of the Company or control or ability to influence the Company or any of its subsidiaries (other than, in the case of any Indemnified Party, any such Actions (x) to the extent such Actions arise out of any breach of this Agreement by such Indemnified Party or its Affiliates or the breach of any fiduciary or other duty or obligation of such Indemnified Party to its direct or indirect equity holders, creditors or Affiliates or (y) to the extent such Actions are directly caused by such Indemnified Party’s willful misconduct), (ii) the business, operations, properties, assets or other rights or liabilities of the Company or any of its subsidiaries or (iii) any services provided prior, on or after the date of this Agreement by Holdings or its Affiliates to the Company or any of its subsidiaries. The Company shall defend at its own cost and expense in respect of any Action which may be brought against the Company and/or its Affiliates and the Indemnified Parties. The Company shall defend at its own cost and expense any and all Actions which may be brought in which the Indemnified Parties may be impleaded with others upon any Action by the Indemnified Parties, except that if such Actions shall be proven to be the direct result of gross negligence, bad faith or willful misconduct by any of the Indemnified Parties, then such Indemnified Party shall reimburse the Company for the costs of defense and other costs incurred by the Company in proportion to such Indemnified Party’s culpability as proven. In the event of the assertion against any Indemnified Party of any Action or the commencement of any Action, the Company shall be entitled to participate in such Action and in the investigation of such Action and, after written notice from the Company to such Indemnified Party, to assume the investigation or defense of such Action with counsel of the Company’s choice at the Company’s expense; provided, however, that such counsel shall be reasonably satisfactory to the Indemnified Party. Notwithstanding anything to the contrary contained herein, the Company may retain one firm of counsel to represent all Indemnified Parties in such Action; provided, however, that the Indemnified Party shall have the right to employ a single firm of separate counsel (and any necessary local counsel) and to participate in the defense or investigation of such Action and the Company shall bear the expense of such separate counsel (and local counsel, if applicable), if (x) in the opinion of counsel to the Indemnified Party use of counsel of the Company’s choice could reasonably be expected to give rise to a conflict of interest, (y) the Company shall not have employed counsel satisfactory to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the assertion of any such Action or (z) the Company shall authorize the Indemnified Party to employ separate counsel at the Company’s expense. The Company further agrees that with respect to any Indemnified Party who is employed, retained or otherwise associated with, or appointed or nominated by, Holdings or any of its Affiliates and who acts or serves as a director, officer, manager, fiduciary, employee, consultant, advisor or agent of, for or to the Company or any of its subsidiaries, that the Company or such subsidiaries, as applicable, shall be primarily liable for all indemnification, reimbursements, advancements or similar payments (the “Indemnity Obligations”) afforded to such Indemnified Party acting in such capacity or capacities on behalf or at the request of the Company, whether the Indemnity
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Obligations are created by law, organizational or constituent documents, contract (including this Agreement) or otherwise. The Company hereby agrees that in no event shall the Company or any of its subsidiaries have any right or claim against Holdings or any of its Affiliates for contribution or have rights of subrogation against Holdings or any of its Affiliates through an Indemnified Party for any payment made by the Company or any of its subsidiaries with respect to any Indemnity Obligation. In addition, the Company hereby agrees that in the event that Holdings or any of its Affiliates pays or advances an Indemnified Party any expenses with respect to an Indemnity Obligation, the Company will, or will cause its subsidiaries to, as applicable, promptly reimburse Holdings or its Affiliate, for such payment or advance upon request; subject to the receipt by the Company of a written undertaking executed by the Indemnified Party and Holdings or its Affiliate to repay any such amounts if it shall ultimately be determined by a court of competent jurisdiction that such Indemnified Party was not entitled to be indemnified by the Company. The foregoing right to indemnity shall be in addition to any rights that any Indemnified Party may have at common law or otherwise and shall remain in full force and effect following the termination of this Agreement and the completion or any termination of the engagement or other service relationship of such Indemnified Party acting in such capacity or capacities on behalf or at the request of the Company. If for any reason the foregoing indemnification is unavailable to any Indemnified Party or insufficient to hold it harmless as and to the extent contemplated by this Section 7, then the Company shall contribute to the amount paid or payable by the Indemnified Party as a result of such Action in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Indemnified Party, as the case may be, on the other hand, as well as any other relevant equitable considerations. This Section 7(a) shall not apply with respect to any taxes, other than taxes that represent causes of action, suits, claims, liabilities, losses, damages, costs, expenses, or obligations arising from a non-tax claim.
7. Headings. Headings are for ease of reference only and shall not form a part of this Agreement.
8. Governing Law. This Agreement shall be construed in accordance with and governed by the law of the State of Delaware without giving effect to the principles of conflicts of laws thereof.
9. Jurisdiction. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement may be brought against any of the parties in any federal court located in the State of Delaware or any Delaware state court, and each of the parties hereby consents to the exclusive jurisdiction of such court (and of the appropriate appellate courts) in any such suit, action or proceeding and waives any objection to venue laid therein. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each of the parties agrees that service of process upon such party at the address referred to in Section 17, together with written notice of such service to such party, shall be deemed effective service of process upon such party.
10. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.
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11. Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and negotiations, both written and oral, among the parties with respect to the subject matter hereof.
12. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be deemed an original. This Agreement shall become effective when each party shall have received a counterpart hereof signed by each of the other parties. An executed copy or counterpart hereof delivered by facsimile shall be deemed an original instrument.
13. Severability. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.
14. Further Assurances. Each of the parties hereto shall execute and deliver such further instruments and do such further acts and things as may be required to carry out the intent and purpose of this Agreement.
15. Specific Performance. Each of the parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in any federal or state court located in the State of Delaware, in addition to any other remedy to which they are entitled at law or in equity.
16. Notices. All notices, requests and other communications to any party or to the Company shall be in writing (including email, telecopy or similar writing) and shall be given,
If to the Company:
Madison Air Solutions Corporation
444 West Lake Street, Suite 4460
Chicago, IL 60606
Attention: John Lavorato, General Counsel
Email: [****]
With a copy to (which shall not constitute notice):
Kirkland & Ellis LLP
333 West Wolf Point Plaza
Chicago, IL 60654
Attention: Robert M. Hayward, P.C., Robert E. Goedert, P.C., A.J. Million
Email: [****], [****], [****]
If to Holdings:
Madison Industries Holdings LLC
444 West Lake Street, Suite 4400
Chicago, IL 60606
Attention: Larry W. Gies
Email: [****]
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With a copy to (which shall not constitute notice):
Paul Hastings LLP
71 S. Wacker Drive, 45th Floor
Chicago, IL 60606
Attention: Brian Richards
Email: [****]
or to such other address or telecopier number as such party or the Company may hereafter specify for the purpose by notice to the other parties and the Company. Each such notice, request or other communication shall be effective when delivered at the address specified in this Section 17 during regular business hours.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.
MADISON AIR SOLUTIONS CORPORATION
By:
/s/ John Lavorato
Name: John Lavorato
Title: General Counsel
MADISON INDUSTRIES HOLDINGS LLC
By:
/s/ Larry W. Gies
Name: Larry W. Gies
Title: Manager
[Signature Page to Director Nomination Agreement]
EX-10.2
EX-10.2
Filename: ck0002098430-ex10_2.htm · Sequence: 7
EX-10.2
Exhibit 10.2
SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (this “Agreement”) is made and entered into as of April 15, 2026, by and among Madison Industries Holdings LLC, a Delaware limited liability company (“Holdings”), Madison Industries International Holdings LLC, a Delaware limited liability company (“MII”), Madison Industries US Holdings Corp, a Delaware corporation (“MIUS”), and Madison Air Solutions Corporation, a Delaware corporation (“Madison Air”). Holdings, MII, MIUS and Madison Air are collectively referred to herein as the “Parties”, and each a “Party.”
RECITALS
WHEREAS, the manager of MII (the “Manager”) has determined that it is in the best interests of MII and its member to separate Madison Industries IAQ Solutions Corporation, a Delaware corporation (“IAQ Solutions”) and its subsidiaries from the remainder of MII to facilitate the public listing of Madison Air’s equity;
WHEREAS, in furtherance of foregoing, (a) MIUS will distribute to MII, the owner of all of its equity interests, all of the ownership interests of IAQ Solutions (the “Internal Distribution”), (b) MII will distribute to Holdings, the owner of all of its equity interests, all of the ownership interests of IAQ Solutions (the “External Distribution” and, together with the Internal Distribution, the “Distributions”), and (c) Holdings will contribute to its wholly-owned subsidiary, Madison Air, all of the ownership interests of IAQ Solutions, in exchange for shares of Madison Air (the “Contribution” and, together with the Distributions, the “Separation”);
WHEREAS, Madison Air has been incorporated solely for these purposes and has not engaged in activities except in connection with the Separation;
WHEREAS, for U.S. federal income tax purposes, it is intended that (a) the Distributions will qualify as a transaction in which no gain or loss shall be recognized (and no amount shall be included in income) pursuant to Sections 355(a) and (c) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), and (b) the Contribution (along with any contemporaneous contributions of property to Madison Air) will qualify as a transaction in which no gain or loss shall be recognized pursuant to Section 351(a) of the Code;
WHEREAS, Madison Air has prepared filed with the U.S. Securities and Exchange Commission (the “SEC”), a Form S-1, which sets forth disclosure concerning Madison Air and the Separation (the “Form S-1”);
WHEREAS, each of the Parties has determined that it is appropriate and desirable to set forth the principal corporate transactions required to effect the Separation and certain other agreements that will govern certain matters relating to the Separation; and
NOW, THEREFORE, in consideration of the mutual promises and subject to the terms and conditions herein contained, and other good and valuable consideration, had and received, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS
For all purposes under this Agreement:
“Action” shall mean any demand, action, claim (including any cross-claim or counterclaim), dispute, suit, countersuit, arbitration, inquiry, subpoena, proceeding or investigation of any nature (whether criminal, civil, legislative, administrative, regulatory, prosecutorial or otherwise) by or before any federal, state, local, foreign or international Governmental Authority or any arbitration or mediation tribunal.
“Ancillary Agreements” shall mean all agreements (other than this Agreement) entered into by the Parties or the members of their respective Groups (but only agreements as to which no Third Party is a party) in connection with the Separation, including the Tax Matters Agreement entered into as of April 15, 2026 by and among MII and Madison Air, the Transition Services Agreement entered into as of April 15, 2026, by and between MII and Madison Air (the “Transition Services Agreement”) and the Transfer Documents (as defined below), and any other agreement that by its express terms provides that it shall be an Ancillary Agreement for purposes of this Agreement.
“Governmental Authority” shall mean any nation or government, any state, municipality or other political subdivision thereof, and any entity, body, agency, commission, department, board, bureau, court, tribunal or other instrumentality, whether federal, state, local, domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory, administrative or other similar functions of, or pertaining to, a government and any executive official thereof.
“Group” shall mean either the Madison Air Group or the MII Group, as the context requires.
“Law” shall mean any national, supranational, federal, state, provincial, local or similar law (including common law), statute, code, order, ordinance, rule, regulation, treaty (including any income tax treaty), license, permit, decree, injunction, binding judicial or administrative interpretation or other requirement, in each case, enacted, promulgated, issued or entered by a Governmental Authority.
“Liabilities” shall mean all debts, guarantees, assurances, commitments, liabilities, responsibilities, Losses, remediation, deficiencies, fines, settlements, sanctions, costs, interest and obligations of any nature or kind, whether accrued or fixed, absolute or contingent, matured or unmatured, accrued or not accrued, asserted or unasserted, liquidated or unliquidated, foreseen or unforeseen, known or unknown, reserved or unreserved, or determined or determinable, including those arising under any Law, Action (including any Third-Party Claim) or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority or arbitration tribunal, and those arising under any contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment or undertaking, or any fines, damages or equitable relief that is imposed, in each case, including all costs and expenses relating thereto.
“Losses” shall mean actual losses (including any diminution in value), costs, damages, penalties and expenses (including legal and accounting fees and expenses and costs of investigation and litigation), whether or not involving a Third-Party Claim.
“Madison Air Assets” shall mean all assets of Madison Air or any other member of the Madison Air Group.
“Madison Air Business” shall mean all businesses, operations and activities (whether or not such businesses, operations or activities are or have been terminated, divested or discontinued) conducted at any time prior to the Effective Time by Madison Air or any other member of the Madison Air Group.
“Madison Air Group” shall mean Madison Air and each Person that is a Subsidiary of Madison Air immediately following the Contribution.
“Madison Air Liabilities” shall mean any and all Liabilities to the extent relating to, arising out of, or resulting from, the Madison Air Business.
“MII Assets” shall mean all assets of MII or any other member of the MII Group.
“MII Business” shall mean all businesses, operations and activities (whether or not such businesses, operations or activities are or have been terminated, divested or discontinued) conducted at any time prior to the Effective Time by MII or any other member of the MII Group.
“MII Group” shall mean MII and each Person that is a Subsidiary of MII immediately following the External Distribution.
“MII Liabilities” shall mean any and all Liabilities to the extent relating to, arising out of, or resulting from, the MII Business.
“Person” shall mean an individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated organization, a limited liability entity, any other entity and any Governmental Authority.
“Subsidiary” shall mean, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (a) beneficially owns, either directly or indirectly, more than fifty percent (50%) of (i) the total combined voting power of all classes of voting securities, (ii) the total combined equity interests or (iii) the capital or profit interests, in the case of a partnership, or (b) otherwise has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.
“Third Party” shall mean any Person other than the Parties or any members of their respective Groups.
“Third-Party Claim” shall mean any assertion by Third Party of any claim or of the commencement by any such Person of any Action.
ARTICLE II
AGREEMENTS
Section 2.1 Separation.
(a)
Effective as of the execution and delivery of this Agreement (the “Effective Time”), MIUS hereby distributes to MII, the owner of all of its equity interests, all of the ownership interests of IAQ Solutions.
(b)
Immediately following the consummation of the transaction set forth in Section 2.1(a), MII hereby distributes to Holdings, the owner of all of its equity interests, all of the ownership interests of IAQ Solutions.
(c)
Immediately following the consummation of the transaction set forth in Section 2.1(b), Holdings hereby contributes to its wholly-owned subsidiary, Madison Air, all of the ownership interests of IAQ Solutions, in exchange for 320,676,155 shares of Class B common stock, par value $0.0000001 per share, of Madison Air.
(d)
Immediately following the consummation of the transaction set forth in Section 2.1(c), Madison Air hereby cancels the 1,000 shares of Class A common stock, par value $0.0000001 per share, of Madison Air currently held by holdings for no consideration, and Holdings hereby consents to such cancellation.
(e)
Following the consummation of the transactions set forth in Section 2.1(d), Madison Air will receive, in a series of transactions, minority interests in its direct subsidiary and in several indirect subsidiaries as set forth in the Form S-1. Immediately following such receipt, Madison Air hereby contributes to its direct subsidiary, and causes such direct subsidiary and each successive direct subsidiary to contribute to its direct subsidiary, all such minority interests other than the minority interests in such applicable direct subsidiary, such that each subsidiary in the chain below Madison Air will be wholly-owned by its parent. Such contributions will be capital contributions.
Section 2.2 Transfer Documents. In furtherance of the distributions and contributions effected pursuant to Section 2.1, each Party has executed and delivered, or will upon request of the other Party at any time after the Effective Time execute and deliver, stock powers and other instruments of transfer, conveyance, assignment and cancellation as and to the extent necessary to evidence the Separation and each has provided an IRS Form W-9. All of the foregoing documents contemplated by this Section 2.2 shall be referred to collectively herein as the “Transfer Documents.”
ARTICLE III
RELEASES AND INDEMNIFICATION
Section 3.1 Release of Pre-Separation Claims.
(a)
MII Release of Madison Air. MII does hereby, for itself and each other member of the MII Group, and their respective successors and assigns, and, to the extent permitted by Law, all Persons who at any time are or have been stockholders, directors, officers, agents or employees of any member of the MII Group (in each case, in their respective capacities as such), remise, release and forever discharge (i) Madison Air and the other members of the Madison Air Group, and their respective successors and assigns, and (ii) all Persons who at any time prior to the Effective Time have been stockholders, directors, officers, agents or employees of any member of the Madison Air Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, in each case from: (A) all Liabilities arising from or in connection with the Separation and any related transactions, and (B) all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing on or prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent relating to, arising out of or resulting from the MII Business, the MII Liabilities or the MII Assets.
(b)
Madison Air Release of MII. Madison Air does hereby, for itself and each other member of the Madison Air Group, and their respective successors and assigns, and, to the extent permitted by Law, all Persons who at any time are or have been stockholders, directors, officers, agents or employees of any member of the Madison Air Group (in each case, in their respective capacities as such), remise, release and forever discharge (i) MII and the other members of the MII Group, and their respective successors and assigns, and (ii) all Persons who at any time prior to the Effective Time have been stockholders, directors, officers, agents or employees of any member of the MII Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, in each case from: (A) all Liabilities arising from or in connection with the Separation and any related transactions, and (B) all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing on or prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent relating to, arising out of or resulting from the Madison Air Business, the Madison Air Liabilities or the Madison Air Assets.
(c)
Obligations Not Affected. Nothing contained in Section 3.1(a) or Section 3.1(b) shall impair any right of any Person to enforce this Agreement, any Ancillary Agreement or any agreements, arrangements, commitments or understandings that
are continuing pursuant to the Transition Services Agreement. Nothing contained in Section 3.1(a) or Section 3.1(b) shall release any Person from:
(i)
any Liability for the sale, lease, construction or receipt of goods, property or services purchased, obtained or used in the ordinary course of business by a member of one Group from a member of the other Group on or prior to Effective Time;
(ii)
any Liability that the Parties may have with respect to indemnification or contribution or other obligations pursuant to this Agreement, any Ancillary Agreement or otherwise for claims brought against the Parties by Third Parties, which Liability shall be governed by the provisions of Article IV; or
(iii)
any Liability, to the extent, the release of which would result in the release of any Person other than a Person released pursuant to this Section 3.1. In addition, nothing contained in Section 3.1(a) shall release any member of a Group from honoring its existing obligations to indemnify any director, officer or employee of the other Group who was a director, officer or employee of any member of such first Group on or prior to the Effective Time, to the extent that such director, officer or employee becomes a named defendant in any Action with respect to which such director, officer or employee was entitled to such indemnification pursuant to such existing obligations.
(d)
No Claims. MII shall not make, and shall not permit any other member of the MII Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Holdings or any other member of the Madison Air Group, or any other Person released pursuant to Section 3.1(a), with respect to any Liabilities released pursuant to Section 3.1(a). Madison Air shall not make, and shall not permit any other member of the Madison Air Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against MII or any other member of the MII Group, or any other Person released pursuant to Section 3.1(b), with respect to any Liabilities released pursuant to Section 3.1(b).
Section 3.2 Indemnification by Madison Air. Except as otherwise specifically set forth in this Agreement or in any Ancillary Agreement, to the fullest extent permitted by Law, Madison Air shall, and shall cause the other members of the Madison Air Group to, indemnify, defend and hold harmless MII, each other member of the MII Group and each of their respective past, present and future directors, officers, employees and agents, in each case in their respective capacities as such, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “MII Indemnitees”), from and against any and all Liabilities of the MII Indemnitees relating to, arising out of or resulting from, directly or indirectly, any Madison Air Liability.
Section 3.3 Indemnification by MII. Except as otherwise specifically set forth in this Agreement or in any Ancillary Agreement, to the fullest extent permitted by Law, MII shall, and shall cause the other members of the MII Group to, indemnify, defend and hold harmless Madison Air, each other member of the Madison Air Group and each of their respective past, present and future directors, officers, employees and agents, in each case in their respective capacities as such, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “Madison Air Indemnitees”), from and against any and all Liabilities of the Madison Air Indemnitees relating to, arising out of or resulting from, directly or indirectly, any MII Liability.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Notices. Any notices, consents or other communication required to be sent or given hereunder by any of the Parties shall in every case be in writing and shall be deemed properly served if (a) delivered personally, (b) delivered by a recognized international courier service, or (c) sent by email to the Parties at the addresses as set forth below or at such other addresses as may be furnished in writing.
(a)
If to Holdings, MII or MIUS:
[Name of addressee]
444 West Lake, Suite 4400
Chicago, IL 60606
Attention: Larry W. Gies
Email: [****]
with a copy to:
Paul Hastings LLP
71 S. Wacker Drive, Suite 4500
Chicago, IL 60606
Attention: Brian F. Richards
Email: [****]
(b)
If to Madison Air:
Madison Air Solutions Corporation
444 West Lake Street, Suite 4460
Chicago, IL 60606
Attention: John Lavorato, General Counsel
Email: [****]
Date of service of such notice shall be (x) the date such notice is personally delivered, (y) if sent by email, the date of transmission if sent on a business day during the recipient’s normal business hours and otherwise on the next succeeding business day (as evidenced by a “sent” email in sender’s account which indicates the date and time of transmission) and (z) on the date of scheduled delivery if sent by recognized international courier.
Section 4.2 Amendment and Waiver. This Agreement may be amended by a writing executed by each of the Parties. Any provision of this Agreement may be waived by the party against whom such waiver is sought to be enforced. No failure of any Party to exercise any right or remedy given to such Party under this Agreement or otherwise available to such Party or to insist upon strict compliance by any other Party with its obligations hereunder, and no custom or practice in variance with the terms hereof, shall constitute a waiver of any Party’s right to demand exact compliance with the terms hereof. Any written waiver shall be limited to those items specifically waived therein and shall not be deemed to waive any future breaches or violations or other non-specified breaches or violations unless, and to the extent, expressly set forth therein.
Section 4.3 Successors and Assigns. All covenants and agreements contained in this Agreement shall bind and inure to the benefit of the Parties and their respective successors and permitted assigns. No Party may assign any of its rights or obligations hereunder without the express written consent of the other Parties.
Section 4.4 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 invalid, illegal or unenforceable in any respect under any applicable law in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein or if such term or provision could be drawn more narrowly so as not to be illegal, invalid, prohibited or unenforceable in such jurisdiction, it shall be so narrowly drawn, as to such jurisdiction, without invalidating the remaining terms and provisions of this Agreement or affecting the legality, validity or enforceability of such term or provision in any other jurisdiction.
Section 4.5 Counterparts; Binding Agreement. This Agreement may be executed in two or more separate counterparts, any one of which need not contain the signatures of more than one Party, but each of which will be an original and all of which together shall constitute one and the same agreement binding on both of the Parties.
Section 4.6 Descriptive Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement. The use of the word “including” in this Agreement shall be by way of example rather than by limitation. Reference to any agreement, document or instrument means such agreement, document or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and if applicable hereof. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.
Section 4.7 Applicable Law; Waiver of Jury Trial. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICT OF LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF
THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH OF THE PARTIES (INCLUDING EACH MEMBER) IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION OR OTHER PROCEEDING INSTITUTED BY OR AGAINST SUCH PARTY IN RESPECT OF ITS OBLIGATIONS HEREUNDER.
Section 4.8 Consent to Jurisdiction; Forum Selection; Service of Process. Any action, suit or proceeding arising out of or relating to this Agreement or any transaction contemplated hereby shall be brought exclusively in the Delaware Court of Chancery in New Castle County, or in the event (but only in the event) that such court does not have subject matter jurisdiction over such action, suit or proceeding, the United States District Court for the District of Delaware, or to the extent neither of such courts has subject matter jurisdiction, the Superior Court of the State of Delaware, and in each case, the appellate courts having jurisdiction of appeals in such courts, and each of the Parties hereby submits to the exclusive jurisdiction of such courts for itself and with respect to its property, generally and unconditionally, for the purpose of any such action, suit or proceeding. The aforementioned choice of venue is intended by the Parties to be mandatory and not permissive in nature, thereby precluding the possibility of litigation between the Parties with respect to or arising out of this Agreement or the transactions contemplated hereby in any jurisdiction other than those specified in this Section 4.8. A final judgment in any such action, suit or proceeding may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party hereto irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby brought in accordance with this Section 4.8, and hereby irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in accordance with this Section 4.8 has been brought in an inconvenient forum or does not have jurisdiction over any party hereto. Each party hereto further agrees that service of any process, summons, notice or document by U.S. registered mail to such party’s respective address set forth herein shall be effective service of process for any such action, suit or proceeding.
Section 4.9 Third Parties. Except for the indemnification rights under this Agreement of any MII Indemnitee or Madison Air Indemnitee in their respective capacities as such, and the releases of the members of the MII Group and the Madison Air Group under this Agreement, (a) the provisions of this Agreement are solely for the benefit of the Parties and are not intended to confer upon any Person, except the Parties, any rights or remedies hereunder, and (b) there are no third-party beneficiaries of this Agreement and this Agreement shall not provide any Third Party with any remedy, claim, Liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement.
Section 4.10 Entire Agreement. This Agreement and the Ancillary Agreements embody the complete agreement and understanding among the Parties with respect to the subject matter herein and supersede and preempt any prior understandings, agreements or representations by or among the Parties, written or oral, which may have related to the subject matter hereof in any way.
Section 4.11 Delivery by Electronic Means. This Agreement and any amendments hereto or thereto, to the extent signed and delivered by means of electronic transmission in portable document format (.pdf) or comparable electronic transmission, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.
Section 4.12 Limitations of Liability. Notwithstanding anything in this Agreement to the contrary, neither MII or any other member of the MII Group, on the one hand, nor Madison Air or any other member of the Madison Air Group, on the other hand, shall be liable under this Agreement to the other for any indirect, incidental, punitive, consequential, exemplary, remote, speculative or similar damages of the other arising in connection with the transactions contemplated hereby and whether or not informed of the possibility of the existence of such damages (other than any such Liability to the extent actually owed with respect to a Third-Party Claim).
[SIGNATURES ON FOLLOWING PAGES.]
IN WITNESS WHEREOF, the Parties have executed this Agreement the day and year first above written.
MADISON INDUSTRIES HOLDINGS LLC
By:
/s/ Larry Gies
Name:
Larry Gies
Title:
President and Chief Executive Officer
MADISON INDUSTRIES INTERNATIONAL HOLDINGS LLC
By:
/s/ Larry Gies
Name:
Larry Gies
Title:
President and Chief Executive Officer
MADISON INDUSTRIES US HOLDINGS CORP.
By:
/s/ Larry Gies
Name:
Larry Gies
Title:
President
MADISON AIR SOLUTIONS CORPORATION
By:
/s/ Jill Wyant
Name:
Jill Wyant
Title:
President and Chief Executive Officer
EX-10.3
EX-10.3
Filename: ck0002098430-ex10_3.htm · Sequence: 8
EX-10.3
Exhibit 10.3
TAX MATTERS AGREEMENT
DATED AS OF APRIL 15, 2026
BY AND AMONG
MADISON INDUSTRIES INTERNATIONAL HOLDINGS, LLC
AND
MADISON AIR SOLUTIONS CORPORATION
TABLE OF CONTENTS
Page
Section 1. Definition of Terms
1
Section 2. Allocation of Tax Liabilities
10
Section 2.01 General Rule
10
Section 2.02 Allocation of Taxes
10
Section 2.03 Straddle Period Allocation
11
Section 3. Preparation and Filing of Tax Returns
12
Section 3.01 Pre-Distribution Tax Returns
12
Section 3.02 Straddle Period Tax Returns
12
Section 3.03 Election by RemainCo to Prepare Tax Returns
12
Section 3.04 Tax Reporting Practices
13
Section 3.05 Consolidated or Combined Tax Returns
13
Section 3.06 Right to Review Tax Returns
13
Section 3.07 Air PubCo Carrybacks and Claims for Refund
14
Section 3.08 Apportionment of Tax Assets
14
Section 3.09 Amended Tax Returns
15
Section 4. Tax Payments
16
Section 4.01 Payment of Taxes
16
Section 4.02 Indemnification Payments
17
Section 5. Tax Refunds and Transfer Pricing Adjustments
17
Section 5.01 Tax Refunds
17
Section 5.02 Transfer Pricing
18
Section 6. Tax-Free Status
18
Section 6.01 Restrictions on Air PubCo
18
Section 6.02 Restrictions on RemainCo
21
Section 6.03 Procedures Regarding Opinions and Rulings
21
Section 6.04 Liability for Tax-Related Losses
22
Section 7. Assistance and Cooperation
25
Section 7.01 Assistance and Cooperation
25
Section 7.02 Income Tax Return Information
26
Section 7.03 Reliance by RemainCo
26
Section 7.04 Reliance by Air PubCo
26
Section 8. Tax Records
26
Section 8.01 Retention of Tax Records
26
Section 8.02 Access to Tax Records
27
Section 8.03 Preservation of Privilege
27
Section 9. Tax Contests
27
Section 9.01 Notice
27
Section 9.02 Control of Tax Contests
28
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Section 10. Effective Date
29
Section 11. Survival of Obligations
29
Section 12. Tax Treatment of Payments
29
Section 13. Disagreements
30
Section 13.01 Discussion
30
Section 13.02 Escalation
30
Section 13.03 Referral to Tax Advisor
30
Section 13.04 Injunctive Relief
31
Section 14. Expenses
30
Section 15. General Provisions
30
Section 15.01 Addresses and Notices
31
Section 15.02 Binding Effect
32
Section 15.03 Waiver
32
Section 15.04 Severability
32
Section 15.05 Authority
32
Section 15.06 Further Action
32
Section 15.07 Integration
33
Section 15.08 Construction
33
Section 15.09 No Double Recovery
33
Section 15.10 Counterparts
33
Section 15.11 Governing Law
33
Section 15.12 Jurisdiction
34
Section 15.13 Amendment
34
Section 15.14 Air PubCo Subsidiaries
34
Section 15.15 Successors
34
Section 15.16 Injunctions
34
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TAX MATTERS AGREEMENT
This TAX MATTERS AGREEMENT (this “Agreement”) is entered into as of April 15, 2026, by and among Madison Industries International Holdings, LLC, a Delaware limited liability company (“RemainCo”), and Madison Air Solutions Corporation, a Delaware corporation (“Air PubCo”). RemainCo and Air PubCo are collectively referred to herein as the “Parties” and individually referred to herein as a “Party”.
RECITALS
WHEREAS, the Manager has determined that it would be appropriate and desirable to separate completely the Air Business (as defined below) from RemainCo;
WHEREAS, as of the date hereof, RemainCo is the common parent of an affiliated group of corporations, including (among other entities), Madison Industries US Holdings Corporation, a Delaware corporation (“MI US Holdings”), and Madison Industries IAQ Solutions Corporation, a Delaware corporation (“Controlled”), each of which has elected to file RemainCo Federal Consolidated Income Tax Returns;
WHEREAS, as of the date hereof, Madison Industries Holdings, LLC, a Delaware limited liability company (“Parent”), is the sole member of RemainCo and the majority shareholder of Air PubCo;
WHEREAS, the Parties intend for the Internal Distribution and External Distribution (together, the “Distributions”) to be undertaken;
WHEREAS, the Parties intend for the Internal Distribution and the External Distribution to qualify for the Tax-Free Status;
WHEREAS, the Parties intend for the Contribution to be undertaken;
WHEREAS, the Parties intend for the Contribution (along with any contemporaneous contributions of other property to Air PubCo) to be treated as a transaction described in Section 351(a) of the Code; and
WHEREAS, the Parties desire to provide for and agree upon the allocation between the Parties of liabilities, and entitlements to refunds thereof, for certain Taxes arising prior to, at the time of, and subsequent to the Distributions, and to provide for and agree upon other matters relating to Taxes and to set forth certain covenants and indemnities relating to the Tax-Free Status of the Internal Distribution and External Distribution.
NOW THEREFORE, in consideration of the mutual agreements contained herein, the Parties hereby agree as follows:
Section 1. Definition of Terms. For purposes of this Agreement (including the recitals hereof), the following terms have the following meanings, and capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Separation Agreement:
“Active Trade or Business” means, with respect to Air PubCo, the active conduct (as defined in Section 355(b)(2) of the Code and the Treasury Regulations thereunder) of the Air Business as conducted by Controlled immediately prior to the Distributions.
“Adjustment Request” means any formal or informal claim or request filed with any Tax Authority, or with any administrative agency or court, for the adjustment, refund, or credit of Taxes, including (i) any amended Tax Return claiming adjustment to the Taxes as reported on the Tax Return or, if applicable, as previously adjusted, (ii) any claim for equitable recoupment or other offset, and (iii) any claim for refund or credit of Taxes previously paid.
“Affiliate” means, when used with respect to a specified Person, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such specified Person. For purposes of this definition, "control" (including the terms "controlled by" and "under common control with"), when used with respect to any specified Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract or otherwise.
“Agreement” means this Tax Matters Agreement.
“Air Business” means all businesses, operations and activities (whether or not such businesses, operations or activities are or have been terminated, divested or discontinued) conducted at any time prior to the Effective Time (as defined in the Separation Agreement) by Air PubCo or any other member of the Air PubCo Group.
“Air PubCo” has the meaning provided in the first sentence of this Agreement.
“Air PubCo Capital Stock” means all (a) classes or series of capital stock of Air PubCo, including (i) the Air PubCo Common Stock, (ii) all options, warrants and other rights to acquire such capital stock and (iii) all instruments properly treated as stock in Air PubCo for U.S. federal income tax purposes.
“Air PubCo Carryback” means any net operating loss, net capital loss, excess tax credit, or other similar Tax Asset of any member of the Air PubCo Group which may or must be carried from one Tax Period to another prior Tax Period under the Code or other applicable Tax Law.
“Air PubCo Common Stock” means the Class A common stock and Class B common stock of Air PubCo.
“Air PubCo Entity” means an entity which will be a member of the Air PubCo Group immediately after the Contribution.
“Air PubCo Fixed Ratio” means 80%.
“Air PubCo Group” means (i) Air PubCo and its Subsidiaries, as determined immediately after the Contribution, as well as (ii) any entity which (A) was a Subsidiary of RemainCo or a Subsidiary of a member of the Air PubCo Group described in clause (i), (B) conducted solely or predominantly the Air Business, and (C) is no longer a Subsidiary of RemainCo as of the Contribution.
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“Air PubCo Separate Return” means any Tax Return of or including any member of the Air PubCo Group (including any consolidated, combined or unitary return) that does not include any member of the RemainCo Group.
“Amended Tax Return” has the meaning set forth in Section 3.09(b) of this Agreement.
“Ancillary Agreement” has the meaning set forth in the Separation Agreement.
“Board Certificate” has the meaning set forth in Section 6.01(d) of this Agreement.
“Business Purpose Letter” means that certain letter attached as Exhibit E to the Tax Opinion.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Contribution” has the meaning set forth in the Separation Agreement.
“Controlled” has the meaning set forth in the Recitals.
“Controlled Active Trades or Businesses” means, with respect to the Internal Distribution or External Distribution, the active conduct (as defined in Section 355(b)(2) of the Code and the Treasury Regulations thereunder) by Controlled and the Controlled SAG of the trade(s) or business(es) relied upon to satisfy Section 355(b) of the Code with respect to the Internal Distribution and/or the External Distribution (as described in the Tax Materials), as conducted immediately prior to the Distributions.
“Controlled Company” means Controlled.
“Controlled SAG” means, with respect to the Controlled Company, the “separate affiliated group” of the Controlled Company, within the meaning of Section 355(b)(3)(B) of the Code.
“Controlling Party” has the meaning set forth in Section 9.02(d) of this Agreement.
“DGCL” means the Delaware General Corporation Law.
“Dispute” has the meaning set forth in Section 13.01 of this Agreement.
“Distributions” has the meaning set forth in the Recitals.
“Distribution Date” means the date of the Internal Distribution, External Distribution and Contribution.
“Distribution Taxes” means any Taxes attributable to the Internal Distribution or the External Distribution.
“External Distribution” has the meaning set forth in the Separation Agreement.
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“Federal Income Tax” means any Tax imposed by Subtitle A of the Code other than any employment Tax, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
“Fifty-Percent or Greater Interest” has the meaning ascribed to such term for purposes of Sections 355(d) and (e) of the Code.
“Filing Date” has the meaning set forth in Section 6.04(d) of this Agreement.
“Final Determination” shall have the meaning given to the term “determination” by Section 1313 of the Code with respect to U.S. federal Tax matters and with respect to any state, local or non-U.S. Tax matters, means any final settlement with a relevant Tax Authority that does not provide a right to appeal or any final decision by a court with respect to which no timely appeal is pending and as to which the time for filing such appeal has expired.
"Goldman Sachs Indemnification Letter" means that certain letter agreement between Goldman Sachs & Co. LLC and RemainCo, dated as of April 15, 2026, relating to Goldman Sachs & Co. LLC's provision of certain services in connection with the Separation Transactions, including the indemnification provisions set forth in Annex A thereto.
“Group” means the RemainCo Group and/or the Air PubCo Group, as the context requires.
“Indemnitee” has the meaning set forth in Section 4.02(b) of this Agreement.
“Indemnitor” has the meaning set forth in Section 4.02(b) of this Agreement.
“Internal Distribution” has the meaning set forth in the Separation Agreement.
“IRS” means the United States Internal Revenue Service.
“Joint Return” means any Tax Return that actually includes, by election or otherwise, one or more members of more than one of the RemainCo Group and the Air PubCo Group.
“Law” has the meaning set forth in the Separation Agreement.
“MI US Holdings” has the meaning set forth in the Recitals.
“Majority Party” has the meaning set forth in Section 3.06(a) of this Agreement.
“Minority Party” has the meaning set forth in Section 3.09(b) of this Agreement.
“Non-Controlling Party” has the meaning set forth in Section 9.02(d) of this Agreement.
“Notified Action” has the meaning set forth in Section 6.03(a) of this Agreement.
“Past Practices” has the meaning set forth in Section 3.04(b) of this Agreement.
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“Payment Date” means (i) with respect to any RemainCo Federal Consolidated Income Tax Return, (A) the due date for any required installment of estimated taxes determined under Section 6655 of the Code, (B) the due date (determined without regard to extensions) for filing the return determined under Section 6072 of the Code, or (C) the date the return is filed, as the case may be, and (ii) with respect to any other Tax Return, the corresponding dates determined under the applicable Tax Law.
“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof, without regard to whether any entity is treated as disregarded for U.S. federal income tax purposes.
“Post-Distribution Period” means any Tax Period beginning after the Distribution Date and, in the case of any Straddle Period, the portion of such Straddle Period beginning on the day after the Distribution Date.
“Pre-Distribution Period” means any Tax Period ending on or before the Distribution Date and, in the case of any Straddle Period, the portion of such Straddle Period ending on the Distribution Date.
“Pre-Distribution Period Taxes” means any and all Taxes of the Parties and their Subsidiaries (as determined immediately prior to the Distributions) for any Tax Period ending on or before the Distribution Date.
“Pre-Distribution Tax Returns” has the meaning set forth in Section 3.01 of this Agreement.
“Preliminary Tax Advisor” has the meaning set forth in Section 13.03 of this Agreement.
“Preparing Party” means, with respect to any Tax Return, the Party having the right to prepare such Tax Return as determined under Section 3 of this Agreement.
“Privilege” means any privilege that may be asserted under applicable Law, including, any privilege arising under or relating to the attorney-client relationship (including the attorney-client and work product privileges), the accountant-client privilege and any privilege relating to internal evaluation processes.
“Proposed Acquisition Transaction” means, with respect to Air PubCo, a transaction or series of transactions (or any agreement, understanding or arrangement, within the meaning of Section 355(e) of the Code and Treasury Regulation Section 1.355-7, or any other regulations promulgated thereunder, to enter into a transaction or series of transactions), whether such transaction is supported by Air PubCo’s management or shareholders, is a hostile acquisition, or otherwise, as a result of which Air PubCo would merge or consolidate with any other Person or as a result of which any Person or any group of related Persons would (directly or indirectly) acquire, or have the right to acquire, from Air PubCo, one or more holders of outstanding shares of Air PubCo Capital Stock, a number of shares of such Air PubCo Capital Stock that would, when combined with any other changes in ownership of Air PubCo Capital Stock pertinent for purposes of Section 355(e) of the Code, comprise 40% or more of (i) the value of all outstanding shares of
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stock of Air PubCo, as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series, or (ii) the total combined voting power of all outstanding shares of voting stock of Air PubCo as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series; provided, however, that the Parties acknowledge and agree that, for all purposes of this Agreement, as of the date hereof, the pertinent percentage for purposes of Section 355(e) of the Code with respect to Air PubCo is 40%. Notwithstanding the foregoing, a Proposed Acquisition Transaction shall not include (i) the adoption by Air PubCo of a shareholder rights plan or (ii) issuances by Air PubCo that satisfy Safe Harbor VIII (relating to acquisitions in connection with a person’s performance of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355‑7(d). For purposes of determining whether a transaction constitutes an indirect acquisition, any recapitalization resulting in a shift of voting power or any redemption of shares of stock shall be treated as an indirect acquisition of shares of stock by the non-exchanging shareholders. This definition and the application thereof is intended to monitor compliance with Section 355(e) of the Code and shall be interpreted accordingly. Any clarification of, or change in, the statute or regulations promulgated under Section 355(e) of the Code shall be incorporated in this definition and its interpretation.
“RemainCo” has the meaning provided in the first sentence of this Agreement.
“RemainCo Affiliated Group” means the affiliated group (as that term is defined in Section 1504 of the Code and the regulations thereunder) of which RemainCo is the common parent.
“RemainCo Federal Consolidated Income Tax Return” means any United States Federal Income Tax Return for the RemainCo Affiliated Group.
“RemainCo Fixed Ratio” means 20%.
“RemainCo Group” means RemainCo and its Subsidiaries, excluding any entity that is a member of the Air PubCo Group, as determined immediately after the External Distribution.
“RemainCo Business” means all businesses, operations and activities (whether or not such businesses, operations or activities are or have been terminated, divested or discontinued) conducted at any time prior to the Effective Time (as defined in the Separation Agreement) by RemainCo or any other member of the RemainCo Group.
“RemainCo Separate Return” means any Tax Return of or including any member of the RemainCo Group (including any consolidated, combined or unitary return) that does not include any member of the Air PubCo Group.
“Representation Letters” means the statements of facts and representations, officer’s certificates, representation letters and any other materials delivered or deliverable by RemainCo, its Affiliates or representatives thereof in connection with the rendering by Tax Advisors, and/or the issuance by the IRS or other Tax Authority, of the Tax Opinions/Rulings.
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“Required Party” means the Party required under applicable Tax Law to pay to a Tax Authority the Taxes required to be paid with respect to a given Tax Return.
“Retention Date” has the meaning set forth in Section 8.01 of this Agreement.
“Reviewing Party” has the meaning set forth in Section 3.06(a) of this Agreement.
“Ruling” means any private letter ruling issued by the IRS to RemainCo in connection with the Separation Transactions.
“Ruling Request” means any filing by RemainCo with the IRS or other Tax Authority requesting a ruling regarding certain Tax consequences of the Separation Transactions (including all attachments, exhibits, and other materials submitted with such letter) and any amendment or supplement to such letter.
“Section 336(e) Election” has the meaning set forth in Section 6.04(e) of this Agreement.
“Section 6.01(d) Acquisition Transaction” means any transaction or series of transactions that is not a Proposed Acquisition Transaction but would be a Proposed Acquisition Transaction if the percentage reflected in the definition of Proposed Acquisition Transaction were twenty-five percent (25%) instead of forty percent (40%).
“Separate Return” means a RemainCo Separate Return and/or an Air PubCo Separate Return, as the context requires.
“Separation Agreement” means the Separation Agreement, as amended from time to time, by and among RemainCo, Parent and Air PubCo dated as of April 15, 2026.
“Separation Transactions” means those transactions undertaken by the Parties and their Affiliates pursuant to the Separation Agreement to separate ownership of the Air Business from ownership of the RemainCo Business.
“Straddle Period” means any Tax Period that begins on or before and ends after the Distribution Date.
“Straddle Period Tax Return” has the meaning set forth in Section 3.02 of this Agreement.
“Straddle Period Taxes” means any and all Taxes of the Parties and their Subsidiaries (as determined immediately prior to the Distributions) for any Straddle Period.
“Subsidiary” shall mean with respect to any Person (a) a corporation, fifty percent (50%) or more of the voting or capital stock of which is, as of the time in question, directly or indirectly owned by such Person, and (b) any other partnership, joint venture, association, joint stock company, trust, unincorporated organization or other entity in which such Person, directly or indirectly, owns fifty percent (50%) or more of the equity or economic interest thereof or has the power to elect or direct the election of fifty percent (50%) or more of the members of the governing body of such entity or otherwise has control over such entity (e.g., as the managing partner of a partnership).
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“Tax” or “Taxes” means any income, gross income, gross receipts, profits, capital stock, franchise, withholding, payroll, social security, workers compensation, unemployment, disability, property, ad valorem, value added, stamp, excise, severance, occupation, service, sales, use, license, lease, transfer, import, export, escheat, alternative minimum, estimated or other tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax), imposed by any governmental entity or political subdivision thereof, and any interest, penalty, additions to tax, or additional amounts in respect of the foregoing.
“Tax Advisor” means a tax counsel or accountant, in each case of recognized national standing.
“Tax Assets” means a net operating loss, net capital loss, unused investment credit, unused foreign tax credit, tax credit carryover, previously taxed income, excess charitable contribution, general business credit, research and development credit, earnings and profits, Tax basis, or any other losses, deductions, credits or Tax Items that could reduce a Tax liability or create a Tax Benefit.
“Tax Authority” means, with respect to any Tax, the governmental entity or political subdivision thereof that imposes such Tax, and the agency (if any) charged with the collection of such Tax for such entity or subdivision.
“Tax Benefit” means any refund, credit, or other reduction in an otherwise required liability for Taxes.
“Tax Contest” means an audit, review, examination, or any other administrative or judicial proceeding with the purpose or effect of redetermining Taxes (including any administrative or judicial review of any claim for refund).
“Tax-Free Status” means the qualification of each of the Internal Distribution and the External Distribution, (i) as a distribution described in Sections 355(a), (ii) as a transaction in which the stock distributed thereby is “qualified property” for purposes of Sections 355(c), 355(d) and 355(e) of the Code and (iii) as a transaction in which Parent, RemainCo and MI US Holdings recognize no income or gain for U.S. federal income tax purposes pursuant to Sections 355(a) and (c), other than, in the case of RemainCo and MI US Holdings, intercompany items taken into account pursuant to the Treasury Regulations promulgated pursuant to Section 1502 of the Code.
“Tax Item” means, with respect to any income Tax, any item of income, gain, loss, deduction, or credit.
“Tax Materials” means (a) the Tax Opinions/Rulings, (b) Representation Letters and (c) the Business Purpose Letter.
“Tax Opinions/Rulings” means the opinions of Tax Advisors and/or the rulings by the IRS or other Tax Authorities deliverable to RemainCo in connection with the Distributions or otherwise with respect to the Separation Transactions.
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“Tax Period” means, with respect to any Tax, the period for which the Tax is reported as provided under the Code or other applicable Tax Law.
“Tax Records” means any (i) Tax Returns, (ii) Tax Return workpapers, (iii) documentation relating to any Tax Contests, and (iv) any other books of account or records (whether or not in written, electronic or other tangible or intangible forms and whether or not stored on electronic or any other medium) required to be maintained under the Code or other applicable Tax Laws or under any record retention agreement with any Tax Authority, in each case filed with respect to or otherwise relating to Taxes.
“Tax-Related Losses” means (i) all Taxes (including interest and penalties thereon) imposed pursuant to any settlement, Final Determination, judgment or otherwise; (ii) all accounting, legal and other professional fees, and court costs incurred in connection with such Taxes, as well as any other out-of-pocket costs incurred in connection with such Taxes; and (iii) all costs, expenses and damages associated with stockholder litigation or controversies and any amount paid by RemainCo, Air PubCo or any of their Affiliates in respect of the liability of shareholders, whether paid to shareholders or to the IRS or any other Tax Authority, in each case, resulting from the failure of the Internal Distribution and/or the External Distribution to qualify for the Tax-Free Status or from the failure of a Separation Transaction to have the tax treatment described in the Tax Opinions/Rulings.
“Tax Return” means any report of Taxes due, any claim for refund of Taxes paid, any information return with respect to Taxes, or any other similar report, statement, declaration, or document required to be filed under the Code or other Tax Law with respect to Taxes, including any attachments, exhibits, or other materials submitted with any of the foregoing, and including any amendments or supplements to any of the foregoing.
“Transfer Pricing Adjustment” means any proposed or actual allocation by a Tax Authority of any Tax Item between or among any member of the RemainCo Group and any member of the Air PubCo Group with respect to any Tax Period ending prior to or on the Distribution Date or the portion of any Straddle Period ending on the Distribution Date.
“Treasury Regulations” means the regulations promulgated from time to time under the Code as in effect for the relevant Tax Period.
“Unqualified Tax Opinion” means an unqualified “will” opinion of a Tax Advisor, which Tax Advisor is acceptable to RemainCo, on which RemainCo may rely to the effect that a transaction will not affect the Tax-Free Status. Any such opinion must assume that the Internal Distribution and the External Distribution would have qualified for the Tax-Free Status or that such other Separation Transaction would have qualified for such wholly or partially tax-free or tax-deferred treatment, as applicable, if the transaction in question did not occur.
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Section 2. Allocation of Tax Liabilities.
Section 2.01 General Rule.
(a) RemainCo Liability. RemainCo shall be liable for, and shall indemnify and hold harmless the Air PubCo Group from and against any liability for, without duplication:
(i) Taxes which are allocated to RemainCo pursuant to Sections 2.02(a)(iv)-(vi); and
(ii) to the extent not also described in Sections 2.02(b)(iv)-(vi), Taxes which are allocated to RemainCo pursuant to Sections 2.02(a)(i)-(iii).
(b) Air PubCo Liability. Air PubCo shall be liable for, and shall indemnify and hold harmless the RemainCo Group from and against any liability for, without duplication:
(i) Taxes which are allocated to Air PubCo pursuant to Sections 2.02(b)(iv)-(vi); and
(ii) to the extent not also described in Sections 2.02(a)(iv)-(vi), Taxes which are allocated to Air PubCo pursuant to Sections 2.02(b)(i)-(iii).
Section 2.02 Allocation of Taxes. Except as set forth in Section 6.04, any and all Taxes shall be allocated as follows:
(a) RemainCo Tax Liability. RemainCo shall be allocated the following, without duplication:
(i) Pre-Distribution Period Taxes and Distribution Taxes that can reasonably be identified by RemainCo as relating to a specific member or specific members of the RemainCo Group;
(ii) the RemainCo Fixed Ratio of any and all Pre-Distribution Period Taxes other than Pre-Distribution Period Taxes described in Sections 2.02(a)(i) and (b)(i);
(iii) Straddle Period Taxes allocated to a Pre-Distribution Period that can reasonably be identified by RemainCo as relating to a specific member or specific members of the RemainCo Group;
(iv) the RemainCo Fixed Ratio of any and all Straddle Period Taxes allocated to a Pre-Distribution Period other than any such Straddle Period Taxes described in Sections 2.02(a)(ii) and (b)(ii);
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(v) the RemainCo Fixed Ratio of any and all Distribution Taxes other than Distribution Taxes described in Section 2.02(a)(i) and any Tax-Related Losses for which RemainCo is responsible pursuant to Section 6.04;
(vi) Tax-Related Losses for which RemainCo is responsible pursuant to Section 6.04 of this Agreement; and
(vii) Taxes resulting from any breach by RemainCo of any covenant in this Agreement, the Separation Agreement or any Ancillary Agreement.
(b) Air PubCo Tax Liability. Air PubCo shall be allocated the following:
(i) Pre-Distribution Period Taxes and Distribution Taxes that can reasonably be identified by RemainCo as relating to a specific member or specific members of the Air PubCo Group;
(ii) the Air PubCo Fixed Ratio of any and all Pre-Distribution Period Taxes other than Pre-Distribution Period Taxes described in Sections 2.02(b)(i) and (a)(i);
(iii) Straddle Period Taxes allocated to a Pre-Distribution Period that can reasonably be identified by RemainCo as relating to a specific member or specific members of the Air PubCo Group;
(iv) the Air PubCo Fixed Ratio of any and all Straddle Period Taxes allocated to a Pre-Distribution Period other than any such Straddle Period Taxes described in Sections 2.02(b)(ii) and (a)(ii);
(v) the Air PubCo Fixed Ratio of any and all Distribution Taxes other than Distribution Taxes described in Section 2.02(b)(i) and any Tax-Related Losses for which Air PubCo is responsible pursuant to Section 6.04;
(vi) Tax-Related Losses for which Air PubCo is responsible pursuant to Section 6.04 of this Agreement; and
(vii) Taxes resulting from any breach by Air PubCo of any covenant in this Agreement, the Separation Agreement or any Ancillary Agreement.
Section 2.03 Straddle Period Allocation. For purposes of this Agreement, if the Distributions occur during a Straddle Period, Taxes for the entire Tax Period (including, for example, Subpart F income under Section 951 of the Code) shall be allocated, on the one hand, to the portion of the Tax Period ending on the end of the Distribution Date, and on the other hand, to the portion of the Tax Period beginning on the day after the Distribution Date, on a “closing of the books” method as of the end of the Distribution Date, assuming that the taxable year of the relevant entity, and its Subsidiaries, ended for all applicable Tax purposes as of the end of the Distribution Date; provided that property Taxes and other similar periodic Taxes that are calculated on an annual or periodic basis shall be allocated between such portions in proportion to the number of days in each such portion and, for these purposes, a taxable year shall be deemed to consist of
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twelve (12) months and each such month shall be deemed to consist of thirty (30) days. For the avoidance of doubt, the “closing of the books” method shall deem any Tax Period beginning before but ending after an applicable date to end on the applicable date; provided further, that, to the extent the Distribution Date is not the last day of a month, then, solely for purposes of this Section 2.03, “Distribution Date” shall be the last day of the month nearest to the date of the Distributions. For purposes of allocating foreign tax credits between the portion of any Straddle Period ending on the Distribution Date, on one hand, and the portion of any Straddle Period beginning on the day after the Distribution Date, on the other hand, to the extent such foreign tax credits are actually allocated under applicable Law (including the Treasury Regulations under Section 1502 of the Code) to the period ending on the Distribution Date, such foreign tax credits shall be allocated to the Tax Period ending on the Distribution Date for purposes of the “closing of the books” method described herein. Subject to, and except as provided in the preceding sentence, foreign tax credits for any Straddle Period shall be allocated to the portion of such period in which the transaction giving rise to the related foreign taxes occurred.
Section 3. Preparation and Filing of Tax Returns.
Section 3.01 Pre-Distribution Tax Returns. Subject to Section 3.03, following the Distributions, the Party responsible (or whose Subsidiary is responsible) under applicable Law for filing any Tax Return required to be filed by the Parties or their Subsidiaries for any Tax Period ending on or prior to the Distribution Date (a “Pre-Distribution Tax Return”) shall prepare and file, or cause to be prepared and filed, such Pre-Distribution Tax Return.
Section 3.02 Straddle Period Tax Returns. Subject to Section 3.03, following the Distributions, the Party responsible (or whose Subsidiary is responsible) under applicable Law for filing any Tax Return required to be filed by the Parties or their Subsidiaries for any Straddle Period (a “Straddle Period Tax Return”) shall prepare and file, or cause to be prepared and filed, such Straddle Period Tax Return.
Section 3.03 Election by RemainCo to Prepare Tax Returns. In the case of any Pre-Distribution Tax Return or Straddle Period Tax Return for which RemainCo is not the Party responsible for preparing such Tax Return, as determined under Section 3.01 or Section 3.02, as applicable, RemainCo may elect (in its sole discretion) to prepare such Tax Return; provided that, for such election to be valid, RemainCo shall provide Air PubCo with written notice of such election prior to the later of (i) January 31, 2027 or (ii) December 31 of the calendar year in which the Tax Period to which such Tax Return relates ends (or, if the Tax Return is due prior to such date, RemainCo shall provide notice to Air PubCo within five (5) business days of the end of the Tax Period to which such Tax Returns relates). If RemainCo makes a valid election pursuant to the foregoing sentence, RemainCo will be the Preparing Party and Air PubCo will be the Reviewing Party, in each case, with respect to the applicable Tax Return for purposes of Section 3.06.
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Section 3.04 Tax Reporting Practices.
(a) RemainCo General Rule. Except as provided in Section 3.04(c), RemainCo shall prepare any Tax Return with respect to which it is the Preparing Party under Section 3.01 or Section 3.02 in accordance with reasonable Tax accounting practices selected by RemainCo.
(b) Air PubCo General Rule. Except as provided in Section 3.04(c), Air PubCo shall prepare any Tax Return with respect to which it is the Preparing Party under Section 3.01 or Section 3.02, in accordance with past practices, accounting methods, elections or conventions (“Past Practices”) used with respect to such Tax Returns in question, and to the extent any items are not covered by Past Practices, in accordance with reasonable Tax accounting practices selected by Air PubCo.
(c) Reporting of Separation Transactions. The Tax treatment of the Separation Transactions reported on any Tax Return shall be consistent with the treatment thereof in the Tax Opinions/Rulings, taking into account the jurisdiction in which such Tax Returns are filed. The Tax treatment, including purchase price allocations, where relevant, of any Separation Transaction reported on any Tax Return for which Air PubCo is the Preparing Party shall be consistent with that on any Tax Return filed or to be filed by RemainCo or any member of the RemainCo Group or caused or to be caused to be filed by RemainCo. At the request of Air PubCo, RemainCo shall reasonably cooperate in good faith to timely provide to Air PubCo such information, including anticipated filing positions, necessary to permit Air PubCo to comply with the preceding sentence.
Section 3.05 Consolidated or Combined Tax Returns. Air PubCo will elect and join, and will cause its respective Subsidiaries to elect and join, in filing any Joint Returns that RemainCo determines are required to be filed or that RemainCo elects to file.
Section 3.06 Right to Review Tax Returns.
(a) General. The Preparing Party with respect to any material Tax Return shall make the portion of such Tax Return and related workpapers which are relevant to the determination of the other Party’s rights or obligations under this Agreement available for review by such other Party at its request (the “Reviewing Party”), to the extent (i) such Tax Return relates to Taxes for which the Reviewing Party would reasonably be expected to be liable, (ii) such Tax Return relates to Taxes for which the Reviewing Party would reasonably be expected to be liable in whole or in part for any additional Taxes owing as a result of adjustments to the amount of such Taxes reported on such Tax Return, (iii) such Tax Return relates to Taxes for which the Reviewing Party would reasonably be expected to have a claim for Tax Benefits under this Agreement, or (iv) the Reviewing Party reasonably determines that it must inspect such Tax Return to confirm compliance with the terms of this Agreement. The Preparing Party shall (A) make such portion of such Tax Return available for review and comment as required under this paragraph at least twenty-one (21) days in advance of the initial due date (taking into account applicable extensions) for filing of such Tax Return and (B) consider any such comments that are timely received and which are reasonable before filing such Tax Return, taking into account the Person(s)
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responsible for payment of the Tax (if any) reported on such Tax Return and whether the position taken in the such comments is supportable by a “more likely than not” or higher of level of confidence, or is inconsistent with the requirements of Section 3.04. The Parties shall attempt in good faith to resolve any issues arising out of the review of such Tax Return. If any disagreement with respect to such Tax Return is not resolved following a good faith attempt by the Parties to resolve such disagreement, the position of the Party bearing the greatest liability for Taxes reflected on such Tax Return, determined pursuant to Section 2.02 (the “Majority Party”), shall prevail, except to the extent such position is not supportable by a “more likely than not” or higher level of confidence, or is inconsistent with the requirements of Section 3.04.
(b) Material Tax Returns. For purposes of Section 3.06(a), a Tax Return is “material” if it (i) could reasonably be expected to reflect (A) a Tax liability equal to or in excess of $900,000, (B) a credit or credits equal to or in excess of $900,000, (C) a loss or losses equal to or in excess of $3,000,000, in each case with respect to the Reviewing Party or (ii) with respect to a Pre-Distribution Tax Return or Straddle Period Tax Return, is not described in clause (i) and is reasonably requested for review by the Party that is not the Preparing Party.
Section 3.07 Air PubCo Carrybacks and Claims for Refund. Air PubCo hereby agrees that (i) unless RemainCo consents in writing (such consent not to be unreasonably withheld, conditioned or delayed), no Adjustment Request with respect to any Tax Return for a Pre-Distribution Period or Straddle Period shall be filed, and (ii) Air PubCo shall make or not make any available elections to waive the right to claim in any Pre-Distribution Period or Straddle Period with respect to any Tax Return any Air PubCo Carryback arising in a Post-Distribution Period at the direction of RemainCo (in RemainCo’s sole discretion), and (iii) unless RemainCo consents in writing (such consent not to be unreasonably withheld, conditioned or delayed), no affirmative election (which, for the avoidance of doubt, shall not include any election required by applicable Law) shall be made to claim any such Air PubCo Carryback. In the event that Air PubCo is required under applicable Tax Law to claim any Air PubCo Carryback with respect to a Pre-Distribution Period or Straddle Period, Air PubCo shall provide notice of such Air PubCo Carryback to RemainCo at least fifteen (15) business days prior to claiming such Air PubCo Carryback.
Section 3.08 Apportionment of Tax Assets. RemainCo may in good faith advise Air PubCo in writing of the amount, if any, of any Tax Assets, which RemainCo determines, in its sole and absolute discretion, shall be allocated or apportioned to the Air PubCo Group, under applicable Law or may provide Air PubCo relevant information for making such determination on an as-is basis; provided that this Section 3.08 shall not be construed as obligating RemainCo to undertake any such determination or provide any such information. For the avoidance of doubt, RemainCo makes no representation or warranty as to the accuracy or completeness of any such determination or information. Air PubCo and all members of the Air PubCo Group shall prepare all Tax Returns in accordance with any such determination. Air PubCo agrees that it shall not dispute RemainCo’s allocation or apportionment of Tax Assets. Air PubCo may request that RemainCo undertake a determination of the portion, if any, of any particular Tax Assets to be allocated or apportioned to the Air PubCo Group under applicable Law; provided that to the extent that RemainCo determines, in its sole and absolute discretion, not to undertake such determination, or does not otherwise
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advise Air PubCo of its intention to undertake such determination within twenty (20) business days of the receipt of such request, Air PubCo shall be permitted to undertake such determination at its own cost and expense and shall notify RemainCo of its determination, which determination shall not be binding upon RemainCo. Notwithstanding anything to the contrary contained herein, for the avoidance of doubt, RemainCo shall bear no liability to Air PubCo for any determinations made by RemainCo pursuant to this Section 3.08 if any such determination shall be found or asserted to be inaccurate.
Section 3.09 Amended Tax Returns.
(a) Except as otherwise required by applicable Tax Law or provided in this Section 3.09, none of the Parties nor any of their Subsidiaries shall file any amended Tax Return for any Pre-Distribution Period or Straddle Period.
(b) With respect to any Tax Return for a Pre-Distribution Period or Straddle Period, the Majority Party (determined prior to the amendment of such Tax Return) may file an amendment to such Tax Return (an “Amended Tax Return”); provided that to the extent the other Party has any liability for Taxes on such Amended Tax Returns (the “Minority Party”), the Majority Party must (i) provide notice of its intent to file such Amended Tax Return to the Minority Party at least ten (10) business days prior to the filing of any such Amended Tax Return, (ii) reasonably cooperate and consult with the Minority Party to consider the Tax implications of filing such Amended Tax Return and (iii) indemnify the Minority Party to the extent the filing of any such Amended Tax Return could reasonably be expected to increase (by an amount equal to or in excess of $900,000) the Minority Party’s (A) indemnification obligations under this Agreement or (B) liability for Taxes in any Post-Distribution Period; provided, further, that in no event shall the Majority Party be required to obtain the consent of the Minority Party prior to the filing of any Amended Tax Return pursuant to this Section 3.09(b). Notwithstanding the foregoing, the Parties shall discuss in good faith whether a particular Amended Tax Return may be required to be filed or may be in the mutual best interests of the Parties to be filed, and if the Parties so determine (by way of mutual agreement of each Party’s Vice President of Tax (or other similar corporate executive)), after discussing in good faith, then the Majority Party shall not be required to indemnify the Minority Party in the manner set forth in the preceding sentence. To the extent the Minority Party is the Party responsible under applicable Law for the filing of a relevant Amended Tax Return, the Minority Party shall cooperate and file any Amended Tax Return requested by the Majority Party consistent with this Section 3.09(b).
(c) The Minority Party may file an Amended Tax Return only with the prior written consent of the Majority Party (such consent not to be unreasonably withheld, conditioned or delayed); provided that the Minority Party must first (i) provide written notice of its intent to file such Amended Tax Return to the Majority Party at least ten (10) business days prior to the filing of any such Amended Tax Return, (ii) reasonably cooperate and consult with the Majority Party to consider the Tax implications of filing such Amended Tax Return and (iii) indemnify the Majority Party to the extent the filing of any such Amended Tax Return could reasonably be expected to materially increase the Majority Party’s (A) indemnification obligations under this Agreement or (B) liability for Taxes in any Post-Distribution Period.
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Section 4. Tax Payments.
Section 4.01 Payment of Taxes.
(a) Computation and Payment of Tax Due With Respect to Joint Returns. In the case of any Joint Return, at least fifteen (15) business days prior to any Payment Date for any such Tax Return, the Preparing Party shall compute the amount of Taxes required to be paid to the applicable Tax Authority (taking into account the requirements of Section 3.04 relating to consistent accounting practices, as applicable) with respect to such Tax Return and, to the extent the other Party is liable for any amount of Taxes with respect to such Tax Return, as determined in accordance with the provisions of Section 2 (taking into account any payments previously made by each Party with respect to such Tax Return and the total Tax liability reflected on such Tax Return), the Preparing Party shall provide such other Party a written statement setting forth the Taxes for which such other Party is liable and the basis for its computation in reasonable detail. Absent manifest error in such computation, as soon as reasonably practicable upon receipt of such written statement (but in any event no later than the Payment Date), the Party that is not the Required Party shall pay to the Required Party the amount of such Taxes for which such first Party is liable pursuant to the preceding sentence. The Required Party shall pay to the applicable Tax Authority on or before such Payment Date the amount of Taxes required to be paid with respect to any Joint Return (and provide written notice and proof of payment to the other Party).
(b) Computation and Payment of Tax Due With Respect to Separate Returns. In the case of any Separate Return, at least fifteen (15) business days prior to any Payment Date for any such Tax Return, the Preparing Party shall compute the amount of Taxes required to be paid to the applicable Tax Authority (taking into account the requirements of Section 3.04 relating to consistent accounting practices, as applicable) with respect to such Tax Return and, to the extent the other Party is liable for any amount of Taxes with respect to such Tax Return, as determined in accordance with the provisions of Section 2, the Preparing Party shall provide such other Party a written statement setting forth the Taxes for which such other Party is liable and the basis for its computation in reasonable detail. Absent manifest error in such computation, as soon as reasonably practicable upon receipt of such written statement (but in any event no later than the Payment Date) the Party that is not the Required Party shall pay to the Required Party the amount of such Taxes for which such first Party is liable pursuant to the preceding sentence. The Required Party shall pay to the applicable Tax Authority on or before such Payment Date the amount of Taxes required to be paid with respect to any Separate Return (and provide notice and proof of payment to the other Party).
(c) Adjustments. In the case of any adjustment or payment pursuant to either, (i) a Final Determination or (ii) the Controlling Party determining in good faith to pay amounts asserted by a Tax Authority in connection with a Tax Contest while continuing to appeal or otherwise contest such Tax Contest, in either case, with respect to any Tax Return described in Section 4.01(a) or Section 4.01(b), the Required Party shall pay to the applicable Tax Authority when due any additional Tax due with respect to such Tax Return required to be paid as a result of such adjustment pursuant to a Final Determination or good
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faith determination to pay. In a manner consistent with the principles set forth in Section 4.01(a) and Section 4.01(b), the Preparing Party shall compute the amount attributable to the other Party in accordance with Section 2 and provide such other Party a written statement setting forth the Taxes for which such other Party is liable and the basis for its computation in reasonable detail, and the Party that is not the Required Party shall pay to the Required Party the amount allocable to such first Party as soon as reasonably practicable upon receipt of such written statement (but in any event no later than the Payment Date).
Section 4.02 Indemnification Payments.
(a) If a Party is required to make a payment to the other Party pursuant to this Agreement (other than pursuant to Section 4.01(a), Section 4.01(b), Section 6.03 or Section 6.04(d)), the Party required to make such payment under this Agreement shall pay the amount for which it is responsible (a “TMA Liability”) to the other Party at the time or times provided in the next two sentences. No later than forty-five (45) days following the close of the applicable calendar year, any TMA Liabilities which arose during the previous calendar year and are owed and not yet paid, to Air PubCo by RemainCo shall be netted with any such TMA Liabilities owed and not yet paid to RemainCo by Air PubCo, and if either Party has a net TMA Liability remaining after such netting (a “Net TMA Liability”), the Party owing such Net TMA Liability shall pay such Net TMA Liability to the other Party. Notwithstanding the foregoing, if at any point during a calendar year, the Net TMA Liability, calculated at such time, owed to any Party exceeds one million dollars ($1,000,000.00), the Party owing such Net TMA Liability shall pay such amount to the other Party within forty-five (45) business days of receipt of a written demand for payment from the other Party. For the avoidance of doubt, the provisions of this Section 4.02(a) shall not apply to the Parties’ obligations pursuant to Section 4.01(a), Section 4.01(b), Section 6.03 and Section 6.04(d), and no amount owing pursuant to such provisions shall be included in any TMA Liability or Net TMA Liability.
(b) All payments between the two Parties under this Agreement shall be made by the Party having the obligation to make such payment (the “Indemnitor”) directly to the Party entitled to receive such payment (the “Indemnitee”); provided, however, that if the Indemnitor and the Indemnitee mutually agree with respect to any such payment, any member of the Indemnitor’s Group, on the one hand, may make such payment to any member of the Indemnitee’s Group, on the other hand, and vice versa. All payments between the two Parties shall be treated in the manner described in Section 12, unless otherwise agreed by the Parties.
Section 5. Tax Refunds and Transfer Pricing Adjustments.
Section 5.01 Tax Refunds. RemainCo shall be entitled to any refund (including any application of such refund to reduce liability for Taxes by means of a credit, offset or otherwise) of Taxes (and any interest thereon received from the applicable Tax Authority) for which RemainCo is liable hereunder and Air PubCo shall be entitled (subject to the limitations provided in Section 3.07) to any refund (including any application of such refund to reduce liability for Taxes by means of a credit, offset or otherwise) of Taxes (and any interest thereon received from
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the applicable Tax Authority) for which Air PubCo is liable hereunder. A Party receiving a refund (including by application of a refund to reduce liability for Taxes by means of a credit, offset or otherwise) to which the other Party is entitled hereunder shall pay over such refund to such other Party in accordance with the provisions of Section 4.02(a).
Section 5.02 Transfer Pricing.
(a) If pursuant to a Final Determination any Transfer Pricing Adjustment is made which results in (i) a Tax for which RemainCo is liable hereunder and (ii) a Tax Benefit allowable to a member of the Air PubCo Group, Air PubCo shall make payment to RemainCo, in accordance with Section 4.02(a), if such Tax Benefit results in cash Tax savings or a refund (including any application of such refund to reduce liability for Taxes by means of a credit, offset or otherwise), calculated on a “with and without” basis (taking into account any Taxes imposed on any member of the Air PubCo Group in connection with the realization of such Tax Benefit and the repatriation of the corresponding cash to Air PubCo), in an amount equal to the portion of such cash Tax savings or such refund which arises from or is attributable to the portion of such Tax for which RemainCo is liable pursuant to this Agreement.
(b) If pursuant to a Final Determination any Transfer Pricing Adjustment is made which results in (i) a Tax for which Air PubCo is liable hereunder and (ii) a Tax Benefit allowable to a member of the RemainCo Group, RemainCo shall make payment to Air PubCo, in accordance with Section 4.02(a), if such Tax Benefit results in cash Tax savings or a refund (including any application of such refund to reduce liability for Taxes by means of a credit, offset or otherwise), calculated on a “with and without” basis (taking into account any Taxes imposed on any member of the RemainCo Group in connection with the realization of such Tax Benefit and the repatriation of the corresponding cash to RemainCo), in an amount equal to the portion of such cash Tax savings or such refund which arises from or is attributable to the portion of such Tax for which Air PubCo is liable pursuant to this Agreement (net of any applicable withholding Taxes imposed with respect to any such payment made pursuant to this Section 5.02).
Section 6. Tax-Free Status.
Section 6.01 Restrictions on Air PubCo.
(a) Air PubCo agrees that it will not take or fail to take, or permit any of its Subsidiaries, as the case may be, to take or fail to take, any action where such action or failure to act would be inconsistent with or cause to be untrue any statement, information, covenant or representation in any Representation Letters or Tax Opinions/Rulings. Air PubCo agrees that it will not take or fail to take, or permit any of its Subsidiaries, as the case may be, to take or fail to take, any action which adversely affects or could reasonably be expected to adversely affect the Tax-Free Status of the Distributions.
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(b) Air PubCo agrees that, from the date hereof until the first business day after the two-year anniversary of the Distribution Date, it will (and will cause Controlled and each Controlled SAG to) (i) maintain the active conduct of (as defined in Section 355(b)(2) of the Code and the Treasury Regulations thereunder) the Controlled Active Trade or Businesses for purposes of Section 355(b)(2) of the Code, (ii) not engage in any transaction that would result in Controlled ceasing to be a company engaged in the active conduct of the Controlled Active Trade or Business for purposes of Section 355(b)(2) of the Code, (iii) cause each of its Subsidiaries whose Active Trade or Business is relied upon in the Tax Opinions/Rulings for purposes of qualifying a transaction as tax-free pursuant to Section 355 of the Code or other Tax Law to maintain its status as a company engaged in such Active Trade or Business for purposes of Section 355(b)(2) of the Code and any such other applicable Tax Law, (iv) not engage in any transaction or permit any of its Subsidiaries to engage in any transaction that would result in any of its Subsidiaries described in clause (iii) hereof ceasing to be a company engaged in the relevant Active Trade or Business for purposes of Section 355(b)(2) or such other applicable Tax Law, taking into account Section 355(b)(3) of the Code for purposes of clauses (i) through (iv) hereof, and (v) not dispose of or permit any of its Subsidiaries to dispose of, directly or indirectly, any interest in any of its Subsidiaries described in clause (iii) hereof or permit any such Subsidiary to make or revoke any election under Treasury Regulation Section 301.7701-3.
(c) Air PubCo agrees that, from the date hereof until the first business day after the two-year anniversary of the Distribution Date, it will not and will not permit Controlled or any other Subsidiary described in clause (iii) of Section 6.01(b) to (i) enter into any Proposed Acquisition Transaction or, to the extent Air PubCo has the right to prohibit any Proposed Acquisition Transaction, permit any Proposed Acquisition Transaction to occur (whether by (A) redeeming rights under a shareholder rights plan, (B) finding a tender offer to be a “permitted offer” under any such plan or otherwise causing any such plan to be inapplicable or neutralized with respect to any Proposed Acquisition Transaction, (C) approving any Proposed Acquisition Transaction, whether for purposes of Section 203 of the DGCL or any similar corporate statute, any “fair price” or other provision of Air PubCo’s charter or bylaws, (D) amending its certificate of incorporation to declassify its Board of Directors or approving any such amendment, or otherwise), (ii) merge or consolidate with any other Person or liquidate or partially liquidate, (iii) in a single transaction or series of transactions, sell or transfer (other than sales or transfers of inventory in the ordinary course of business) all or substantially all of the assets that were transferred to Air PubCo pursuant to the Contribution or sell or transfer twenty-five percent (25%) or more of the gross assets of any Active Trade or Business or twenty-five percent (25%) or more of the consolidated gross assets of Air PubCo and its Affiliates (such percentages to be measured based on fair market value as of the Distribution Date), (iv) redeem or otherwise repurchase (directly or through an Affiliate of Air PubCo) any of Air PubCo stock, or rights to acquire stock, except to the extent such repurchases satisfy Section 4.05(1)(b) of Revenue Procedure 96-30 (as in effect prior to the amendment of such Revenue Procedure by Revenue Procedure 2003-48), (v) amend its certificate of incorporation (or other organizational documents), or take any other action, whether through a stockholder vote or otherwise, affecting the voting rights of Air PubCo Capital Stock (including, without limitation, through the conversion of one class of Air PubCo
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Capital Stock into another class of Air PubCo Capital Stock) or (vi) take any other action or actions (including any action or transaction that would be reasonably likely to be inconsistent with any representation made in the Representation Letters or the Tax Opinions/Rulings) which in the aggregate (and taking into account any other transactions described in this Section 6.01(c)) would be reasonably likely to have the effect of causing or permitting one or more Persons (whether or not acting in concert) to acquire directly or indirectly stock representing a forty-five percent (45%) or greater interest in Air PubCo or Controlled or otherwise jeopardize the Tax-Free Status, unless prior to taking any such action set forth in the foregoing clauses (i) through (vi), (1) Air PubCo shall have requested that RemainCo obtain a Ruling in accordance with Sections 6.03(b) and (d) of this Agreement to the effect that such transaction will not affect the Tax-Free Status and RemainCo shall have received such a Ruling in form and substance satisfactory to RemainCo in its sole and absolute discretion, or (2) if requested in writing by RemainCo, Air PubCo shall provide RemainCo with an Unqualified Tax Opinion in form and substance satisfactory to RemainCo in its sole and absolute discretion (and in determining whether an opinion is satisfactory, RemainCo may consider, among other factors, the appropriateness of any underlying assumptions and management’s representations if used as a basis for the opinion and RemainCo may determine that no opinion would be acceptable to RemainCo) or (3) RemainCo shall have waived the requirement to obtain such Ruling or Unqualified Tax Opinion. RemainCo shall not be required to take any action related to obtaining a Ruling unless and until Air PubCo has provided to RemainCo an opinion reasonably acceptable to RemainCo from a nationally recognized Tax Advisor to the effect that the outcome of the ruling process should be favorable. Notwithstanding anything to the contrary in this Agreement or the Separation Agreement, Air PubCo agrees that, from the date hereof until after the two-year anniversary of the Distribution Date, it will not and will not permit any of its Subsidiaries to sell, transfer, or issue any stock of Controlled, such that Air PubCo continues to own one hundred percent (100%) of the issued and outstanding shares of Controlled from the date hereof until at least the first business day after the two-year anniversary of the Distribution Date.
(d) Certain Issuances of Air PubCo Capital Stock. If Air PubCo proposes to enter into any Section 6.01(d) Acquisition Transaction or, to the extent Air PubCo has the right to prohibit any Section 6.01(d) Acquisition Transaction, proposes to permit any Section 6.01(d) Acquisition Transaction to occur, in each case, during the period from the date hereof until the first business day after the two-year anniversary of the Distribution Date, Air PubCo shall provide RemainCo, no later than ten (10) business days following the signing of any written agreement with respect to such Section 6.01(d) Acquisition Transaction, with a written description of such transaction (including the type and amount of Air PubCo Capital Stock to be issued in such transaction) and a certificate of the Board of Directors of Air PubCo to the effect that the Section 6.01(d) Acquisition Transaction is not a Proposed Acquisition Transaction or any other transaction to which the requirements of Section 6.01(c) apply (a “Board Certificate”).
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Section 6.02 Restrictions on RemainCo. RemainCo agrees that it will not take or fail to take, or permit any RemainCo Affiliate, as the case may be, to take or fail to take, any action (i) where such action or failure to act would be inconsistent with or cause to be untrue any statement, information, covenant or representation in any Representation Letters or Tax Opinions/Rulings or (ii) which adversely affects or could reasonably be expected to adversely affect (A) the Tax-Free Status of the Internal Distribution or the External Distribution, or (B) the qualification of any Separation Transaction under U.S. federal, state, local or non-U.S. Tax Law as tax free (including, but not limited to, those transactions described in any of the Tax Opinions/Rulings received with respect to such Separation Transaction) from so qualifying. For the avoidance of doubt, Air PubCo’s sole recourse for violations of this Section 6.02 shall be as set forth in Section 6.04(b).
Section 6.03 Procedures Regarding Opinions and Rulings.
(a) If Air PubCo notifies RemainCo that it desires to take one of the actions described in clauses (i) through (vi) of Section 6.01(c) (a “Notified Action”), RemainCo and Air PubCo shall reasonably cooperate to attempt to obtain the Ruling or Unqualified Tax Opinion referred to in Section 6.01(c), unless RemainCo shall have waived the requirement to obtain such Ruling or Unqualified Tax Opinion.
(b) Rulings or Unqualified Tax Opinions Requested by Air PubCo. RemainCo agrees that at the reasonable request of Air PubCo pursuant to Section 6.01(c), RemainCo shall cooperate with Air PubCo and use reasonable efforts to seek to obtain, as expeditiously as possible, an Unqualified Tax Opinion or, in RemainCo’s sole discretion, a Ruling from the IRS, for the purpose of permitting Air PubCo to take the Notified Action. Further, in no event shall RemainCo be required to file any Ruling Request under this Section 6.03(b) unless Air PubCo represents that (A) it has read the Ruling Request, and (B) all information and representations, if any, relating to any member of the Air PubCo Group, contained in the Ruling Request documents are (subject to any qualifications therein) true, correct and complete. Air PubCo shall reimburse RemainCo for all reasonable third-party costs and expenses incurred by the RemainCo Group in filing a Ruling Request and/or obtaining a Ruling or Unqualified Tax Opinion requested by Air PubCo within ten (10) business days after receiving an invoice from RemainCo therefor.
(c) Rulings or Unqualified Tax Opinions Requested by RemainCo. RemainCo shall have the right to obtain a Ruling or an Unqualified Tax Opinion at any time in its sole and absolute discretion. If RemainCo determines to obtain a Ruling or an Unqualified Tax Opinion, Air PubCo shall (and shall cause each of its Affiliates to) cooperate with RemainCo and take any and all actions reasonably requested by RemainCo in connection with obtaining the Ruling or Unqualified Tax Opinion (including, without limitation, by making any representation or covenant or providing any materials or information requested by the IRS or Tax Advisor; provided that Air PubCo shall not be required to make (or cause any of its Affiliates to make) any representation or covenant that is inconsistent with historical facts or as to future matters or events over which it has no control). RemainCo shall reimburse Air PubCo for all reasonable third-party costs and expenses incurred by the Air PubCo Group in connection with such cooperation within ten (10) business days after receiving an invoice from Air PubCo therefor.
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(d) Air PubCo hereby agrees that RemainCo shall have sole and exclusive control over the process of obtaining any Ruling, and that only RemainCo shall apply for a Ruling. In connection with obtaining a Ruling pursuant to Section 6.03(b), (i) RemainCo shall keep Air PubCo informed in a timely manner of all material actions taken or proposed to be taken by RemainCo in connection therewith; (ii) RemainCo shall (A) reasonably in advance of the submission of any Ruling Request documents provide Air PubCo with a draft copy thereof, (B) reasonably consider Air PubCo’s comments on such draft copy, (C) provide Air PubCo with a final copy and (D) RemainCo shall provide Air PubCo with notice reasonably in advance of, and Air PubCo shall have the right to attend, at its own expense, any formally scheduled meetings with the IRS (subject to the approval of the IRS) that relate to such Ruling. Neither Air PubCo nor any Affiliate directly or indirectly controlled by Air PubCo shall seek any guidance from the IRS or any other Tax Authority (whether written, verbal or otherwise) at any time concerning the Distributions (including the impact of any transaction on the Distributions).
Section 6.04 Liability for Tax-Related Losses.
(a) Notwithstanding anything in this Agreement or the Separation Agreement to the contrary (and in each case regardless of whether a Ruling, Unqualified Tax Opinion or waiver described in clause (1), (2) or (3) of Section 6.01(c) may have been provided), subject to Section 6.04(d), Air PubCo shall be responsible for, and shall indemnify and hold harmless RemainCo and its Subsidiaries and each of their respective officers, directors and employees from and against, one hundred percent (100%) of any Tax-Related Losses that are attributable to or result from any one or more of the following: (i) the acquisition (other than pursuant to the Contribution or the Distributions) of all or a portion of Air PubCo’s stock and/or its or its Subsidiaries’ assets by any means whatsoever by any Person, (ii) any negotiations, understandings, agreements or arrangements by Air PubCo with respect to transactions or events (including, without limitation, stock issuances, pursuant to the exercise of stock options or otherwise, option grants, capital contributions or acquisitions, or a series of such transactions or events) that cause the Distributions to be treated as part of a plan pursuant to which one or more Persons acquire directly or indirectly stock of Air PubCo (or Controlled) representing a Fifty-Percent or Greater Interest therein, (iii) any action or failure to act by Air PubCo after the Distributions (including, without limitation, any amendment to Air PubCo’s certificate of incorporation (or other organizational documents), whether through a stockholder vote or otherwise) affecting the voting rights of Air PubCo stock (including, without limitation, through the conversion of one class of Air PubCo Capital Stock into another class of Air PubCo Capital Stock), (iv) any act or failure to act by Air PubCo or any Air PubCo Subsidiary described in Section 6.01 (regardless whether such act or failure to act may be covered by a Ruling, Unqualified Tax Opinion or waiver described in clause (1), (2) or (3) of Section 6.01(c) or a Board Certificate described in Section 6.01(d)) or (v) any breach by Air PubCo of its agreement and representation set forth in Section 6.01(a).
(b) Notwithstanding anything in this Agreement or the Separation Agreement to the contrary, subject to Section 6.04(c), RemainCo shall be responsible for, and shall indemnify and hold harmless Air PubCo and its Subsidiaries and each of their respective officers, directors and employees from and against, one hundred percent (100%) of any
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Tax-Related Losses that are attributable to, or result from any one or more of the following: (i) the acquisition of all or a portion of RemainCo’s stock and/or its assets by any means whatsoever by any Person, (ii) any negotiations, agreements or arrangements by RemainCo with respect to transactions or events (including, without limitation, stock issuances, pursuant to the exercise of stock options or otherwise, option grants, capital contributions or acquisitions, or a series of such transactions or events) that cause the Distributions to be treated as part of a plan pursuant to which one or more Persons acquire directly or indirectly stock of RemainCo representing a Fifty-Percent or Greater Interest therein, (iii) any act or failure to act by RemainCo or a member of the RemainCo Group described in Section 6.02 or any breach by RemainCo of its agreement and representation set forth in Section 6.02, limited, in each case, to Tax-Related Losses arising from Taxes of the RemainCo Group for which an Air PubCo Entity is found jointly, severally or secondarily liable pursuant to the provisions of Treasury Regulation Section 1.1502-6 (or similar provisions of state, local or non-U.S. Tax Law).
(c)
(i) To the extent that any Tax-Related Loss is subject to indemnity under more than one of Section 6.04(a) and (b), responsibility for such Tax-Related Loss shall be shared by RemainCo and Air PubCo according to relative fault.
(ii) Notwithstanding anything in Section 6.04(b) or Section 6.04(c)(i) or any other provision of this Agreement or the Separation Agreement to the contrary:
(A) with respect to (1) any Tax-Related Loss resulting from Section 355(e) of the Code (other than as a result of an acquisition of a Fifty-Percent or Greater Interest in RemainCo) and (2) any other Tax-Related Loss resulting (for the absence of doubt, in whole or in part) from an acquisition after the Distributions of any stock or assets of Air PubCo (or any of its Affiliates) by any means whatsoever by any Person or any action or failure to act by Air PubCo affecting the voting rights of Air PubCo stock, Air PubCo shall be responsible for, and shall indemnify and hold harmless RemainCo and its Affiliates and each of their respective officers, directors and employees from and against, one hundred percent (100%) of such Tax-Related Loss; and
(B) for purposes of calculating the amount and timing of any Tax-Related Loss for which Air PubCo is responsible under this Section 6.04, Tax-Related Losses shall be calculated by assuming that RemainCo, its Group and each member of its Group (1) pays Tax at the highest marginal corporate Tax rates in effect in each relevant taxable year and (2) have no Tax Assets in any relevant taxable year.
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(iii) Notwithstanding anything in Section 6.04(a) or Section 6.04(c)(i) or any other provision of this Agreement or the Separation Agreement to the contrary, with respect to (1) any Tax-Related Loss resulting from Section 355(e) of the Code (other than as a result of an acquisition of a Fifty-Percent or Greater Interest in Air PubCo) and (2) any other Tax-Related Loss resulting (for the absence of doubt, in whole or in part) from an acquisition after the Distributions of any stock or assets of RemainCo (or any of its Affiliates) by any means whatsoever by any Person, RemainCo shall be responsible for, and shall indemnify and hold harmless Air PubCo and its Affiliates and each of their respective officers, directors and employees from and against, one hundred percent (100%) of such Tax-Related Loss.
(d) With respect to any Tax-Related Losses pursuant to this Section 6.04, the Indemnitor shall pay the Indemnitee for any such Tax-Related Losses: (i) in the case of Tax-Related Losses described in clause (i) of the definition of “Tax-Related Losses,” no later than two (2) business days prior to the date the Preparing Party files, or causes to be filed, the applicable Tax Return for the year of the Internal Distribution or External Distribution, as applicable (the “Filing Date”) (provided that if such Tax-Related Losses arise pursuant to a Final Determination, then such Indemnitor shall pay the Indemnitee no later than ten (10) business days after the date of such Final Determination) and (ii) in the case of Tax-Related Losses described in clause (ii) or (iii) of the definition of “Tax-Related Losses,” no later than ten (10) business days after the date the Indemnitee pays such Tax-Related Losses.
(e) Protective Election. If RemainCo determines, in its sole discretion, that one or more protective elections under Section 336(e) of the Code and the Treasury Regulations issued thereunder and any similar provision of state or local Tax Law (each, a “Section 336(e) Election”) shall be made with respect to the Separation Transactions, Air PubCo shall (and shall cause its relevant Affiliates to) join RemainCo (and/or its relevant Affiliates) in the making of such election and shall take any action reasonably requested by RemainCo or that is otherwise necessary to give effect to such election (including making any other related election). If a Section 336(e) Election is made with respect to the Separation Transactions, then this Agreement shall be amended in such a manner, if any, as is determined by Parent in good faith to take into account such Section 336(e) Election.
(f) Goldman Sachs Indemnification Letter. Notwithstanding anything to the contrary in this Agreement, Air PubCo shall indemnify and hold harmless RemainCo and each member of the RemainCo Group and each of their respective officers, directors and employees from and against, any and all losses, claims, damages, liabilities, and reasonable and documented out-of-pocket expenses incurred by or asserted against RemainCo or any member of the RemainCo Group or any of their respective officers, directors and employees under or in connection with or otherwise related to the Goldman Sachs Indemnification Letter.
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Section 7. Assistance and Cooperation.
Section 7.01 Assistance and Cooperation.
(a) The Parties shall cooperate in good faith (and cause their respective Affiliates to cooperate) with each other and with each other’s agents, including accounting firms and legal counsel, in connection with Tax matters relating to the Parties and their Affiliates including (i) preparing and filing of Tax Returns, (ii) determining the liability for, and amount of, any Taxes due (including estimated Taxes) or the right to, and amount of, any refund of Taxes, (iii) examinations of Tax Returns, and (iv) any administrative or judicial proceeding in respect of Taxes assessed or proposed to be assessed. Such cooperation shall include making all information and documents in their possession relating to the other Party and its Affiliates available to such other Party as provided in Section 8, and providing such assistance as is commercially reasonable in connection therewith. Each of the Parties shall also make available to the other Party, as reasonably requested and available, personnel (including officers, directors, employees and agents of the Parties or their respective Affiliates) responsible for preparing, maintaining, and interpreting information and documents relevant to Taxes, and personnel reasonably required as witnesses or for purposes of providing information or documents in connection with any administrative or judicial proceedings relating to Taxes. In the event that a member of the RemainCo Group, on the one hand, and a member of the Air PubCo Group, on the other hand, suffers a Tax detriment as a result of a Transfer Pricing Adjustment, the Parties shall cooperate pursuant to this Section 7 to seek any competent authority relief that may be available with respect to such Transfer Pricing Adjustment. Air PubCo shall cooperate with RemainCo and take any and all actions reasonably requested by RemainCo in connection with obtaining the Tax Opinions/Rulings (including, without limitation, by making any new representation or covenant, confirming any previously made representation or covenant or providing any materials or information requested by any Tax Advisor or Tax Authority; provided that, Air PubCo shall not be required to make or confirm any representation or covenant that is inconsistent with historical facts or as to future matters or events over which it has no control).
(b) Any information or documents provided under this Section 7 shall be kept confidential by the Party receiving such information or documents, except as may otherwise be necessary in connection with the filing of Tax Returns or in connection with any administrative or judicial proceedings relating to Taxes. Notwithstanding any other provision of this Agreement or any other agreement, (i) neither RemainCo nor any of its Affiliates shall be required to provide Air PubCo, its Affiliates or any other Person access to or copies of any information, documents or procedures (including the proceedings of any Tax Contest) other than information, documents or procedures that relate to Air PubCo, its business, assets or Affiliates and (ii) in no event shall RemainCo or any of its Affiliates be required to provide Air PubCo, its Affiliates or any other Person access to or copies of any information or documents if such action could reasonably be expected to result in the waiver of any Privilege. In addition, in the event that RemainCo determines that the provision of any information or documents to Air PubCo or its Affiliates could be commercially detrimental, violate any Law or agreement, or waive any Privilege, the Parties shall use reasonable best efforts to permit compliance with its obligations under this Section 7 in a manner that avoids any such harm or consequence.
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Section 7.02 Income Tax Return Information. The Parties acknowledge that time is of the essence in relation to any request for information, assistance or cooperation made by the Parties pursuant to Section 7.01 or this Section 7.02. The Parties acknowledge that failure to conform to the reasonable deadlines set by the Parties could cause irreparable harm. Each Party shall provide to the other Party information and documents relating to its respective Group required by such other Party to prepare Tax Returns, including, but not limited to, any pro forma Tax Returns required by the Preparing Party for purposes of preparing such Tax Returns. Any information or documents the Preparing Party requires to prepare such Tax Returns shall be provided in such form as the Preparing Party reasonably requests and at or prior to the time reasonably specified by the Preparing Party so as to enable the Preparing Party to file such Tax Returns on a timely basis.
Section 7.03 Reliance by RemainCo. If any member of the Air PubCo Group supplies information to a member of the RemainCo Group in connection with a Tax liability and an officer of a member of the RemainCo Group signs a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then upon the written request of such member of the RemainCo Group identifying the information being so relied upon, the chief financial officer of Air PubCo (or any officer of Air PubCo as designated by the chief financial officer of Air PubCo) shall certify in writing that to his or her knowledge (based upon consultation with appropriate employees) the information so supplied is accurate and complete.
Section 7.04 Reliance by Air PubCo. If any member of the RemainCo Group supplies information to a member of the Air PubCo Group in connection with a Tax liability and an officer of a member of the Air PubCo Group signs a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then upon the written request of such member of the Air PubCo Group, identifying the information being so relied upon, the chief financial officer of RemainCo (or any officer of RemainCo as designated by the chief financial officer of RemainCo) shall certify in writing that to his or her knowledge (based upon consultation with appropriate employees) the information so supplied is accurate and complete.
Section 8. Tax Records.
Section 8.01 Retention of Tax Records. Each Party shall preserve and keep all Tax Records exclusively relating to the assets and activities of its respective Group for any Pre-Distribution Period, and RemainCo shall preserve and keep all other Tax Records relating to Taxes of the Groups for any Pre-Distribution Period, for so long as the contents thereof may become material in the administration of any matter under the Code or other applicable Tax Law, but in any event until the later of (i) the expiration of any applicable statutes of limitations, or (ii) ten (10) years after the Distribution Date (such later date, the “Retention Date”). After the Retention Date, each Party may dispose of such Tax Records. If, prior to the Retention Date, (a) a Party reasonably determines that any Tax Records which it would otherwise be required to preserve and keep under this Section 8 are no longer material in the administration of any matter under the Code or other applicable Tax Law and the other Party consents in writing, then such first Party may dispose of such Tax Records upon sixty (60) business days’ prior notice to the other Party. Any notice of an intent to dispose given pursuant to this Section 8.01 shall include a list of the Tax Records to be disposed of describing in reasonable detail each such Tax Record being disposed. The notified Party shall have the opportunity, at its cost and expense, to copy or remove, within such sixty (60) business day period, all or any part of such Tax Records. If, at any time prior to the Retention Date,
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Air PubCo determines to decommission or otherwise discontinue any computer program or information technology system used to access or store any Tax Records, then Air PubCo may decommission or discontinue such program or system upon ninety (90) days’ prior written notice to RemainCo and RemainCo shall have the opportunity, at its cost and expense, to copy, within such ninety (90) business day period, all or any part of the underlying data relating to the Tax Records accessed by or stored on such program or system.
Section 8.02 Access to Tax Records. Each Party and its respective Affiliates shall make available to the other Party for inspection and copying during normal business hours upon reasonable notice all Tax Records (and, for the avoidance of doubt, any pertinent underlying data accessed or stored on any computer program or information technology system) in their possession and shall permit such other Party and its Subsidiaries, authorized agents and representatives and any representative of a Tax Authority or other Tax auditor direct access during normal business hours, upon reasonable written notice and at the cost and expense of such other Party, to any computer program or information technology system used to access or store any Tax Records, in each case to the extent reasonably required by such other Party in connection with the preparation of Tax Returns or financial accounting statements, audits, litigation, or the resolution of items under this Agreement.
Section 8.03 Preservation of Privilege. No member of the Air PubCo Group shall provide access to, copies of, or otherwise disclose to any Person any documentation relating to Taxes existing prior to the Distribution Date to which Privilege may reasonably be asserted without the prior written consent of RemainCo (such consent not to be unreasonably withheld, conditioned or delayed).
Section 9. Tax Contests.
Section 9.01 Notice. If any Party becomes aware of any written communication from a Tax Authority regarding any pending Tax audit, assessment or proceeding or other Tax Contest which, if successful, could reasonably be expected to result in an indemnification obligation under this Agreement, such Party shall promptly notify the other Party in writing. Such notice shall attach copies of the pertinent portion of any written communication from a Tax Authority and contain factual information (to the extent known) describing any asserted Tax liability in reasonable detail and shall be accompanied by copies of any notice and other documents received from any Tax Authority in respect of any such matters. If an indemnified Party has knowledge of an asserted Tax liability with respect to a matter for which it is to be indemnified hereunder and such Party fails to give the indemnifying Party prompt notice of such asserted Tax liability and the indemnifying Party is entitled under this Agreement to contest the asserted Tax liability, then (i) if the indemnifying Party is materially prejudiced as a result of the failure to give prompt notice, the indemnifying Party shall have no obligation to indemnify the indemnified Party for any Taxes arising out of such asserted Tax liability, and (ii) if the indemnifying Party is not precluded from contesting the asserted Tax liability in any forum, but such failure to give prompt notice results in a material monetary detriment to the indemnifying Party, then any amount which the indemnifying Party is otherwise required to pay the indemnified Party pursuant to this Agreement shall be reduced by the amount of such detriment.
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Section 9.02 Control of Tax Contests.
(a) Joint Returns. In the case of any Tax Contest with respect to any RemainCo Federal Consolidated Income Tax Return, and any other combined, consolidated, affiliated, unitary or other joint Tax Return which includes both members of the Air PubCo Group and members of the RemainCo Group, RemainCo shall have exclusive control over such Tax Contest, including exclusive authority with respect to any settlement of such Tax liability, subject to Section 9.02(f) below.
(b) Pre-Distribution Period Tax Returns. Other than a Tax Contest described in Section 9.02(a), in the case of any Tax Contest with respect to any Tax Return for any Tax Period ending on or prior to the Distribution Date, the Party having the greatest liability for Taxes subject to such Tax Contest shall have exclusive control over such Tax Contest, including exclusive authority with respect to any settlement of such Tax liability, subject to Section 9.02(e) and (f) below.
(c) Straddle Period Tax Returns. Other than a Tax Contest described in Section 9.02(a), in the case of any Tax Contest with respect to any Tax Return for any Straddle Period, the Party having the greatest liability for Taxes subject to such Tax Contest shall have exclusive control over such Tax Contest, including exclusive authority with respect to any settlement of such Tax liability, subject to Section 9.02(e) and (f) below.
(d) Controlling Party. For purposes of this Agreement, in the case of any Tax Contest described in Section 9.02(a), (b) or (c), “Controlling Party” means the Party entitled to control the Tax Contest under such Sections and “Non-Controlling Party” means the other Party.
(e) Contest Rights. Unless waived by the Parties in writing, in connection with any potential adjustment in a Tax Contest as a result of which adjustment the Non-Controlling Party may reasonably be expected to (1) become liable to make any indemnification payment to the Controlling Party under this Agreement, (2) become obligated to make, or have a member of its Group make, a payment to the relevant Tax Authority or (3) become subject to a material increase in Taxes for any Post-Distribution Period: (i) the Controlling Party shall keep such Non-Controlling Party informed in a timely manner of all actions taken or proposed to be taken by the Controlling Party with respect to such potential adjustment in such Tax Contest, (ii) the Controlling Party shall timely provide such Non-Controlling Party copies of any written materials relating to such potential adjustment in such Tax Contest received from any Tax Authority, (iii) the Controlling Party shall timely provide such Non-Controlling Party with copies of any correspondence or filings submitted to any Tax Authority or judicial authority in connection with such potential adjustment in such Tax Contest, (iv) the Controlling Party shall consult with such Non-Controlling Party and offer such Non-Controlling Party a reasonable opportunity to comment before submitting any written materials prepared or furnished in connection with such potential adjustment in such Tax Contest, and the Controlling Party shall consider any reasonable comments in good faith, and (v) the Controlling Party shall defend such Tax Contest diligently and in good faith. The failure of the Controlling Party to take any action specified in the preceding sentence with respect
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to the Non-Controlling Party shall not relieve the Non-Controlling Party of any liability and/or obligation which it may have to the Controlling Party under this Agreement except to the extent that such Non-Controlling Party is actually harmed by such failure, and in no event shall such failure relieve such Non-Controlling Party from any other liability or obligation which it may have to the Controlling Party.
(f) Tax Contest Participation. Unless waived by the Parties in writing, (i) the Controlling Party shall provide the Non-Controlling Party with written notice reasonably in advance of, and such Non-Controlling Party shall have the right to attend (at its own cost and expense), any formally scheduled meetings with Tax Authorities or hearings or proceedings before any judicial authorities and (ii) the Parties shall cooperate in good faith and the Controlling Party shall consider any reasonable comments from the Non-Controlling Party in connection with any potential adjustment in a Tax Contest pursuant to which such Non-Controlling Party may reasonably be expected to (1) become liable to make any indemnification payment to the Controlling Party under this Agreement or (2) become subject to a material increase in Taxes for any Post-Distribution Period. The failure of the Controlling Party to provide such written notice specified in this Section 9.02(f) to the Non-Controlling Party shall not relieve such Non-Controlling Party of any liability and/or obligation which it may have to the Controlling Party under this Agreement except to the extent that such Non-Controlling Party is actually harmed by such failure, and in no event shall such failure relieve such Non-Controlling Party from any other liability or obligation which it may have to the Controlling Party.
(g) Power of Attorney. Each member of the Non-Controlling Party’s Group shall execute and deliver to the Controlling Party (or such member of the Controlling Party’s Group as the Controlling Party shall designate) any power of attorney or other similar document reasonably requested by the Controlling Party (or such designee) in connection with any Tax Contest described in this Section 9.
Section 10. Effective Date. This Agreement shall be effective as of the date hereof.
Section 11. Survival of Obligations. The representations, warranties, covenants and agreements set forth in this Agreement shall be unconditional and absolute and shall remain in effect without limitation as to time.
Section 12. Tax Treatment of Payments. To the extent permitted by applicable Law, including the principles set forth in Arrowsmith v. Commissioner, 344 U.S. 6 (1952), unless otherwise required by a Final Determination, this Agreement or the Separation Agreement or otherwise agreed to among the Parties, for U.S. federal income tax purposes, any payment made pursuant to this Agreement shall be treated as follows: (a) to the extent the member or assets of the payor Group and the member or assets of the payee Group to which the liability for payment relates were separated in a tax-free contribution or tax-free distribution for U.S. federal income tax purposes, such payment shall be treated as a tax-free contribution or tax-free distribution, as applicable, with respect to the stock of the applicable member of the payee Group or payor Group, occurring immediately prior to the relevant transaction in the Distributions or the Contribution, as applicable; (b) to the extent the member or assets of the payor Group and the member or assets of the payee Group to which the liability for payment relates were separated in a taxable transaction
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for U.S. federal income tax purposes, such payment shall be treated as an adjustment to the price or amount, as applicable, of the relevant transaction in the Distributions or the Contribution, as applicable; and (c) payments of interest shall be treated as deductible by the indemnifying Party or its relevant Subsidiary and as income to the Indemnitee or its relevant Subsidiary, as applicable. In the case of each of the foregoing, no Party shall take any position inconsistent with such treatment. In the event that a Tax Authority asserts that a Party’s treatment of a payment pursuant to this Agreement should be other than as set forth in this Section 12, such Party shall use its commercially reasonable efforts to contest such challenge.
Section 13. Disagreements.
Section 13.01 Discussion. The Parties will, and will cause their respective Group members to, use commercially reasonable efforts to resolve in an amicable manner all disagreements and misunderstandings in connection with their respective rights and obligations under this Agreement, including any amendments hereto. In furtherance thereof, in the event of any dispute or disagreement (a “Dispute”) between any members of the Groups as to the interpretation of any provision of this Agreement or the performance of obligations hereunder, the Tax departments of the Parties shall negotiate in good faith to resolve such Dispute.
Section 13.02 Escalation. If good faith negotiations do not resolve a Dispute, then such Dispute (other than any Dispute involving computational matters or the interpretation of operative Tax Law, which shall be governed exclusively by Section 13.03) shall be resolved pursuant to the procedures set forth in Article IV of the Separation Agreement.
Section 13.03 Referral to Tax Advisor. If good faith negotiations do not resolve a Dispute involving computational matters or the interpretation of operative Tax Law, such Dispute will be referred to a Tax Advisor acceptable to each of the Parties to act as an arbitrator in order to resolve the Dispute. In the event that the Parties are unable to agree upon a Tax Advisor within fifteen (15) business days following the completion of the escalation process or the event of a Dispute involving technical Tax matters, the Parties shall each separately retain an independent, nationally recognized accounting firm (each, a “Preliminary Tax Advisor”), which Preliminary Tax Advisors shall jointly select a Tax Advisor on behalf of the Parties to act as an arbitrator in order to resolve the Dispute. The Tax Advisor may, in its discretion, obtain the services of any third-party appraiser, accounting firm or consultant that the Tax Advisor deems necessary to assist it in resolving such disagreement. The Tax Advisor shall furnish written notice to the Parties of its resolution of any such Dispute as soon as practical, but in any event no later than thirty (30) business days after its acceptance of the matter for resolution. Any such resolution by the Tax Advisor will be conclusive and binding on the Parties. Following receipt of the Tax Advisor’s written notice to the Parties of its resolution of the Dispute, the Parties shall each take or cause to be taken any action necessary to implement such resolution of the Tax Advisor. Each Party shall pay its own fees and expenses (including the fees and expenses of its representatives) incurred in connection with the referral of the matter to the Tax Advisor (and the Preliminary Tax Advisors, if any). All fees and expenses of the Tax Advisor (and the Preliminary Tax Advisors, if any) in connection with such referral shall be shared equally by the Parties.
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Section 13.04 Injunctive Relief. Nothing in this Section 13 will prevent any Party from seeking injunctive relief if any delay resulting from the efforts to resolve a Dispute through the process set forth in this Section 13 could result in serious and irreparable injury to any Party. Notwithstanding anything to the contrary in this Agreement, RemainCo and Air PubCo are the only members of their respective Group entitled to commence a dispute resolution procedure under this Agreement, and each of RemainCo and Air PubCo will cause its respective Group members not to commence any dispute resolution procedure other than through such Party as provided in this Section 13.
Section 14. Expenses. Except as otherwise provided in this Agreement, with respect to any third-party expenses incurred in connection with the preparation of Tax Returns, Tax Contests, and other matters related to Taxes under the provisions of this Agreement for which both Parties are reasonably expected to bear any liability for Taxes under this Agreement, (i) RemainCo shall be responsible for, and shall bear, the RemainCo Fixed Ratio of such expenses, and (ii) Air PubCo shall be responsible for, and shall bear, the Air PubCo Fixed Ratio of such expenses. Except for expenses described in the immediately preceding sentence, each Party and its Affiliates shall bear their own expenses.
Section 15. General Provisions.
Section 15.01 Addresses and Notices. Each Party giving any notice required or permitted under this Agreement will give such notice in writing and use one of the following methods of delivery to the Party to be notified, at the address set forth below or another address of which the sending Party has been notified in accordance with this Section 15.01: (a) personal delivery; (b) facsimile or telecopy transmission with a reasonable method of confirming transmission; (c) commercial overnight courier with a reasonable method of confirming delivery; or (d) pre-paid, United States of America certified or registered mail, return receipt requested. Notice to a Party is effective for purposes of this Agreement only if given as provided in this Section 15.01 and shall be deemed given on the date that the intended addressee actually receives the notice.
If to RemainCo:
Madison Industries International Holdings, LLC
444 West Lake Street, Suite 4400
Chicago, IL 60606
Attention: Larry Gies
Email: [****]
with a copy (which shall not constitute notice) to:
Paul Hastings LLP
71 S. Wacker Drive, Suite 4500
Chicago, IL 60606
Attention: Brian F. Richards
Email: [****]
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If to Air PubCo:
Madison Air Solutions Corporation
444 West Lake Street, Suite 4460
Chicago, IL 60606
Attention: John Lavorato, General Counsel
Email: [****]
A Party may change the address for receiving notices under this Agreement by providing written notice of the change of address to the other Party.
Section 15.02 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their successors and permitted assigns.
Section 15.03 Waiver. The Parties may waive a provision of this Agreement only by a writing signed by the Party intended to be bound by the waiver. A Party is not prevented from enforcing any right, remedy or condition in the Party’s favor because of any failure or delay in exercising any right or remedy or in requiring satisfaction of any condition, except to the extent that the Party specifically waives the same in writing. A written waiver given for one matter or occasion is effective only in that instance and only for the purpose stated therein. A waiver once given is not to be construed as a waiver for any other matter or occasion. Any enumeration of a Party’s rights and remedies in this Agreement is not intended to be exclusive, and a Party’s rights and remedies are intended to be cumulative to the extent permitted by Law and include any rights and remedies authorized in Law or in equity.
Section 15.04 Severability. If any provision of this Agreement is determined to be invalid, illegal or unenforceable, the remaining provisions of this Agreement remain in full force, if the essential terms and conditions of this Agreement for each party remain valid, binding and enforceable.
Section 15.05 Authority. Each of the Parties represents to the other that (a) it has the corporate or other requisite power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate or other action, (c) it has duly and validly executed and delivered this Agreement, and (d) this Agreement is a legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and general equity principles.
Section 15.06 Further Action. Each Party shall execute and deliver all documents, provide all information, and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement, including the execution and delivery to the other Party and their Affiliates and representatives of such powers of attorney or other authorizing documentation as is reasonably necessary or appropriate in connection with Tax Contests (or portions thereof) under the control of such other Party in accordance with Section 9.
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Section 15.07 Integration. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all other agreements, whether or not written, in respect of any Taxes between or among any member or members of a Party’s Group, on the one hand, and any member or members of the other Party’s Group, on the other hand. All such other agreements shall be of no further effect between the Parties and any rights or obligations existing thereunder shall be fully and finally settled, calculated as of the date hereof. In the event of any inconsistency between this Agreement and the Separation Agreement, or any other agreements relating to the transactions contemplated by the Separation Agreement, with respect to the subject matter hereof, the provisions of this Agreement shall control.
Section 15.08 Construction. The language in all parts of this Agreement shall in all cases be construed according to its fair meaning and shall not be strictly construed for or against any Party. The captions, titles and headings included in this Agreement are for convenience only, and do not affect this Agreement’s construction or interpretation. Unless otherwise indicated, all “Section” references in this Agreement are to sections of this Agreement. References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. Unless the context otherwise requires, the words “include,” “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation.” Unless the context otherwise requires, the words “hereof,” “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement. The words “written request” when used in this Agreement shall include email. Reference in this Agreement to any time shall be to Chicago, Illinois time unless otherwise expressly provided herein.
Section 15.09 No Double Recovery. No provision of this Agreement shall be construed to provide an indemnity or other recovery for any costs, damages, or other amounts for which the damaged Party has been fully compensated under any other provision of this Agreement or under any other agreement or action at Law or equity. Unless expressly required in this Agreement, a Party shall not be required to exhaust all remedies available under other agreements or at Law or equity before recovering under the remedies provided in this Agreement.
Section 15.10 Counterparts. The Parties may execute this Agreement in multiple counterparts, each of which constitutes an original as against the Party that signed it, and all of which together constitute one agreement. This Agreement is effective upon delivery of one executed counterpart from each Party to the other Parties. The signatures of the Parties need not appear on the same counterpart. The delivery of signed counterparts by facsimile or email transmission that includes a copy of the sending Party’s signature is as effective as signing and delivering the counterpart in person.
Section 15.11 Governing Law. This Agreement and any dispute arising out of, in connection with or relating to this Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware, without giving effect to the conflict of laws principles thereof.
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Section 15.12 Jurisdiction. If any dispute arises out of or in connection with this Agreement, except as expressly contemplated by another provision of this Agreement, the Parties irrevocably (and the Parties will cause each other member of their respective Group to irrevocably) (a) consent and submit to the exclusive jurisdiction of federal and state courts located in Delaware, (b) waive any objection to that choice of forum based on venue or to the effect that the forum is not convenient, and (c) WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO TRIAL OR ADJUDICATION BY JURY.
Section 15.13 Amendment. The Parties may amend this Agreement only by a written agreement signed by each Party and that identifies itself as an amendment to this Agreement.
Section 15.14 Air PubCo Subsidiaries. If, at any time, Air PubCo acquires or creates one or more subsidiaries that are includable in its Group, such subsidiaries shall be subject to this Agreement and all references to the Air PubCo Group herein shall thereafter include a reference to such subsidiaries.
Section 15.15 Successors. This Agreement shall be binding on and inure to the benefit of any successor by merger, acquisition of assets, or otherwise, to any of the Parties (including, but not limited, to any successor of RemainCo or Air PubCo succeeding to the Tax attributes of such Party under Section 381 of the Code), to the same extent as if such successor had been an original Party to this Agreement.
Section 15.16 Injunctions. The Parties acknowledge that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached. The Parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any court having jurisdiction, such remedy being in addition to any other remedy to which they may be entitled at Law or in equity.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the Parties as of and on the date first set forth above.
MADISON INDUSTRIES INTERNATIONAL HOLDINGS, LLC:
By:
/s/ Larry Gies
Name:
Larry Gies
Title:
President and Chief Executive Officer
MADISON AIR SOLUTIONS CORPORATION:
By:
/s/ Jill Wyant
Name:
Jill Wyant
Title:
President and Chief Executive Officer
[Signature Page to Tax Matters Agreement]
EX-10.4
EX-10.4
Filename: ck0002098430-ex10_4.htm · Sequence: 9
EX-10.4
Exhibit 10.4
TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (this “Agreement”) is made and entered into as of April 15, 2026 (the “Effective Date”), by and between Madison Industries International Holdings, LLC, a Delaware limited liability company (“Madison”), and Madison Air Solutions Corporation, a Delaware corporation (“Madison Air”). Madison and Madison Air may each be referred to herein individually as a “Party” and collectively as the “Parties”.
RECITALS
WHEREAS, Madison, Madison Air and other companies are parties to that certain Separation Agreement, dated as of April 15, 2026 (the “Separation Agreement”), pursuant to which Madison has agreed to separate the Madison Air Business from Madison pursuant to the Internal Distribution and External Distribution and for the Madison Air Business to be transferred to Madison Air pursuant to the Contribution, in each case on the terms and subject to the conditions set forth in the Separation Agreement (the transactions effected pursuant to the Separation Agreement are referred to therein as the “Separation”);
WHEREAS, pursuant to the Separation Agreement, each Party has agreed to enter into this Agreement and provide (in such capacity, a “Provider”) to the other Party (in such capacity, a “Recipient”), certain transition services on the terms and conditions set forth herein; and
WHEREAS, in order for Madison to provide and perform the Services contemplated by this Agreement for the benefit of Madison Air, it is necessary and appropriate for Madison Air to furnish, and for Madison, its parent entities and its Affiliates (collectively, the “Madison Information Recipients”) to receive, certain non-public information regarding the Madison Air Business, including financial, operational, technical, personnel-related and other proprietary information, and Madison Air acknowledges and agrees that the provision of such information to the Madison Information Recipients constitutes a material benefit to Madison Air, as such access is essential for the Madison Information Recipients to effectively deliver the Services, to maintain the quality and continuity of support to the Madison Air Business and to facilitate an orderly transition in connection with the Separation;
NOW THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS
Each capitalized term used herein without a definition shall have the meaning given to such term in the Separation Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Madison. Madison makes the following representations and warranties to Madison Air, each of which is true and correct on the Effective Date:
(a) Madison is a limited liability company duly organized, validly existing, and in good standing under the Laws of the State of Delaware.
(b) The execution, delivery and performance by Madison of this Agreement and the consummation of the transactions contemplated hereby (i) are within Madison’s corporate powers and (ii) have been duly authorized by all necessary corporate action on the part of Madison.
(c) This Agreement has been duly executed and delivered by Madison and constitutes a valid and legally binding obligation of Madison, enforceable against Madison in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other Laws affecting creditors’ rights generally and except insofar as the availability of equitable remedies may be limited by applicable Law.
2.2 Representations and Warranties of Madison Air. Madison Air makes the following representations and warranties to Madison, each of which is true and correct on the Effective Date:
(a) Madison Air is a corporation duly organized, validly existing, and in good standing under the Laws of the State of Delaware.
(b) The execution, delivery and performance by Madison Air of this Agreement and the consummation of the transactions contemplated hereby (i) are within Madison Air’s corporate powers and (ii) have been duly authorized by all necessary corporate action on the part of Madison Air.
(c) This Agreement has been duly executed and delivered by Madison Air and constitutes a valid and legally binding obligation of Madison Air, enforceable against Madison Air in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other Laws affecting creditors’ rights generally and except insofar as the availability of equitable remedies may be limited by applicable Law.
2.3 Disclaimer of Warranties. EXCEPT AND ONLY TO THE EXTENT PROVIDED IN SECTIONS 2.1 AND 2.2, NO PARTY IS REPRESENTING OR WARRANTING IN ANY WAY THE PROVISION OF THE SERVICES UNDER THIS AGREEMENT AND HEREBY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, INCLUDING ANY WARRANTY OF NON-INFRINGEMENT AND THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
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ARTICLE III
PROVISION OF SERVICES
3.1 Provisions of Transition Services.
(a) Transition Services. For purposes of this Agreement, the Party providing the Services (as defined below) (or on whose behalf the Services are being provided) is referred to as the “Provider” with respect to such Services, and the Party receiving the Services is referred to as the “Recipient” with respect to such Services. Subject to the terms and conditions of this Agreement, the applicable Provider shall provide, or cause to be provided, to the applicable Recipient and its Affiliates (i) (A) solely for the benefit of the Madison Air Business, the services to be provided by such Provider as described, and on the terms set forth, in Schedule A attached hereto and (B) solely for the benefit of the MII Business, the services to be provided by such Provider as described, and on the terms set forth, in Schedule A attached hereto, which terms are incorporated herein by reference, and (ii) all services reasonably required to affect an orderly transition or migrate away from the provision of the services set forth on Schedule A to such Recipient (which may include data cleansing, extraction, and migration, knowledge transfer, and reasonable access to personnel and facilities) (collectively, the “Services”) for the period commencing upon the Effective Date and ending upon the expiration of the applicable term for such Service as set forth in the Service Schedule, unless such term is earlier terminated or extended in accordance with the terms hereof. Except as may otherwise be agreed upon by the Parties with respect to Omitted Services, Additional Services and Modifications, (i) each Provider shall be required to provide, or cause to be provided, the Services for the sole purpose of conducting the Madison Air Business or the MII Business substantially as conducted immediately prior to the Effective Date, (ii) each Provider shall provide, or cause to be provided, the Services to the extent (and in the manner) such Services have been provided by such Provider and its Affiliates for the Madison Air Business’s or MII Business’ operation prior to the Effective Date, and (iii) the Services will reflect the activities conducted by the Provider at steady state operations, representing the Madison Air Business’s or MII Business’ historical normal course of business. Notwithstanding anything to the contrary in this Agreement, neither a Provider nor any of its Affiliates shall be required to provide any Service to the extent the performance of such Service would require the Provider or its Affiliates to violate any Laws.
(b) Omitted Services. If a Recipient believes that a service historically provided by Provider or its Affiliates to the Madison Air Business or the MII Business, as applicable, in the twelve (12) months preceding the Effective Date (the “Lookback Period”) was omitted from Schedule A (any such service, an “Omitted Service”), then such Recipient may notify the Provider in writing including via email, and upon receipt of such notice, the Provider shall provide such Omitted Service to the Recipient and such Omitted Service shall be deemed to be automatically added as a Service for purposes of this Agreement. The Parties shall promptly cooperate to identify and document the scope and pricing for each such Omitted Service and such Omitted Service shall become a Service for all purposes under this Agreement; provided that the pricing of such Omitted Service shall be determined in accordance with Section 3.4.
(c) Additional Services and Modifications.
(i) During the Term, the Recipient may identify and request that the Provider provide, or cause to be provided, additional transition services that are not Omitted Services or Modifications to the extent such services are reasonably necessary and may have been historically provided by Provider for (i) the operation and conduct of the Madison Air Business in substantially
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the same manner as it was conducted prior to the Effective Date or (ii) Recipient to transition and migrate the Madison Air Business to Recipient or it is Affiliates (each such service, an “Additional Service”). If it is commercially reasonable for the Provider or one or more of its Affiliates to provide such Additional Service and the Provider or one or more of its Affiliates is reasonably capable of providing such Additional Service, then the Provider will consider such request and the provision of such services in good faith but shall only have an obligation hereunder to agree to provide such Additional Service to Recipient if it is reasonably capable of providing such Additional Service and if it is commercially reasonable for Provider to provide such Additional Service and the Parties agree in good faith on commercially reasonable terms for the provision of such Additional Service; provided that the Recipient of such Additional Service shall be responsible for all non-de minimis costs and expenses, if any, incurred by the Provider or one of its Subsidiaries in connection therewith. The Provider shall, as soon as reasonably practicable, but in any event no later than fifteen (15) days after the date of receipt of such request, inform Recipient as to whether Provider agrees to provide such Additional Service and may, in its sole discretion, provide a written counter proposal with respect to such Additional Service. If the Provider agrees to provide or cause to be provided such Additional Service, then the Parties shall use commercially reasonable efforts to negotiate and execute an amendment to Schedule A as soon as reasonably practicable. Upon execution of such amendment, any Additional Service described in such amendment shall be included in Schedule A and shall be considered a Service for purposes of this Agreement.
(ii) Without limiting Recipient’s rights under Section 3.1(c)(i) above, either Party may request in writing any modification, supplement, substitute or alteration (each, a “Modification”) to a Service, which request shall include a description of the proposed Modification requested and the associated business specifications. If the Provider or one or more of its Affiliates is reasonably capable of providing such Modification to a Service, then the Provider will consider such request and the provision of such services in good faith but shall only have an obligation hereunder to agree to provide such Modification to Recipient if it is reasonably capable of providing such Modification and the Parties agree in good faith on commercially reasonable terms for the provision of such Modification. If the Provider agrees to provide or causes to be provided such Modification, then the Provider shall provide the Recipient with a good-faith, reasonable, written proposal in respect of such Modification, which proposal shall include any changes in the Fees associated with the Modification. For the avoidance of doubt, any Modification proposed by the Recipient shall be considered in good faith by the Provider, and a Modification shall not be binding on the Parties until memorialized in a written document executed by an authorized representative of both Parties.
(d) Performance Standards. The Provider shall perform the Services in all cases in a good and workmanlike manner with appropriately experienced and qualified personnel and the Services and Provider in its performance of the Services shall comply in all material respects with applicable Laws. Without limiting the foregoing, the Provider will, or will cause its Affiliates to, provide the Services (i) in a manner, and at a level of service (including with respect to quality, skill, performance, diligence, and timeliness) as such Service was provided to the Madison Air Business or the MII Business, as applicable, during the Lookback Period and with at least a comparable (and no less than a reasonable) standard of service (including with respect to quality, skill, performance, diligence, and timeliness) that the Provider gives to its own operations of a similar nature, and (ii) in accordance with any additional services standards for such Service set forth on Schedule A. The foregoing standards (including as set forth in Schedule A) shall be referred to herein as the “Services Standards.” A Provider shall have the right to temporarily interrupt or suspend (i) the provision of
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Services for emergency maintenance or security purposes; or (ii) the operation of the facilities or systems of the Provider or its Affiliates providing any Services if it is the commercially reasonable judgment of such Provider or its Affiliates that such action is necessary for routine maintenance, security or safety purposes; provided, that, the Provider will (A) use commercially reasonable efforts to schedule non-emergency maintenance that may impact the provision of Services so as not to materially disrupt the operation of the Madison Air Business or MII Business, (B) give Recipient advance written notice of any planned shutdown for general maintenance and will use commercially reasonable efforts to give Recipient advance notice of any shutdown for emergency purposes, and (C) resume the provision of Services as promptly as reasonably possible.
(e) Third Party Consents. Madison and Madison Air will use reasonable best efforts to identify whether the use or provision of all or a portion of the Services pursuant to this Agreement requires the approval, consent, license, permission, waiver or agreement (including any Permit) of a third party (each a “Consent”). If Madison and Madison Air identify any required Consents, then Madison and Madison Air shall each use reasonable best efforts to seek and obtain each such Consent from such third party or to modify any applicable contract to enable the Provider to provide such Services to the Recipient without such Consent. Any cost required to be paid to a third party to obtain any such Consent shall be borne fifty percent (50%) by Madison and fifty percent (50%) by Madison Air. If any required Consent or modification cannot be obtained as a result of such efforts, then Provider will use its commercially reasonable efforts to collaborate with the Recipient to provide alternative equivalent services, reasonably acceptable to the Recipient, in a manner compliant in all material respects with the Services Standards and otherwise in accordance with this Agreement.
(f) Service Failure. In the event that the Provider becomes aware of any actual or anticipated failure in the provision of Services which impacts or is reasonably likely to impact provision of any Service (an “Incident”), it shall notify the Recipient as soon as reasonably practicable but, in any event, within three (3) business days. The Provider shall, as soon as reasonably practicable use commercially reasonable efforts to: (i) investigate the underlying cause(s) of the Incident and preserve any data indicating the cause of failure; (ii) take whatever action is reasonably necessary to minimize the impact of the failure and to prevent it from recurring; (iii) correct the failure and resume performance of the Services in accordance with this Agreement; and (iv) advise the Recipient of the status of the Incident and the remedial efforts being undertaken with respect thereto. Without limiting any other term or condition of this Agreement, the Provider shall cooperate in good faith to resolve such Incident and use commercially reasonable efforts to minimize the impact of such Incident on the Recipient.
(g) Subcontracting. Each Provider may perform the Services through any Affiliate or through non-affiliates contractors, subcontractors, vendors or other third parties without the prior written consent of the Recipient; provided that (i) no subcontracting shall relieve a Provider of any of its obligations or liabilities under this Agreement, (ii) each such third-party provider must comply with any requirements that the Provider generally requires of its own vendors, and (iii) the Provider shall remain responsible for all obligations and liabilities of such third-party with respect to the provision of such Service(s) as if provided by the Provider directly as well as all acts and omissions of such third party in connection with the provision of the applicable Service.
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(h) Intellectual Property. Subject to the terms and conditions of this Agreement and any applicable third-party agreements pursuant to which a Provider or its Affiliates obtain Intellectual Property rights, other proprietary rights, or data, each Provider hereby grants, on behalf of itself and its Affiliates, to the Recipient and its Affiliates (collectively, “Recipient Licensees”), a non-exclusive, non-sublicensable, non-transferable, revocable, limited license solely during the Term, to use for internal business purposes for the operation of the Madison Air Business or MII Business, as applicable, any such Intellectual Property rights, other proprietary rights, and data that are owned by or that are licensable by such Provider or its Affiliates (as determined by and subject to the terms of the applicable third-party agreements, licenses and Consents) and that are required for and to the extent reasonably necessary to receive or use, the Services (the “Transition Services Licensed Materials”). Recipient Licensees are prohibited from, and shall not cause or permit, the reverse engineering, disassembly or de-compilation of any Transition Services Licensed Materials. Except for the license granted pursuant to this Section 3.1(h), each Recipient acknowledges that neither it nor any of its Affiliates shall acquire any right, title or interest (including any license rights or other rights of access or use except for the limited rights specifically granted herein) in any Intellectual Property rights and any derivative works thereof, or modifications, enhancements or improvements thereto, other proprietary rights, or data of the applicable Provider or its Affiliates or licensors.
3.2 Recipient Cooperation. Each Recipient shall make available on a timely basis to the applicable Provider all information and materials reasonably requested by such Provider to enable such Provider to provide the Services hereunder. Each Recipient shall give the applicable Provider reasonable access to such Recipient’s premises to the extent necessary for the purpose of providing the Services hereunder (subject to any reasonable and customary conditions with respect to such access, including requiring the Provider’s compliance with any applicable security, remote access, safety, privacy and confidentiality policies).
3.3 TSA Representatives. The Parties shall use good faith efforts to reasonably cooperate with each other in all matters relating to the provision and receipt of Services, including, for the avoidance of doubt, those Services required to transition or migrate away from the provision of Services at the end of the Term or earlier upon the applicable Recipient’s request (provided, that except as otherwise expressly set forth on Schedule A, each Party shall be responsible for all of its own fees, costs and expenses directly or indirectly arising in connection with the transition or migration activities contemplated hereby). Each Party shall appoint a representative (a “TSA Representative”) to facilitate communications and performance under this Agreement. Each Party may at any time, and from time to time, replace its TSA Representative by notifying the other Party in writing including email, setting forth the name of the TSA Representative to be replaced and the replacement, and certifying that the replacement TSA Representative is authorized to act on behalf of and for the Party. The TSA Representative’s responsibilities shall include resolving disputes under this Agreement and overseeing the performance of the Parties of their obligations under this Agreement. The TSA Representatives shall have regular meetings with each other in person or via teleconference, pursuant to a reasonable schedule mutually agreed to by the TSA Representatives, to discuss the performance of the Parties of their obligations under this Agreement.
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3.4 Pricing; Invoice and Payment; Taxes.
(a) In accordance with the payment terms set forth below, each Recipient agrees to timely pay or cause to be paid the applicable Provider the fees set forth on Schedule A the fees for any Omitted Services, Additional Services or Modifications such Recipient has received hereunder (the “Fees”). The Fees for any Omitted Services, Additional Services or Modifications shall be the applicable Provider’s actual costs (including any third-party services invoiced to Provider on behalf of the Recipient) for providing such Omitted Services, Additional Services or Modifications (without any markup or corporate overhead), including actual costs attributable to employees, vendors, contractors and other third-party service providers, provided that for purposes of determining such costs, the cost of full-time employees shall be calculated at their Fully Loaded Cost, and such Fully Loaded Cost shall be without duplication of any other cost included in the actual costs. Each Provider shall invoice the applicable Recipient after the end of each month for the applicable Services performed or deemed to be performed for such month. Each invoice shall be payable by the applicable Recipient thirty (30) days after the date of Recipient’s receipt of each such invoice, excluding any portion of the invoice that such Recipient disputes in writing in good faith pursuant to Section 3.4(b) below. Each Provider shall provide to the applicable Recipient upon request copies of such records and documentation of such Provider as may be reasonably necessary for such Recipient to verify any Fees. As used herein, “Fully Loaded Costs” means the Provider’s fully loaded costs of full-time employees incurred in connection with the provision of a Service, which shall be calculated as the sum of the percentage of time spent by full-time employees providing or supporting the Service, multiplied by the total compensation of a full-time employee (including hourly rate, bonus, long-term incentives and other related benefits, to the extent applicable), including individual overhead, but without markup or corporate overhead.
(b) The Fees set forth on Schedule A does not include any Taxes. The Recipient shall reimburse the Provider for amounts equal to any sales, use, excise, value added or other similar Taxes imposed by any U.S. Governmental Authority, however designated or levied, based upon any Fees or other amounts due under this Agreement, the provision of the Services or the provision or use of supplies or inventory provided under this Agreement, as provided to the Recipient and its Affiliates by the Provider (such Taxes, “Covered Taxes”). The Parties agree that Covered Taxes shall not include, and the Recipient shall not be responsible for, (i) any employment Taxes, personal property Taxes, franchise Taxes or other Taxes imposed on or measured by the gross or net income, assets or gross receipts of the Provider or (ii) any Taxes imposed by any non-U.S. Governmental Entity (except to the extent such Taxes are charged by a third-party provider and would otherwise be chargeable to the Recipient as part of the Fees). Covered Taxes shall be invoiced and paid in accordance with Section 3.4(a).
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ARTICLE IV
TERM; TERMINATION
4.1 Term of Services. This Agreement shall commence on the Effective Date and, with respect to each Service, shall continue through the noted duration for the individual Services as listed on Schedule A, unless such Service or this Agreement is earlier terminated as provided below (the “Term”). Recipient in its sole discretion may elect to extend the term of any Service for up to two (2) additional three (3) month periods upon at least thirty (30) days’ advance written notice to the Provider.
4.2 Term of the Agreement. This Agreement shall remain in full force and effect until the earlier of (i) the expiration or termination of all of the Services provided hereunder and (ii) the termination of this Agreement in accordance with Section 4.3.
4.3 Termination.
(a) Termination for Cause. Either Party may terminate this Agreement, in whole or in part, prior to the expiration of the Term immediately upon written notice to the other Party if the other Party: (i) breaches this Agreement by failing to make undisputed payments when due and such breach continues for a period of thirty (30) days following a written request to cure such breach; (ii) commits a material breach of this Agreement and such breach continues and remains uncured for a period of forty-five (45) days following a written request to cure such breach; or (iii) files, or has filed against it, a petition for voluntary or involuntary bankruptcy or pursuant to any other insolvency law or makes or seeks to make a general assignment for the benefit of its creditors or applies for or consents to the appointment of a trustee, receiver or custodian for it or a substantial part of its property.
(b) Early Termination with Notice. The Recipient may terminate this Agreement or one or more of the Services, in whole or in part, at any time and for any reason by providing the Provider at least thirty (30) days prior written notice.
(c) Early Termination for Convenience. This Agreement may be terminated at any time by mutual written agreement of the Parties.
ARTICLE V
MUTUAL INDEMNIFICATION AND LIMITATION OF LIABILITY
5.1 Recipient Indemnification. Each Recipient hereby agrees to release, discharge, defend, indemnify and hold the other Party and its Subsidiaries and their respective Representatives, harmless from and against any and all losses, damages, costs, judgments, awards, liabilities, claims of any kind or nature, fines and expenses (including reasonable fees and expenses of attorneys, auditors, consultants and other agents) (“Losses”) to the extent attributable to third-party claims relating to, resulting from or arising out of (a) a material breach by such Recipient of a representation or warranty set forth in Section 2.1 or Section 2.2, as applicable, or (b) such Recipient’s willful misconduct, gross negligence or fraud in connection with this Agreement.
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5.2 Provider Indemnification. Each Provider hereby agrees to release, discharge, defend, indemnify and hold the other Party and its Subsidiaries and their respective Representatives, harmless from and against any and all Losses to the extent attributable to third-party claims relating to, resulting from or arising out of (a) a material breach by such Provider of any of its obligations under this Agreement, (b) such Provider’s willful misconduct, gross negligence or fraud in connection with this Agreement or (c) any security incident or unauthorized access to the systems or data of Provider or its Subsidiaries.
5.3 Indemnification Procedures. Notwithstanding anything to the contrary in this Agreement, the indemnification to be provided under this ARTICLE V shall be governed by the procedures set forth in Section 4.9 of the Separation Agreement.
5.4 CONSEQUENTIAL DAMAGES. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL BE LIABLE IN CONTRACT, TORT, STRICT LIABILITY, WARRANTY OR OTHERWISE, FOR ANY SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES, SUCH AS, BUT NOT LIMITED TO, DELAY, DISRUPTION, LOSS OF PRODUCT, LOSS OF ANTICIPATED PROFITS OR REVENUE, LOSS OF USE OF EQUIPMENT OR SYSTEM, NON-OPERATION OR INCREASED EXPENSE OF OPERATION OF OTHER EQUIPMENT OR SYSTEMS, EQUITY OR DEBT FINANCING COSTS, OR COST OF PURCHASED OR REPLACEMENT EQUIPMENT SYSTEMS OR POWER.
5.5 Liability Limitation. EXCEPT FOR UNPAID SERVICE COSTS, THE AGGREGATE TOTAL LIABILITY OF EACH PARTY AND ITS SUBSIDIARIES TO THE OTHER PARTY AND ITS SUBSIDIARIES ARISING OUT OF, RELATED TO OR IN CONNECTION WITH OR BY REASON OF THIS AGREEMENT OR THE SERVICES HEREUNDER FOR ANY CLAIM OR CLAIMS SHALL NOT EXCEED IN THE AGGREGATE AN AMOUNT EQUAL TO THE TOTAL AMOUNT PAID TO SUCH PARTY FOR ITS PROVISION OF SERVICES PURSUANT TO THIS AGREEMENT; PROVIDED, THAT THE CAP FOR LIABILITY FOR AN EVENT OCCURING DURING THE FIRST TWELVE (12) MONTHS FOLLOWING THE EFFECTIVE DATE SHALL BE THE AMOUNT PAYABLE TO SUCH PARTY FOR SERVICES DURING THE FIRST TWELVE (12) MONTHS OF THIS AGREEMENT.
5.6 Exceptions.
(a) THE EXCLUSIONS AND LIMITATIONS SET FORTH IN SECTION 5.4 AND SECTION 5.5 SHALL NOT LIMIT A PARTY’S LIABILITY RESULTING FROM (i) ITS INDEMNIFICATION OBLIGATIONS UNDER SECTION 5.1 AND SECTION 5.2, OR (ii) ITS FRAUD, GROSS NEGLIGENCE OR INTENTIONAL BREACH OF THIS AGREEMENT.
(b) NOTWITHSTANDING SECTION 5.6(a), IN NO EVENT SHALL A PARTY’S LIABILITY IN RESPECT OF A SECURITY INCIDENT EXCEED THREE (3) TIMES THE LIABILITY LIMITATION SET FORTH IN SECTION 5.5, EXCEPT TO THE EXTENT RESULTING FROM A PARTY’S FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
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ARTICLE VI
SYSTEM ACCESS
If either Party is given access to the other Party’s computer systems or software (collectively, the “Systems”) in connection with the Services, the Party receiving access (the “Accessing Party”) shall comply with all of the other Party’s system security policies, procedures and requirements (the “Security Regulations”) and shall not knowingly or intentionally tamper with, compromise or circumvent any security or audit measures employed by such other Party. The Accessing Party shall access and use only those Systems of the other Party for which it has been granted the right to access and use. Each Party shall use commercially reasonable efforts to ensure that only those of its personnel who are specifically authorized to have access to the Systems of the other Party gain such access and use commercially reasonably efforts to prevent unauthorized access, use, destruction, alteration, or loss of information contained therein, including notifying its personnel of the restrictions set forth in this Agreement and the Security Regulations. During the term of this Agreement pursuant to Article IV and in order to affect an orderly transition related to the services provided for in Schedule A, the Provider and Recipient may be required to access either Party’s Systems to in order to prepare any required filings, reports or any other items as may be required by either Party.
ARTICLE VII
INFORMATION RIGHTS
7.1 Grant of Information Rights. In furtherance of Madison’s obligations to provide, and Madison Air’s interest in receiving, the Services under this Agreement, Madison Air hereby grants to the Madison Information Recipients the right, during the Term, to receive, access and use information relating to the Madison Air Business (the “Covered Information”), including financial statements and reports, budgets and forecasts, operational data, employee and personnel information, information technology systems data, customer and supplier information, and such other books, records, data, reports and information as the Madison Information Recipients may request from time to time to perform the Services and to facilitate an orderly transition of the Madison Air Business in connection with the Separation.
7.2 Scope and Delivery of Information. Madison Air shall, and shall cause its Subsidiaries and their respective officers, directors, employees and agents to, provide the Covered Information to the Madison Information Recipients on a prompt basis following any request therefor, in such form and detail as the Madison Information Recipients may request. Madison Air shall give the Madison Information Recipients and their respective representatives access during normal business hours to Madison Air’s premises, books, records, personnel and systems , subject to any reasonable and customary security, safety and confidentiality policies of Madison Air. Without limiting the foregoing, Madison Air shall provide the Madison Information Recipients with access to Covered Information on a regular and ongoing basis, including through electronic access to relevant systems and databases.
7.3 Confidentiality.
(a) Each Madison Information Recipient acknowledges that the Covered Information may contain material non-public information concerning Madison Air and the Madison Air Business. Each Madison Information Recipient agrees that it will keep confidential and will not disclose or divulge to any third party any Covered Information or any other non-public, confidential or proprietary
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information regarding Madison Air or the Madison Air Business that is received by any Madison Air Information Recipient from Madison Air or from any officer, director, employee, agent or Representative of Madison Air, unless such information: (i) is available or becomes available to the public in general (other than as a result of disclosure by a Madison Information Recipient in violation of this Section 7.3); (ii) is or has been independently developed or conceived by a Madison Information Recipient without use of any non-public, confidential or proprietary information of Madison Air; or (iii) is or has been made known or disclosed to a Madison Information Recipient by a third party without, to the knowledge of the Madison Information Recipient, a breach of any obligation of confidentiality such third party may have to Madison Air (collectively, “Confidential Information”).
(b) Notwithstanding Section 7.3(a), a Madison Information Recipient may disclose Confidential Information: (i) to its Affiliates; (ii) to each of its and its Affiliates’ attorneys, accountants, consultants, advisors and other professionals to the extent necessary to obtain their services in connection with evaluating the Confidential Information or performing or supporting the Services; or (iii) as may be required by law or legal, judicial or regulatory process or requested by any regulatory or self-regulatory authority or examiner; provided that the disclosing Madison Information Recipient takes reasonable steps to minimize the extent of any such required disclosure and, to the extent legally permitted, provides Madison Air with prompt written notice of such requirement prior to making any such disclosure so that Madison Air may seek a protective order or other appropriate remedy.
(c) Upon the expiration or termination of this Agreement (or, with respect to any particular Service, upon the expiration or termination of such Service), the Madison Information Recipients shall, at Madison Air’s election, promptly return or destroy all Confidential Information in their possession or control relating to such terminated Service or, if this Agreement has terminated in its entirety, all Confidential Information; provided that a Madison Information Recipient may retain copies of Confidential Information to the extent required by applicable Law or its bona fide document retention policies, and any Confidential Information so retained shall remain subject to the confidentiality obligations of this Section 7.3.
ARTICLE VIII
DISPUTE RESOLUTION
Without limiting any of the rights of the Parties under this Agreement or under the Separation Agreement, prior to initiating any Suit arising under this Agreement, the Parties shall first attempt in good faith to resolve such dispute in accordance with the provisions of this Article VII. In the event of any dispute, either Party may give notice of such dispute to the other Party and reference this Article VII. Within ten (10) days of receipt of such notice, the Parties shall meet at the working level to discuss the dispute. If following such discussions, the Parties have not resolved the dispute, then within ten (10) Business Days after the conclusion of the working group meeting, the Parties shall meet by telephone or in person, and at least one supervisor of the working group members shall participate. If following such discussion, the dispute is again not resolved, another meeting shall be held in person or by telephone within five (5) Business Days, and members of senior management of each Party shall attend or participate. If the dispute is not resolved following this meeting of senior management personnel, the Parties may initiate any Suit in accordance with Section 8.5 and subject to Section 8.6. Notwithstanding the foregoing, the provisions of this Article VII shall not apply to
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claims regarding, or affect the ability of a Party to seek, specific performance of a covenant set forth in this Agreement.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Data Security and Privacy; Breach Notification.
(a) During the Term, each Provider shall at all times have in place, maintain, and use appropriate administrative, electronic, technical, organizational, and physical information security measures (such as policies, standards, and practices) and other security measures and safeguards commensurate with the size and complexity of the Provider’s business, the level of sensitivity of Personal Information collected, handled, and stored, and the nature of the Provider’s activities under this Agreement, that are reasonably designed for the Provider to:
(1)
comply with applicable Privacy Requirements;
(2)
protect, keep secure, and ensure the security and confidentiality of Personal Information;
(3)
prevent a breach of security relating to, or unauthorized access, or disclosure of Personal Information that is Processed with respect to the Madison Air Business or the IT Assets on which such Personal Information is Processed (a “Security Incident”);
(4)
comply with its obligations under this Agreement; and
(5)
ensure the proper disposal and destruction of Personal Information.
(b) Each Provider shall notify the Recipient within twenty-four (24) hours of such Provider becoming aware of or reasonably suspecting any Security Incident and provide full details about it as soon as possible thereafter. The Provider shall cooperate with the Recipient in every reasonable way to investigate the Security Incident and shall terminate any unauthorized access to affected Personal Information, remediate the Security Incident, and take steps to prevent the reoccurrence thereof, including by developing a plan of remediation that is subject to the Recipient’s reasonable input. Where applicable, the Provider shall provide reasonable assistance to the Recipient to regain possession of the affected Personal Information. The Provider shall reasonably cooperate with the Recipient in the conduct of any investigation of, or litigation involving, third parties related to the Security Incident. The Provider shall discharge all responsibilities set forth in this paragraph at its expense.
8.2 Force Majeure. In the event of an act of God, government order or restraint, war (declared or undeclared) or warlike conditions, act of terrorism, blockade, revolution, strike, lockout, civil commotion, fire, flood, storm, epidemic or any other occurrence beyond a Party’s reasonable control, such Party shall promptly notify the other Party thereof and, so long as such condition shall persist and the Party has utilized commercially reasonable efforts to implement alternative solutions to meet its performance obligations, such Party shall not be liable for the delay in performance of, or the failure to perform, its obligations (other than obligations for payment of amounts due hereunder) under this Agreement caused directly or indirectly thereby.
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8.3 Providers as Independent Contractors. The Parties agree that the Providers shall perform the Services hereunder in the capacity of an independent contractor. Nothing in this Agreement shall be construed to mean or imply that any Provider is a partner, joint venturer, agent or representative of, or otherwise associated with the Recipient or any of their respective Subsidiaries. Neither Madison Air or Madison shall represent to any other Person, nor shall any such Party take any action in connection with this Agreement from which any other Person could reasonably infer, that Madison or any of its Subsidiaries, on the one hand, is a partner, joint venturer, agent or representative of, or otherwise associated with, Madison Air or any of its Subsidiaries, on the other hand. No fiduciary duty shall arise from the relationship created by this Agreement.
8.4 Notices. Any notice, request, demand, waiver, consent, approval or other communication which is required or given hereunder shall be in writing and shall be deemed given: (a) on the date established by the sender as having been delivered personally, (b) on the date delivered by a private courier or overnight delivery service as established by the sender by evidence obtained from the courier or service or (c) on the date sent by electronic mail, with confirmation of receipt, if sent prior to 5:00 p.m. Central time, or if sent later, then on the next Business Day. Such communications, to be valid, must be addressed as follows (or at such other address or email address as such party shall designate by like notice):
If to Madison, to:
Madison Industries
444 West Lake Street, Suite 4400
Chicago, IL 60606
Attention: Larry Gies
Email: [****]
with a required copy (which shall not constitute notice) to:
Paul Hastings LLP
71 S. Wacker Drive, 45th Floor
Chicago, Illinois 60606
Attention: Brian Richards
Email: [****]
If to Madison Air, to:
Madison Air Solutions Corporation
444 West Lake Street, Suite 4460
Chicago, IL 60606
Attention: John Lavorato
Email: [****]
or to such other address or to the attention of such Person or Persons as the recipient Party has specified by prior written notice to the sending Party (or in the case of counsel, to such other readily ascertainable business address as such counsel may hereafter maintain).
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8.5 Governing Law. This Agreement and the other documents, instruments and agreements specifically referred to herein or delivered pursuant hereto, and all suits, claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate hereto, or the negotiation, execution or performance hereof (including any suit, claim or cause of action based upon, arising out of or related to any representation or warranty made in connection with this Agreement or as an inducement to enter into this Agreement), shall be governed exclusively by the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of laws rules, regulations or provisions (whether of the State of Delaware or any other jurisdiction) that would cause or otherwise result in the application of the laws of any jurisdiction other than the State of Delaware.
8.6 Exclusive Jurisdiction; Service of Process; MUTUAL WAIVER OF JURY TRIAL. Any Suit arising out of or relating to this Agreement or any transaction contemplated hereby or for recognition or enforcement of any judgment related thereto shall be brought exclusively in the Delaware Court of Chancery in New Castle County, or in the event (but only in the event) that such court does not have subject matter jurisdiction over such Suit, the United States District Court for the District of Delaware, or to the extent neither of such courts has subject matter jurisdiction over such Suit the Superior Court of the State of Delaware, and in each case, the appellate courts having jurisdiction of appeals in such courts (collectively, the “Specified Courts”), and each of the Parties hereby irrevocably submits to the exclusive jurisdiction of the Specified Courts for itself and with respect to its property, generally and unconditionally, for the purpose of any such Suit. Each Party irrevocably and unconditionally waives any objection to the laying of venue of any Suit arising out of or relating to this Agreement or the transactions contemplated hereby in the Specified Courts, and hereby irrevocably and unconditionally waives and agrees not to plead or claim in any Specified Court that any such Suit brought in any Specified Court has been brought in an inconvenient forum. The choice of venue set forth in this Section 8.6 is intended by the Parties to be mandatory and not permissive in nature, thereby precluding the possibility of litigation between the Parties with respect to or arising out of this Agreement or the transactions contemplated hereby in any jurisdiction other than those specified in this Section 8.6. A final judgment in any such Suit may be enforced in other jurisdictions by Suit on the judgment or in any other manner provided by Law. Each Party further agrees that service of any process, summons, notice or document by U.S. registered mail to such Party’s respective address set forth herein shall be effective service of process for any such action, suit or proceeding. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF. EACH PARTY FURTHER WAIVES ANY RIGHT TO SEEK TO CONSOLIDATE ANY SUCH SUIT OR OTHER LEGAL PROCEEDING IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER SUIT OR OTHER LEGAL PROCEEDING IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EACH PARTY FURTHER CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED OR WARRANTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH PARTY HAS BEEN
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INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.6.
8.7 Severability. Any provision of this Agreement which is invalid or unenforceable in any jurisdiction shall be ineffective solely to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not, to the fullest extent permitted by law, invalidate or render unenforceable such provision in any other jurisdiction. Upon such determination that any term or other provision is invalid or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner so that the transactions contemplated hereby are fulfilled to the greatest extent possible.
8.8 Amendments and Waivers. Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by Madison and Madison Air, or in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any Party in exercising any right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
8.9 Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns, but will not be assignable or delegable by any Party without the prior written consent of the other Parties, except that either Party may assign this Agreement without the other Party’s consent a to any of its Subsidiaries, provided the assigning Party remains liable for the assignee’s performance of this Agreement. Any assignment in violation of the foregoing will be null and void ab initio and of no force and effect.
8.10 Counterparts. This Agreement may be executed in counterparts, and any Party may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. This Agreement shall become effective when each Party shall have received a counterpart hereof signed by the other Party. The Parties agree that the delivery of this Agreement and any other agreements and documents executed and delivered concurrently with the execution and delivery of this Agreement, may be effected by means of an exchange of facsimile signatures or other electronic delivery (including DocuSign).
8.11 Captions; Interpretation. All captions contained in this Agreement are for convenience of reference only, do not form a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. Unless the context of this Agreement otherwise requires, (a) words in the singular or plural include the singular and plural, and pronouns stated in either the masculine, the feminine or neuter gender shall include the masculine, feminine and neuter, (b) the terms “hereof,” “herein,” “hereby,” “hereto,” and derivative or similar words refer to this entire Agreement including Schedule A, and (c) all references to Sections are to the Sections of this Agreement.
[Signature page follows]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the Parties as of and on the date first set forth above.
MADISON INDUSTRIES INTERNATIONAL HOLDINGS LLC:
By:
/s/ Larry Gies
Name:
Larry Gies
Title:
President and Chief Executive Officer
MADISON AIR SOLUTIONS CORPORATION:
By:
/s/ Jill Wyant
Name:
Jill Wyant
Title:
President and Chief Executive Officer
EX-10.5
EX-10.5
Filename: ck0002098430-ex10_5.htm · Sequence: 10
EX-10.5
Exhibit 10.5
LOCK-UP AGREEMENT
Madison Air Solutions Corporation
Lock-Up Agreement
April 15, 2026
Madison Air Solutions Corporation
444 W. Lake Street, Suite 4460
Chicago, IL 60606
Attn: General Counsel
Re: Madison Air Solutions Corporation - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that Madison Air Solutions Corporation, a Delaware corporation (the “Company”), is contemplating effecting a public offering (the “Public Offering”) of shares (the “Shares”) of the Class A common stock, par value $0.0000001 per share, of the Company pursuant to a Registration Statement on Form S-1 (the “Registration Statement”) filed with the U.S. Securities and Exchange Commission (the “SEC”). As used herein, the term “Common Stock” refers to shares of the Company’s Class B Common Stock, par value $0.0000001 per share owned by the undersigned on the date hereof and any securities issued by the Company in connection therewith, whether upon conversion to shares of the Company’s Class A Common Stock, par value $0.0000001 per share, as a dividend, in a stock split or otherwise.
In consideration of the undertaking by the Company to offer and sell Shares in the Public Offering, and of other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the undersigned agrees that, during the period beginning from the date of this Lock-Up Agreement and continuing to and including the date two (2) years after the date of the final prospectus relating to the Public Offering (the “Prospectus”) (such period, the “Lock-Up Period”), the undersigned shall not (i) offer, sell, contract to sell, pledge, grant any option, right or warrant to purchase, purchase any option or contract to sell, lend or otherwise transfer or dispose of any shares of Common Stock, or any options or warrants to purchase any shares of Common Stock, or any securities convertible into, exchangeable for or that represent the right to receive shares of Common Stock (such shares of Common Stock, options, rights, warrants or other securities, collectively, “Lock-Up Securities”), including, without limitation, any such Lock-Up Securities currently beneficially owned (as such term is used in Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (ii) engage in any hedging or other transaction or arrangement (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination thereof, forward, swap or any other derivative transaction or instrument, however described or defined) which is designed to or which reasonably could be expected to lead to or result in a sale, loan, pledge or other disposition (whether by the undersigned or someone other than the undersigned), or transfer of any of the economic consequences of ownership, in whole or in part, directly or indirectly, of any Lock-Up Securities, whether any such transaction or arrangement (or instrument provided for thereunder) would be settled by delivery of Common Stock or other securities, in cash or otherwise (any such sale, loan, pledge or other disposition, or transfer of economic consequences, a “Transfer”), (iii) make any demand for or exercise any right with respect to the registration of any Lock-Up
Securities or (iv) otherwise publicly announce any intention to engage in or cause any action, activity, transaction or arrangement described in clause (i), (ii) or (iii) above. The undersigned represents and warrants that the undersigned is currently a party to any agreement or arrangement that provides for, is designed to, or reasonably could be expected to lead to, or result in, any Transfer during the Lock-Up Period.
Notwithstanding anything set forth herein to the contrary, the undersigned may otherwise Transfer Lock-Up Securities (a) pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction that is approved by the Board of Directors of the Company and made to all holders of the Company’s capital stock involving a Change of Control of the Company (for purposes hereof, “Change of Control” shall mean the transfer (whether by tender offer, merger, consolidation or other similar transaction), in one transaction or a series of related transactions, to a person or group of affiliated persons, of shares of capital stock if, after such transfer, such person or group of affiliated persons would hold at least a majority of the outstanding voting securities of the Company (or the surviving entity)); provided that in the event that such tender offer, merger, consolidation or other similar transaction is not completed, the undersigned’s Lock-Up Securities shall remain subject to the provisions of this Lock-Up Agreement, or (b) to an affiliate or a member of the undersigned if such transferee executes a Lock-Up Agreement in the same form as this Lock-Up Agreement, which Lock-Up Agreement would terminate at the end of the Lock-Up Period.
The undersigned now has, and, except as contemplated by the foregoing paragraph, for the duration of this Lock-Up Agreement (subject to the transfers permitted by the immediately preceding paragraph) will have, good and marketable title to the undersigned’s Lock-Up Securities, free and clear of all liens, encumbrances and claims whatsoever. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s Lock-Up Securities (subject to the transfers permitted by the immediately preceding paragraph).
The undersigned acknowledges and agrees that the Company has not made any recommendation or provided any investment or other advice to the undersigned with respect to this Lock-Up Agreement or the subject matter hereof, and the undersigned has consulted its own legal, accounting, financial, regulatory, tax and other advisors with respect to this Lock-Up Agreement and the subject matter hereof to the extent the undersigned has deemed appropriate. The undersigned further acknowledges and agrees that the Company has not made and is not making a recommendation to the undersigned to enter into this Lock-Up Agreement or to transfer, sell or dispose of, or to refrain from transferring, selling or disposing of, any shares of Common Stock, and nothing set forth in such disclosures or herein is intended to suggest that the Company is making such a recommendation.
This Lock-Up Agreement shall automatically terminate and the undersigned shall be released from all of its obligations hereunder upon the earlier of (i) the date on which the Registration Statement filed with the SEC with respect to the Public Offering is withdrawn, (ii) the date on which the Company notifies the undersigned in writing that it does not intend to proceed with the Public Offering and (iii) December 31, 2026, in the event that the Registration Statement filed with the SEC with respect to the Public Offering has not been declared effective; provided, however, that the Company may, by written notice to the undersigned prior to such date, extend such date by a period of up to an additional 90 days. The undersigned acknowledges and agrees that this Lock-Up Agreement is in addition to, and not in lieu of, any lock-up agreement entered into by the undersigned with the underwriters in connection with the Public Offering, and the
restrictions and obligations set forth herein shall be separate from and in addition to any restrictions and obligations set forth in any such lock-up agreement with the underwriters.
The undersigned understands that the Company is relying upon this Lock-Up Agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns. The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. This Lock-Up Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflict of laws that would result in the application of any law other than the laws of the State of New York. This Lock-Up Agreement may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com or www.echosign.com) or other transmission method, and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[Signature Page Follows]
Very truly yours,
MADISON INDUSTRIES HOLDINGS LLC
By:
/s/ Larry Gies
(duly authorized signature)
Name:
Larry Gies
(please print full name)
Title:
President and Chief Executive Officer
(please print full title)
[Signature Page to Lock-Up Agreement]
EX-10.6
EX-10.6
Filename: ck0002098430-ex10_6.htm · Sequence: 11
EX-10.6
Exhibit 10.6
LOCK-UP AGREEMENT
Madison Air Solutions Corporation
Lock-Up Agreement
April 15, 2026
Madison Air Solutions Corporation
444 W. Lake Street, Suite 4460
Chicago, IL 60606
Attn: General Counsel
Re: Madison Air Solutions Corporation - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that Madison Air Solutions Corporation, a Delaware corporation (the “Company”), is contemplating effecting a public offering (the “Public Offering”) of shares (the “Shares”) of the Class A common stock, par value $0.0000001 per share, of the Company (the “Class A Common Stock”) pursuant to a Registration Statement on Form S-1 (the “Registration Statement”) filed with the U.S. Securities and Exchange Commission (the “SEC”). As used herein, the term “Common Stock” refers to shares of the Company’s Class A Common Stock, par value $0.0000001 per share as may be received by the undersigned pursuant to the Contribution and Exchange Agreement among the undersigned, the Company and Madison IAQ Holdings LLC dated as of April 15, 2026 (the "Contribution and Exchange Agreement") and any securities issued by the Company in connection therewith, whether as a dividend, in a stock split or otherwise.
In consideration of the undertaking by the Company to offer and sell Shares in the Public Offering, and of other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the undersigned agrees that, during the period beginning from the date of this Lock-Up Agreement and continuing to and including the date two (2) years after the date of the final prospectus relating to the Public Offering (the “Prospectus”) (such period, the “Lock-Up Period”), the undersigned shall not, and shall not cause or direct any of its affiliates to, (i) offer, sell, contract to sell, pledge, grant any option, right or warrant to purchase, purchase any option or contract to sell, lend or otherwise transfer or dispose of any shares of Common Stock, or any options or warrants to purchase any shares of Common Stock, or any securities convertible into, exchangeable for or that represent the right to receive shares of Common Stock (such shares of Common Stock, options, rights, warrants or other securities, collectively, “Lock-Up Securities”), including, without limitation, any such Lock-Up Securities currently beneficially owned (as such term is used in Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (ii) engage in any hedging or other transaction or arrangement (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination thereof, forward, swap or any other derivative transaction or instrument, however described or defined) which is designed to or which reasonably could be expected to lead to or result in a sale, loan, pledge or other disposition (whether by the undersigned or someone other than the undersigned), or transfer of any of the economic consequences of ownership, in whole or in part, directly or indirectly, of any Lock-Up Securities, whether any such transaction or arrangement (or instrument provided for thereunder) would be settled by delivery of Common Stock or other securities, in cash or otherwise (any such sale, loan, pledge or other disposition, or transfer of economic consequences, a “Transfer”), (iii) make any demand for or exercise any right with respect to the registration of any Lock-Up Securities or (iv) otherwise publicly announce any intention to engage in or cause any action, activity, transaction or arrangement described in clause (i), (ii) or (iii) above. The undersigned represents and warrants that the undersigned is not, and has not caused or directed any of its affiliates to be or become, currently a party to any agreement or arrangement that provides for, is designed to or reasonably could be expected to lead to or result in any Transfer during the Lock-Up Period.
In addition, the undersigned covenants and agrees that neither the undersigned nor any affiliate of the undersigned will effect a Transfer, or consent to or approve a Transfer, of direct or indirect interests in the undersigned which, in any case, results in a change to the ultimate beneficial ownership of any Lock-Up Securities, unless the Company first determines in good faith based on written legal advice provided to the Company that such Transfer would not result in a material tax detriment to Company or its members or its subsidiaries or to Madison Industries Holdings LLC, its members or its subsidiaries relating to a certain restructuring effected in connection with the Public Offering and transactions relating thereto, including the tax-free distribution of certain affiliates; provided, however, that the foregoing restrictions shall not apply to: (a) any Transfer of minority interests in the undersigned to one or more employees of the undersigned or affiliates of the undersigned, provided that the aggregate value of all such Transfers in respect of the undersigned’s combined holding of Common Stock and interests in Madison Industries Holdings LLC, do not exceed $15 million (based on the value of Common Stock determined in reference to the 31 December 2024 NAV of Madison Industries Holdings LLC and/or Madison IAQ Holdings LLC); or (b) any Transfer in respect of which none of the undersigned or any affiliate of the undersigned have any discretion and do not effect, consent to or approve, including without limitation any Transfer which none of the undersigned or any affiliate of the undersigned have any discretion and do not effect, consent to or approve and which: (i) occurs as a result of death, (ii) occurs pursuant to any contractual obligation entered into prior to the date of this Lock-Up Agreement or (iii) is required to be effected to comply with applicable law or regulation, other than, in each case, as required by any contractual obligation entered into prior to the date of this Lock-Up Agreement.
Notwithstanding anything set forth herein to the contrary, the undersigned may otherwise Transfer Lock-Up Securities: (a) to an affiliate of the undersigned, if (i) the Company first determines in good faith based on written legal advice provided to the Company that such Transfer would not result in a material tax detriment to the Company or any of its subsidiaries or to any of its affiliates, including Madison Industries Holdings LLC, or any member or subsidiary thereof relating to a restructuring effected in connection with the Public Offering and transactions relating thereto, including the tax-free distribution of certain affiliates, and (ii) such transferee executes a Lock-Up Agreement in the same form as this Lock-Up Agreement, or (b) pursuant to and in accordance with the Tag-Along Right granted in favor of the undersigned by Madison Industries Holdings LLC pursuant to a letter agreement entered into in connection with this Lock-Up Agreement by Madison Industries Holdings LLC, the undersigned and KC Armada LP.
The undersigned now has, and, except as contemplated by the foregoing paragraph, for the duration of this Lock-Up Agreement will have, good and marketable title to the undersigned’s Lock-Up Securities, free and clear of all liens, encumbrances and claims whatsoever. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s Lock-Up Securities except in compliance with the foregoing restrictions.
The undersigned acknowledges and agrees that the Company has not made any recommendation or provided any investment or other advice to the undersigned with respect to this Lock-Up Agreement or the subject matter hereof, and the undersigned has consulted its own legal, accounting, financial, regulatory, tax and other advisors with respect to this Lock-Up Agreement and the subject matter hereof to the extent the undersigned has deemed appropriate. The undersigned further acknowledges and agrees that the Company has not made and is not making a recommendation to the undersigned to enter into this Lock-Up Agreement or to transfer, sell or dispose of, or to refrain from transferring, selling or disposing of, any shares of Common Stock, and nothing set forth in such disclosures or herein is intended to suggest that the Company is making such a recommendation.
The restrictions set forth in this Lock-Up Agreement shall not apply to the Contribution and Exchange (as defined in the Contribution and Exchange Agreement).
This Lock-Up Agreement shall automatically terminate and the undersigned shall be released from all of its obligations hereunder upon the earlier of (i) the date on which the Registration Statement filed with the SEC with respect to the Public Offering is withdrawn, (ii) the date on which the Company notifies the undersigned in writing that it does not intend to proceed with the Public Offering and (iii) December 31, 2026, in the event that the Registration Statement filed with the SEC with respect to the Public Offering has not been declared effective; provided, however, that the Company may, by written notice to the undersigned prior to such date, extend such date by a period of up to an additional 90 days. The undersigned acknowledges and agrees that this Lock-Up Agreement is in addition to, and not in lieu of, any lock-up agreement entered into by the undersigned with the underwriters in connection with the Public Offering, and the restrictions and obligations set forth herein shall be separate from and in addition to any restrictions and obligations set forth in any such lock-up agreement with the underwriters.
The undersigned understands that the Company is relying upon this Lock-Up Agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns. The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. This Lock-Up Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflict of laws that would result in the application of any law other than the laws of the State of New York. This Lock-Up Agreement may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com or www.echosign.com) or other transmission method, and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[Signature Page Follows]
Very truly yours,
Kedge Capital Principal Opportunities V LP
acting by its general partner, Kedge Capital
Principal Opportunities V GP Limited
By:
/s/ Remi Beard
(duly authorized signature)
Name:
Remi Beard
(please print full name)
Title:
Director
(please print full title)
By:
/s/ Panicos Papageorgiou
(duly authorized signature)
Name:
Panicos Papageorgiou
(please print full name)
Title:
Director
(please print full title)
[Signature Page to Lock-Up Agreement]
EX-10.7
EX-10.7
Filename: ck0002098430-ex10_7.htm · Sequence: 12
EX-10.7
Exhibit 10.7
LOCK-UP AGREEMENT
Madison Air Solutions Corporation
Lock-Up Agreement
April 15, 2026
Madison Air Solutions Corporation
444 W. Lake Street, Suite 4460
Chicago, IL 60606
Attn: General Counsel
Re: Madison Air Solutions Corporation - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that Madison Air Solutions Corporation, a Delaware corporation (the “Company”), is contemplating effecting a public offering (the “Public Offering”) of shares (the “Shares”) of the Class A common stock, par value $0.0000001 per share, of the Company (the “Class A Common Stock”) pursuant to a Registration Statement on Form S-1 (the “Registration Statement”) filed with the U.S. Securities and Exchange Commission (the “SEC”). As used herein, the term “Common Stock” refers to shares of the Company’s Class A Common Stock, par value $0.0000001 per share as may be received by the undersigned pursuant to the Contribution and Exchange Agreement among the undersigned, the Company and Madison IAQ Holdings LLC dated as of April 15, 2026 (the "Contribution and Exchange Agreement") and any securities issued by the Company in connection therewith, whether as a dividend, in a stock split or otherwise.
In consideration of the undertaking by the Company to offer and sell Shares in the Public Offering, and of other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the undersigned agrees that, during the period beginning from the date of this Lock-Up Agreement and continuing to and including the date two (2) years after the date of the final prospectus relating to the Public Offering (the “Prospectus”) (such period, the “Lock-Up Period”), the undersigned shall not, and shall not cause or direct any of its affiliates to, (i) offer, sell, contract to sell, pledge, grant any option, right or warrant to purchase, purchase any option or contract to sell, lend or otherwise transfer or dispose of any shares of Common Stock, or any options or warrants to purchase any shares of Common Stock, or any securities convertible into, exchangeable for or that represent the right to receive shares of Common Stock (such shares of Common Stock, options, rights, warrants or other securities, collectively, “Lock-Up Securities”), including, without limitation, any such Lock-Up Securities currently beneficially owned (as such term is used in Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (ii) engage in any hedging or other transaction or arrangement (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination thereof, forward, swap or any other derivative transaction or instrument, however described or defined) which is designed to or which reasonably could be expected to lead to or result in a sale, loan, pledge or other disposition (whether by the undersigned or someone other than the undersigned), or transfer of any of the economic consequences of ownership, in whole or in part, directly or indirectly, of any Lock-Up Securities, whether any such transaction or arrangement (or instrument provided for thereunder) would be settled by delivery of Common Stock or other securities, in cash or otherwise (any such sale, loan, pledge or other disposition, or transfer of economic consequences, a “Transfer”), (iii) make any demand for or exercise any right with respect to the registration of any Lock-Up Securities or (iv) otherwise publicly announce any intention to engage in or cause any action, activity, transaction or arrangement described in clause (i), (ii) or (iii) above. The undersigned represents and warrants that the undersigned is not, and has not caused or directed any of its affiliates to be or become, currently a party to any agreement or arrangement that provides for, is designed to or reasonably could be expected to lead to or result in any Transfer during the Lock-Up Period.
In addition, the undersigned covenants and agrees that neither the undersigned nor any affiliate of the undersigned will effect a Transfer, or consent to or approve a Transfer, of direct or indirect interests in the undersigned which, in any case, results in a change to the ultimate beneficial ownership of any Lock-Up Securities, unless the Company first determines in good faith based on written legal advice provided to the Company that such Transfer would not result in a material tax detriment to Company or its members or its subsidiaries or to Madison Industries Holdings LLC, its members or its subsidiaries relating to a certain restructuring effected in connection with the Public Offering and transactions relating thereto, including the tax-free distribution of certain affiliates; provided, however, that the foregoing restrictions shall not apply to any Transfer in respect of which none of the undersigned or any affiliate of the undersigned have any discretion and do not effect, consent to or approve, including without limitation any Transfer which none of the undersigned or any affiliate of the undersigned have any discretion and do not effect, consent to or approve and which: (i) occurs as a result of death, (ii) occurs pursuant to any contractual obligation entered into prior to the date of this Lock-Up Agreement or (iii) is required to be effected to comply with applicable law or regulation, other than, in each case, as required by any contractual obligation entered into prior to the date of this Lock-Up Agreement.
Notwithstanding anything set forth herein to the contrary, the undersigned may otherwise Transfer Lock-Up Securities: (a) to an affiliate of the undersigned, if (i) the Company first determines in good faith based on written legal advice provided to the Company that such Transfer would not result in a material tax detriment to the Company or any of its subsidiaries or to any of its affiliates, including Madison Industries Holdings LLC, or any member or subsidiary thereof relating to a restructuring effected in connection with the Public Offering and transactions relating thereto, including the tax-free distribution of certain affiliates, and (ii) such transferee executes a Lock-Up Agreement in the same form as this Lock-Up Agreement, or (b) pursuant to and in accordance with the Tag-Along Right granted in favor of the undersigned by Madison Industries Holdings LLC pursuant to a letter agreement entered into in connection with this Lock-Up Agreement by Madison Industries Holdings LLC, the undersigned and Kedge Capital Principal Opportunities V LP.
The undersigned now has, and, except as contemplated by the foregoing paragraph, for the duration of this Lock-Up Agreement will have, good and marketable title to the undersigned’s Lock-Up Securities, free and clear of all liens, encumbrances and claims whatsoever. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s Lock-Up Securities except in compliance with the foregoing restrictions.
The undersigned acknowledges and agrees that the Company has not made any recommendation or provided any investment or other advice to the undersigned with respect to this Lock-Up Agreement or the subject matter hereof, and the undersigned has consulted its own legal, accounting, financial, regulatory, tax and other advisors with respect to this Lock-Up Agreement and the subject matter hereof to the extent the undersigned has deemed appropriate. The undersigned further acknowledges and agrees that the Company has not made and is not making a recommendation to the undersigned to enter into this Lock-Up Agreement or to transfer, sell or dispose of, or to refrain from transferring, selling or disposing of, any shares of Common Stock, and nothing set forth in such disclosures or herein is intended to suggest that the Company is making such a recommendation.
The restrictions set forth in this Lock-Up Agreement shall not apply to the Contribution and Exchange (as defined in the Contribution and Exchange Agreement).
This Lock-Up Agreement shall automatically terminate and the undersigned shall be released from all of its obligations hereunder upon the earlier of (i) the date on which the Registration Statement filed with the SEC with respect to the Public Offering is withdrawn, (ii) the date on which the Company notifies the undersigned in writing that it does not intend to proceed with the Public Offering and (iii) December 31, 2026, in the event that the Registration Statement filed with the SEC with respect to the Public Offering has not been declared effective; provided, however, that the Company may, by written notice to the undersigned prior to such date, extend such date by a period of up to an additional 90 days. The undersigned acknowledges and agrees that this Lock-Up Agreement is in addition to, and not in lieu of, any lock-up agreement entered into by the undersigned with the underwriters in connection with the Public Offering, and the restrictions and obligations set forth herein shall be separate from and in addition to any restrictions and obligations set forth in any such lock-up agreement with the underwriters.
The undersigned understands that the Company is relying upon this Lock-Up Agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns. The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. This Lock-Up Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflict of laws that would result in the application of any law other than the laws of the State of New York. This Lock-Up Agreement may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com or www.echosign.com) or other transmission method, and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[Signature Page Follows]
Very truly yours,
KC Armada LP
acting by its general partner, Kedge Capital PE
FoF GP
By:
/s/ Remi Beard
(duly authorized signature)
Name:
Remi Beard
(please print full name)
Title:
Director
(please print full title)
By:
/s/ Panicos Papageorgiou
(duly authorized signature)
Name:
Panicos Papageorgiou
(please print full name)
Title:
Director
(please print full title)
[Signature Page to Lock-Up Agreement]
EX-10.9
EX-10.9
Filename: ck0002098430-ex10_9.htm · Sequence: 13
EX-10.9
Exhibit 10.9
MADISON AIR SOLUTIONS CORPORATION
2026 OMNIBUS INCENTIVE PLAN
Article I
PURPOSE
The purpose of this Madison Air Solutions Corporation 2026 Omnibus Incentive Plan (this “Plan”) is to promote the success of the Company’s business for the benefit of its stockholders by enabling the Company to offer Eligible Individuals cash and stock‑based incentives in order to attract, retain, and reward such individuals and strengthen the mutuality of interests between such individuals and the Company’s stockholders. This Plan is effective as of the date set forth in Article XV.
Article II
DEFINITIONS
For purposes of this Plan, the following terms shall have the following meanings:
2.1 “Affiliate” means a corporation or other entity controlled by, controlling, or under common control with the Company. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of such Person, whether through the ownership of voting or other securities, by contract or otherwise.
2.2 “Applicable Law” means the requirements relating to the administration of equity-based awards and the related shares under U.S. state corporate law, U.S. federal and state securities laws, the rules or requirements of any stock exchange or quotation system on which the shares are listed or quoted, and any other applicable laws, including tax laws, of any U.S. or non-U.S. jurisdictions where Awards are, or will be, granted under this Plan.
2.3 “Award” means any award under this Plan of any Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Units, Dividend Equivalent Rights, Performance Award, Other Stock-Based Award, or Cash Award. All Awards shall be evidenced by and subject to the terms of an Award Agreement and this Plan.
2.4 “Award Agreement” means the written or electronic agreement, contract, certificate, or other instrument or document evidencing the terms and conditions of an individual Award. Each Award Agreement shall be subject to the terms and conditions of this Plan.
2.5 “Board” means the Board of Directors of the Company.
2.6 “Cash Award” means an Award granted pursuant to Section 10.3 of this Plan and payable in cash at such time or times and subject to such terms and conditions as determined by the Committee in its sole discretion.
2.7 “Cause” means, unless otherwise determined by the Committee in the applicable Award Agreement, with respect to a Participant’s Termination of Service, the following: (a) with respect to a Participant employed pursuant to a written employment agreement, offer letter, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Participant at the time of the grant of the Award that includes a definition of “Cause” (or words of like import), “Cause” as defined in that agreement or (b) with respect to any other Participant, the occurrence of any of the following: (i) the Participant’s commission of, or plea of guilty or nolo contendere to, any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof or under the laws of any other jurisdiction, (ii) the Participant’s actual or attempted commission of, or participation in, a fraud or theft against the Company or an Affiliate or any client of the Company or an Affiliate, (iii) the Participant’s engagement in misconduct that causes, or could reasonably be expected to cause, any harm to the Company or an Affiliate, (iv) the Participant’s gross negligence, willful misconduct, breach of fiduciary duty, theft or embezzlement with respect to the Company or an Affiliate, (v) the Participant’s repeated failure to substantially perform the Participant’s duties and responsibilities to the Company or an Affiliate (other than failure resulting from such Participant’s Disability), or (vi) the Participant’s material violation of any contract or agreement between the Participant and the Company or an Affiliate or any written policy of the Company or an Affiliate or any provision of the code of business conduct and ethics (including any successor thereto) or any other code of conduct established by the Company or an Affiliate to which such Participant is subject.
2.8 “Change in Control” means and includes each of the following, unless otherwise determined by the Committee in the applicable Award Agreement or other written agreement with a Participant approved by the Committee:
(a) any Person (other than the Company, any trustee or other fiduciary holding securities under any employee benefit plan of the Company, or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the Company) becomes the beneficial owner (as defined in Rule 13d‑3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then-outstanding securities, excluding for purposes herein, acquisitions pursuant to a Business Combination (as defined below) that does not constitute a Change in Control as defined in Section 2.8(b);
(b) a merger, reorganization, or consolidation of the Company or in which equity securities of the Company are issued (each, a “Business Combination”), other than a merger, reorganization or consolidation after which the voting securities of the Company outstanding immediately prior thereto continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its direct or indirect parent) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity (or, as applicable, a direct or indirect parent of the Company or such surviving entity) outstanding immediately after such merger, reorganization or consolidation; provided, however,
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that a merger, reorganization or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person (other than those covered by the exceptions in Section 2.8(a)) acquires more than 50% of the combined voting power of the Company’s then-outstanding securities shall not constitute a Change in Control;
(c) during the period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new director(s) (other than a director designated by a Person who has entered into an agreement with the Company to effect a transaction described in Sections 2.8(a) or (b)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or
(d) a complete liquidation or dissolution of the Company or the consummation of a sale or disposition by the Company of all or substantially all of the Company’s assets other than the sale or disposition of all or substantially all of the assets of the Company to a Person or Persons who beneficially own, directly or indirectly, 50% or more of the combined voting power of the outstanding voting securities of the Company at the time of the sale.
For purposes of this Section 2.8, acquisitions of securities of the Company by Madison Industries Holdings LLC, any of its Affiliates, or any investment vehicle or fund controlled by or managed by, or otherwise affiliated with, Madison Industries Holdings LLC shall not constitute a Change in Control. Notwithstanding the foregoing, with respect to any Award that is characterized as “nonqualified deferred compensation” within the meaning of Section 409A of the Code, an event shall not be considered to be a Change in Control under this Plan for purposes of payment of such Award unless such event is also a “change in ownership,” a “change in effective control,” or a “change in the ownership of a substantial portion of the assets” of the Company within the meaning of Section 409A of the Code.
2.9 “Change in Control Price” means the highest price per Share paid in any transaction related to a Change in Control as determined by the Committee in its discretion.
2.10 “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time. Any reference to any section of the Code shall also be a reference to any successor provision and any guidance and treasury regulation promulgated thereunder.
2.11 “Committee” means any committee of the Board duly authorized by the Board to administer this Plan; provided, however, that unless otherwise determined by the Board, the Committee shall consist solely of two or more members of the Board who are each (a) a “non-employee director” within the meaning of Rule 16b-3(b) and (b) “independent” under the listing standards or rules of the securities exchange upon which the Common Stock is traded, but only to the extent that such independence is required in order to take the action at issue pursuant to such standards or rules. If no committee is duly authorized by the Board to administer this Plan, the term “Committee” shall be deemed to refer to the Board for all purposes under this Plan. The Board may abolish any Committee or re-vest in itself any previously delegated authority from time to time, and will retain the right to exercise the authority of the Committee to the extent consistent with Applicable Law.
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2.12 “Common Stock” means the Class A common stock, par value $0.0000001 per share, of the Company.
2.13 “Company” means Madison Air Solutions Corporation, a Delaware corporation, and its successors by operation of law.
2.14 “Consultant” means any natural person who is an advisor or consultant or other service provider to the Company or any of its Affiliates.
2.15 “Data” has the meaning set forth in Section 14.17.
2.16 “Disability” means, unless otherwise determined by the Committee in the applicable Award Agreement, with respect to a Participant’s Termination of Service, that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment, after accounting for reasonable accommodations (if applicable and required by Applicable Law); provided, however, for purposes of an Incentive Stock Option, the term Disability shall have the meaning ascribed to it under Section 22(e)(3) of the Code. The determination of whether an individual has a Disability shall be determined by the Committee, and the Committee may rely on any determination that a Participant is disabled for purposes of benefits under any long-term disability plan in which a Participant participates that is maintained by the Company or any Affiliate.
2.17 “Dividend Equivalent Rights” means a right granted to a Participant under this Plan to receive the equivalent value (in cash or Shares) of regular cash dividends paid on Shares (which, for clarity, do not include any extraordinary cash dividends).
2.18 “EAR Plan” means the Third Amended and Restated Madison Air Solutions Corporation Equity Appreciation Plan, as amended from time to time.
2.19 “Effective Date” means the effective date of this Plan as defined in Article XV.
2.20 “Eligible Employee” means each employee of the Company or any of its Affiliates. An employee on a leave of absence may be an Eligible Employee.
2.21 “Eligible Individual” means an Eligible Employee, Non-Employee Director, or Consultant who is designated by the Committee in its discretion as eligible to receive Awards subject to the terms and conditions set forth herein.
2.22 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time. Reference to a specific section of the Exchange Act or regulation thereunder shall include such section or regulation, any valid regulation or interpretation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing, or superseding such section or regulation.
2.23 “Fair Market Value” means, for purposes of this Plan, unless otherwise required by any applicable provision of the Code or any regulations issued thereunder, as of any date and except as provided below, the last sales price reported for the Common Stock on the applicable date: (a) as reported on the principal national securities exchange in the United States on which it
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is then traded, listed or otherwise reported or quoted or (b) if the Common Stock is not traded, listed, or otherwise reported or quoted, the Committee shall determine in good faith the Fair Market Value in whatever manner it considers appropriate, taking into account the requirements of Section 409A of the Code (if applicable). For purposes of the grant of any Award, the applicable date shall be the trading day immediately prior to the date on which the Award is granted. For purposes of the exercise of any Award, the applicable date shall be the date a notice of exercise is received by the Committee or, if not a date on which the applicable market is open, the next day that it is open. Notwithstanding the foregoing, with respect to any Award granted on the pricing date of the Company’s initial public offering, the Fair Market Value shall mean the initial public offering price of a Share as set forth in the Company’s final prospectus relating to its initial public offering filed with the Securities and Exchange Commission.
2.24 “Family Member” means “family member” as defined in Section A.1.(a)(5) of the general instructions of Form S-8.
2.25 “Incentive Stock Option” means any Stock Option granted to an Eligible Employee who is an employee of the Company or its Subsidiaries (if any) under this Plan and that is intended to be, and designated as, an “Incentive Stock Option” within the meaning of Section 422 of the Code.
2.26 “Non-Employee Director” means a director on the Board who is not an employee of the Company.
2.27 “Non-Qualified Stock Option” means any Stock Option granted under this Plan that is not an Incentive Stock Option.
2.28 “Other Stock-Based Award” means an Award granted under Article X of this Plan that is valued in whole or in part by reference to, or is payable in or otherwise based on, Shares, but may be settled in the form of Shares or cash.
2.29 “Participant” means an Eligible Individual to whom an Award has been granted pursuant to this Plan.
2.30 “Performance Award” means an Award granted under Article IX of this Plan contingent upon achieving certain Performance Goals.
2.31 “Performance Goals” means goals established by the Committee as contingencies for Awards to vest and/or become exercisable or distributable.
2.32 “Performance Period” means the designated period during which the Performance Goals must be satisfied with respect to the Award to which the Performance Goals relate.
2.33 “Person” means any “person” as such term is used in Sections 13(d) and 14(d) of the Exchange Act.
2.34 “Restricted Stock” means an Award of Shares granted under Article VII of this Plan.
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2.35 “Restricted Stock Unit” means an unfunded, unsecured right to receive, on the applicable settlement date, one Share, an amount in cash or other consideration, in each case, as determined by the Committee, in its sole discretion, to be of equal value as of such settlement date, subject to certain vesting conditions and other restrictions.
2.36 “Restriction Period” has the meaning set forth in Section 7.3(a) with respect to Restricted Stock.
2.37 “Rule 16b-3” means Rule 16b‑3 under Section 16(b) of the Exchange Act as then in effect or any successor provision.
2.38 “Section 409A of the Code” means the nonqualified deferred compensation rules under Section 409A of the Code and any applicable treasury regulations and other official guidance thereunder.
2.39 “Securities Act” means the Securities Act of 1933, as amended, and all rules and regulations promulgated thereunder. Reference to a specific section of the Securities Act or regulation thereunder shall include such section or regulation, any valid regulation or interpretation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing, or superseding such section or regulation.
2.40 “Shares” means shares of Common Stock.
2.41 “Stock Appreciation Right” means a stock appreciation right granted under Article VI of this Plan.
2.42 “Stock Option” or “Option” means any option to purchase Shares granted pursuant to Article VI of this Plan.
2.43 “Subsidiary” means any subsidiary corporation of the Company within the meaning of Section 424(f) of the Code.
2.44 “Substitute Awards” has the meaning set forth in Section 4.2.
2.45 “Surviving Entity” has the meaning set forth in Section 11.2(a).
2.46 “Ten Percent Stockholder” means a Person owning stock representing more than 10% of the total combined voting power of all classes of stock of the Company or its Subsidiaries.
2.47 “Termination of Service” means the termination of the applicable Participant’s employment with, or performance of services for, the Company and its Affiliates. Unless otherwise determined by the Committee, (a) if a Participant’s employment or services with the Company and its Affiliates terminates but such Participant continues to provide services to the Company and its Affiliates in a non-employee capacity, such change in status shall not be deemed a Termination of Service with the Company and its Affiliates, and (b) a Participant employed by, or performing services for, an Affiliate that ceases to be an Affiliate shall also be deemed to have incurred a Termination of Service provided the Participant does not immediately thereafter become an employee of the Company or another Affiliate. Notwithstanding the foregoing provisions of this
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definition, with respect to any Award that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code that is payable upon a termination of employment or services with the Company or any of its Affiliates, a Participant shall not be considered to have experienced a “Termination of Service” unless the Participant has experienced a “separation from service” within the meaning of Section 409A of the Code.
Article III
ADMINISTRATION
3.1 Authority of the Committee. This Plan shall be administered by the Committee. Subject to the terms of this Plan and Applicable Law, the Committee shall have full authority to grant Awards to Eligible Individuals under this Plan. The Committee’s authority shall include the authority to:
(a) determine whether and to what extent Awards, or any combination thereof, are to be granted hereunder to one or more Eligible Individuals;
(b) determine the number of Shares to be covered by each Award granted hereunder;
(c) determine the terms and conditions, not inconsistent with the terms of this Plan, of any Award granted hereunder (including, but not limited to, the exercise or purchase price (if any), any restriction or limitation, any vesting schedule or acceleration thereof, or any forfeiture restrictions or waiver thereof, regarding any Award and the Shares, if any, relating thereto, based on such factors, if any, as the Committee shall determine, in its sole discretion);
(d) determine the amount of cash to be covered by each Award granted hereunder;
(e) determine whether, to what extent, and under what circumstances grants of Options and other Awards under this Plan are to operate on a tandem basis and/or in conjunction with or apart from other awards made by the Company outside of this Plan;
(f) determine whether and under what circumstances an Award may be settled in cash, Shares, other property, or a combination of the foregoing;
(g) determine whether, to what extent and under what circumstances cash, Shares, or other property and other amounts payable with respect to an Award under this Plan shall be deferred either automatically or at the election of the Participant;
(h) modify, waive, amend, or adjust the terms and conditions of any Award, at any time or from time to time, including but not limited to Performance Goals;
(i) determine whether a Stock Option is an Incentive Stock Option or Non‑Qualified Stock Option;
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(j) determine whether to require a Participant, as a condition of the granting of any Award, to not sell or otherwise dispose of Shares acquired pursuant to the exercise or vesting of an Award for a period of time as determined by the Committee, in its sole discretion, following the date of the acquisition of such Award or Shares;
(k) determine any other requirements or conditions not inconsistent with this Plan that must be met for a Participant to receive an Award;
(l) modify, extend, or renew an Award, subject to Article XII and Section 6.8(f) of this Plan; and
(m) determine how the Disability, death, retirement, authorized leave of absence or any other change or purported change in a Participant’s status affects an Award and the extent to which, and the period during which, the Participant, the Participant’s legal representative, conservator, guardian or beneficiary may exercise rights under the Award, if applicable.
3.2 Guidelines. Subject to Article XII of this Plan, the Committee shall have the authority to adopt, alter, and repeal such administrative rules, guidelines, and practices governing this Plan and perform all acts, including the delegation of its responsibilities (to the extent permitted by Applicable Law and applicable stock exchange rules), as it shall, from time to time, deem advisable; to construe and interpret the terms and provisions of this Plan and any Award issued under this Plan (and any agreements or sub-plans relating thereto); and to otherwise supervise the administration of this Plan. The Committee may correct any defect, supply any omission, or reconcile any inconsistency in this Plan or in any agreement relating thereto in the manner and to the extent that it shall deem necessary to effectuate the purpose and intent of this Plan. The Committee may adopt special rules, sub-plans, guidelines, and provisions for persons who are residing in or employed in, or subject to, the taxes of any domestic or foreign jurisdictions to satisfy or accommodate applicable foreign laws or to qualify for preferred tax treatment of such domestic or foreign jurisdictions.
3.3 Decisions Final. Any decision, interpretation, or other action made or taken in good faith by or at the direction of the Company, the Board, or the Committee (or any of its members) arising out of or in connection with this Plan shall be within the absolute discretion of all and each of them, as the case may be, and shall be final, binding, and conclusive on the Company and all employees and Participants and their respective heirs, executors, administrators, successors, and assigns.
3.4 Designation of Consultants/Liability; Delegation of Authority.
(a) The Committee may employ such legal counsel, consultants, and agents as it may deem desirable for the administration of this Plan and may rely upon any opinion received from any such counsel or consultant and any computation received from any such consultant or agent. Expenses incurred by, or at the direction of, the Committee in the engagement of any such counsel, consultant, or agent shall be paid by the Company. The Committee, its members, and any person designated pursuant to this Section 3.4 shall not be liable for any action or determination made in good faith with respect to this Plan. To the maximum extent permitted by Applicable Law, no officer of the Company or member or former member of the Committee or of the Board (or any
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officer, member or manager thereof) shall be liable for any action or determination made in good faith with respect to this Plan or any Award granted under it.
(b) The Committee may delegate any or all of its powers and duties under this Plan to a subcommittee of directors or to any officer of the Company, including the power to perform administrative functions (including executing agreements or other documents on behalf of the Committee) and grant Awards, provided that such delegation does not (i) violate Applicable Law or (ii) result in the loss of an exemption under Rule 16b-3(d)(1) for Awards granted to Participants subject to Section 16 of the Exchange Act in respect of the Company. Upon any such delegation, all references in this Plan to the “Committee” shall, to the extent of such delegation, be deemed to include any subcommittee or officer of the Company to whom such powers have been delegated by the Committee. No such delegation shall limit the right of such subcommittee members or such an officer to receive Awards; provided, however, that such subcommittee members and any such officer may not grant Awards to himself or herself, a member of the Board, or any executive officer of the Company or an Affiliate, or take any action with respect to any Award previously granted to himself or herself, a member of the Board, or any executive officer of the Company or an Affiliate. The Committee may also designate employees or professional advisors who are not executive officers of the Company or members of the Board to assist in administering this Plan, provided, however, that such individuals may not be delegated the authority to grant or modify any Awards.
3.5 Indemnification. To the maximum extent permitted by Applicable Law and to the extent not covered by insurance directly insuring such person, each current and former officer or employee of the Company or any of its Affiliates and each current and former member of the Committee or the Board shall be indemnified and held harmless by the Company against any cost or expense (including reasonable fees of counsel acceptable to the Committee) or liability (including any sum paid in settlement of a claim with the approval of the Committee), and advanced amounts necessary to pay the foregoing at the earliest time and to the fullest extent permitted, arising out of any act or omission to act in connection with the administration of this Plan, except to the extent arising out of such officer’s, employee’s, or member’s own fraud or bad faith. Such indemnification shall be in addition to any right of indemnification that the current or former employee, officer or member may have under Applicable Law or under the by-laws of the Company or any of its Affiliates. Notwithstanding anything else herein, this indemnification will not apply to the actions or determinations made by an individual regarding Awards granted to such individual under this Plan.
Article IV
SHARE LIMITATION
4.1 Shares. The aggregate number of Shares that may be issued pursuant to this Plan shall not exceed 44,003,369 Shares (subject to any increase or decrease pursuant to this Article IV), which may be either authorized and unissued Shares or Shares held in or acquired for the treasury of the Company or both. The number of Shares that may be issued pursuant to this Plan shall be subject to an annual increase on January 1 of each calendar year from and including 2027 through 2036, equal to the lesser of (a) 1.50% of the aggregate number of Shares and shares of Class B common stock, in each case, outstanding on December 31 of the immediately preceding calendar year and (b) such smaller number of Shares as is determined by the Board. The aggregate
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number of Shares that may be issued or used with respect to any Incentive Stock Option shall not exceed 44,003,369 Shares (subject to any increase or decrease pursuant to Section 4.3). Any Award under this Plan settled in cash shall not be counted against the foregoing maximum share limitations. Notwithstanding anything to the contrary contained herein, Shares subject to an Award under this Plan shall again be made available for issuance or delivery under this Plan if such Shares are (i) delivered, withheld or surrendered in payment of the exercise or purchase price of an Award; (ii) delivered, withheld, or surrendered to satisfy any tax withholding obligation; or (iii) subject to a stock-settled Award that expires or is canceled, forfeited, or terminated without issuance of the full number of Shares to which the Award related.
4.2 Substitute Awards. In connection with an entity’s merger or consolidation with the Company or the Company’s acquisition of an entity’s property or stock, the Committee may grant Awards in substitution for any options or other stock or stock-based awards granted before such merger or consolidation by such entity or its affiliate (“Substitute Awards”). Substitute Awards may be granted on such terms as the Committee deems appropriate, notwithstanding limitations on Awards in this Plan. Substitute Awards will not count against the Shares authorized for grant under this Plan (nor shall Shares subject to a Substitute Award be added to the Shares available for Awards under this Plan as provided under Section 4.1 above), except that Shares acquired by exercise of substitute Incentive Stock Options will count against the maximum number of Shares that may be issued pursuant to the exercise of Incentive Stock Options under this Plan, as set forth in Section 4.1 above. Additionally, in the event that a Person acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grants pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under this Plan and shall not reduce the Shares authorized for grant under this Plan (and Shares subject to such Awards shall not be added to the Shares available for Awards under this Plan as provided under Section 4.1 above); provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall be made only to individuals who were not Eligible Employees or Non-Employee Directors prior to such acquisition or combination.
4.3 Adjustments.
(a) The existence of this Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize (i) any adjustment, recapitalization, reorganization, or other change in the Company’s capital structure or its business, (ii) any merger or consolidation of the Company or any Affiliate, (iii) any issuance of bonds, debentures, or preferred or prior preference stock ahead of or affecting the Shares, (iv) the dissolution or liquidation of the Company or any Affiliate, (v) any sale or transfer of all or part of the assets or business of the Company or any Affiliate, or (vi) any other corporate act or proceeding.
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(b) Subject to the provisions of Section 11.1:
(i) If the Company at any time subdivides (by any split, recapitalization or otherwise) the outstanding Shares into a greater number of Shares, or combines (by reverse split, combination, or otherwise) its outstanding Shares into a lesser number of Shares, then (A) the aggregate number or kind of securities that thereafter may be issued under this Plan and (B) the respective exercise prices for outstanding Awards that provide for a Participant-elected exercise and the number of Shares covered by outstanding Awards may be appropriately adjusted by the Committee to prevent dilution or enlargement of the rights granted to, or available for, Participants under this Plan; provided, that the Committee in its sole discretion shall determine whether an adjustment is appropriate.
(ii) Excepting transactions covered by Section 4.3(b)(i), if the Company effects any merger, consolidation, statutory exchange, spin-off, reorganization, sale or transfer of all or substantially all the Company’s assets or business, or other corporate transaction or event in such a manner that the Company’s outstanding Shares are converted into the right to receive (or the holders of Common Stock are entitled to receive in exchange therefor), either immediately or upon liquidation of the Company, securities or other property of the Company or other entity, then, subject to the provisions of Section 11.1, (A) the aggregate number or kind of securities that thereafter may be issued under this Plan, (B) the number or kind of securities or other property (including cash) to be issued pursuant to Awards granted under this Plan (including as a result of the assumption of this Plan and the obligations hereunder by a successor entity, as applicable), and (C) the exercise or purchase price thereof may be appropriately adjusted by the Committee to prevent dilution or enlargement of the rights granted to, or available for, Participants under this Plan; provided, that the Committee in its sole discretion shall determine whether an adjustment is appropriate.
(iii) If there shall occur any change in the capital structure of the Company other than those covered by Section 4.3(b)(i) or 4.3(b)(ii), any conversion, any adjustment, or any issuance of any class of securities convertible or exercisable into, or exercisable for, any class of equity securities of the Company, then the Committee may adjust any Award and make such other adjustments to this Plan to prevent dilution or enlargement of the rights granted to, or available for, Participants under this Plan; provided, that the Committee in its sole discretion shall determine whether an adjustment is appropriate.
(iv) In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other extraordinary transaction or change affecting the Shares or the Share price, including any securities offering or other similar transaction, for administrative convenience, the Committee may refuse to permit the exercise of any Award for up to 60 days before or after such transaction.
(v) The Committee may, in its sole discretion, adjust the Performance Goals applicable to any Awards to reflect any unusual or non-recurring events and other extraordinary items, impact of charges for restructurings, discontinued operations, and the cumulative effects of accounting or tax changes, each as defined by generally accepted accounting principles or as identified in the Company’s financial statements, notes to the financial statements, management’s discussion and analysis, or other Company public filing.
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(vi) Any such adjustment determined by the Committee pursuant to this Section 4.3(b) shall be final, binding, and conclusive on the Company and all Eligible Individuals and Participants and their respective heirs, executors, administrators, successors, and permitted assigns. Any adjustment to, or assumption or substitution of, an Award under this Section 4.3(b) shall be intended to comply with the requirements of Section 409A of the Code and Treasury Regulation §1.424-1 (and any amendments thereto), to the extent applicable. Except as expressly provided in this Section 4.3 or in the applicable Award Agreement, a Participant shall have no additional rights under this Plan by reason of any transaction or event described in this Section 4.3.
4.4 Annual Limit on Non-Employee Director Compensation. In each calendar year during any part of which this Plan is in effect, a Non-Employee Director may not receive Awards for such individual’s service on the Board that, taken together with any cash fees paid to such Non-Employee Director during such calendar year for such individual’s service on the Board, have a value in excess of $750,000 (calculating the value of any such Awards based on the grant date fair value of such Awards for financial reporting purposes); provided, that (a) the Committee may make exceptions to this limit, except that the Non-Employee Director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous decisions involving compensation for Non-Employee Directors and (b) for any calendar year in which a Non-Employee Director (i) first commences service on the Board, (ii) serves on a special committee of the Board, or (iii) serves as lead director or non-executive chair of the Board, such limit shall be increased to $1,000,000; provided, further, that the limits set forth in this Section 4.4 shall be applied without regard to Awards or other compensation, if any, provided to a Non-Employee Director during any period in which such individual serves or served as an employee of the Company or any Affiliate or otherwise provides or provided services to the Company or to any Affiliate other than in the capacity as a Non-Employee Director.
Article V
ELIGIBILITY
5.1 General Eligibility. All current and prospective Eligible Individuals are eligible to be granted Awards. Eligibility for the grant of Awards and actual participation in this Plan shall be determined by the Committee in its sole discretion. No Eligible Individual will automatically be granted any Award under this Plan.
5.2 Incentive Stock Options. Notwithstanding the foregoing, only Eligible Employees who are employees of the Company or its Subsidiaries (if any) are eligible to be granted Incentive Stock Options under this Plan. Eligibility for the grant of an Incentive Stock Option and actual participation in this Plan shall be determined by the Committee in its sole discretion.
5.3 General Requirement. The vesting and exercise of Awards granted to a prospective Eligible Individual are conditioned upon such individual actually being or becoming an Eligible Employee, Consultant, or Non-Employee Director, as applicable.
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Article VI
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
6.1 General. Stock Options or Stock Appreciation Rights may be granted alone or in tandem with other Awards granted under this Plan. Each Stock Option granted under this Plan shall be of one of two types: (a) an Incentive Stock Option or (b) a Non-Qualified Stock Option. Stock Options and Stock Appreciation Rights granted under this Plan shall be evidenced by an Award Agreement and subject to the terms, conditions and limitations in this Plan, including any limitations applicable to Incentive Stock Options.
6.2 Grants. The Committee shall have the authority to grant to any Eligible Individual one or more Incentive Stock Options, Non-Qualified Stock Options, and/or Stock Appreciation Rights; provided, however, that Incentive Stock Options may be granted only to an Eligible Employee who is an employee of the Company or its Subsidiaries. To the extent that any Stock Option does not qualify as an Incentive Stock Option (whether because of its provisions or the time or manner of its exercise or otherwise), such Stock Option or the portion thereof that does not so qualify shall constitute a separate Non-Qualified Stock Option.
6.3 Exercise Price. The exercise price per Share subject to a Stock Option or Stock Appreciation Right shall be determined by the Committee at the time of grant, provided that the per-share exercise price of a Stock Option or Stock Appreciation Right shall not be less than 100% (or, in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, 110%) of the Fair Market Value at the time of grant. Notwithstanding the foregoing, in the case of a Stock Option or Stock Appreciation Right that is a Substitute Award, the exercise price per Share for such Stock Option or Stock Appreciation Right may be less than the Fair Market Value on the date of grant, provided that such exercise price is determined in a manner consistent with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the Code.
6.4 Term. The term of each Stock Option or Stock Appreciation Right shall be fixed by the Committee, provided that no Stock Option or Stock Appreciation Right shall be exercisable more than ten years (or, in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, five years) after the date the Stock Option or Stock Appreciation Right, as applicable, is granted.
6.5 Exercisability. Unless otherwise provided by the Committee in accordance with this Section 6.5, Stock Options and Stock Appreciation Rights granted under this Plan shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee at the time of grant. The Committee may, but shall not be required to, provide for an acceleration of vesting and exercisability upon the occurrence of a specified event in the terms of any Award Agreement. If the exercise of a Non-Qualified Stock Option or Stock Appreciation Right within the permitted time periods is prohibited because such exercise would violate the registration requirements under the Securities Act or any other Applicable Law or the rules of any securities exchange or interdealer quotation system, the Company’s insider trading policy (including any blackout periods) or a “lock-up” agreement entered into in connection with the issuance of securities by the Company, then the expiration of such Non-Qualified Stock Option or Stock Appreciation Right shall be extended until the date that is 30 days after the end of the period during which the exercise of the Non-Qualified Stock Option or Stock Appreciation Right
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would be in violation of such registration requirement or other Applicable Law or rules, blackout period or lock-up agreement, as determined by the Committee; provided, however, that in no event shall any such extension result in any Non-Qualified Stock Option or Stock Appreciation Right remaining exercisable after the ten-year term of the applicable Non-Qualified Stock Option or Stock Appreciation Right.
6.6 Method of Exercise. Subject to any applicable waiting period or exercisability provisions under Section 6.5, a Participant may exercise Stock Options and Stock Appreciation Rights, to the extent vested, in whole or in part at any time during the term of the applicable Stock Option or Stock Appreciation Right, by giving written notice of exercise (which may be electronic) to the Company specifying the number of Stock Options or Stock Appreciation Rights, as applicable, being exercised. Such notice shall be accompanied by payment in full of the exercise price (which shall equal the product of such number of Shares to be purchased multiplied by the applicable exercise price). The exercise price for the Stock Options may be paid upon such terms and conditions as shall be established by the Committee and set forth in the applicable Award Agreement. Without limiting the foregoing, the Committee may establish payment terms for the exercise of Stock Options pursuant to which the Company may withhold a number of Shares that would otherwise be issued to the Participant in connection with the exercise of the Stock Option having a Fair Market Value on the date of exercise equal to the exercise price, or that permit the Participant to deliver cash or Shares with a Fair Market Value equal to the exercise price on the date of payment, or through a simultaneous sale through a broker of Shares acquired on exercise, all as permitted by Applicable Law. No Shares shall be issued until payment therefor, as provided herein, has been made or provided for. Upon the exercise of a Stock Appreciation Right, a Participant shall be entitled to receive, for each right exercised, up to, but no more than, an amount in cash and/or Shares (as chosen by the Committee in its sole discretion) equal in value to the excess of the Fair Market Value of one (1) Share on the date that the right is exercised over the Fair Market Value of one (1) Share on the date that the right was awarded to the Participant.
6.7 Non-Transferability. No Stock Option or Stock Appreciation Right shall be transferable by the Participant other than by will or by the laws of descent and distribution, and all Stock Options and Stock Appreciation Rights shall, during the Participant’s lifetime, be exercisable only by the Participant. Notwithstanding the foregoing, the Committee may determine, in its sole discretion, at the time of grant or thereafter, that a Non-Qualified Stock Option that is otherwise not transferable pursuant to this Section 6.7 is transferable to a Family Member of the Participant in whole or in part and in such circumstances, and under such conditions, as specified by the Committee. A Non-Qualified Stock Option that is transferred to a Family Member pursuant to the preceding sentence (a) may not be subsequently transferred other than by will or by the laws of descent and distribution and (b) remains subject to the terms of this Plan and the applicable Award Agreement. Any Shares acquired upon the exercise of a Non-Qualified Stock Option by a permissible transferee of a Non-Qualified Stock Option or a permissible transferee pursuant to a transfer after the exercise of the Non-Qualified Stock Option shall be subject to the terms of this Plan and the applicable Award Agreement.
6.8 Termination. Unless otherwise determined by the Committee at grant or, if no rights of the Participant are reduced, thereafter, subject to the provisions of the applicable Award Agreement and this Plan, upon a Participant’s Termination of Service for any reason, Stock Options and Stock Appreciation Rights may remain exercisable following a Participant’s Termination of Service as follows:
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(a) Termination by Death or Disability. If a Participant’s Termination of Service is by reason of death or Disability, all Stock Options and Stock Appreciation Rights that are held by such Participant that are vested and exercisable at the time of the Participant’s Termination of Service may be exercised by the Participant (or in the case of the Participant’s death, by the legal representative of the Participant’s estate) at any time within a period of one year from the date of such Termination of Service, but in no event beyond the expiration of the stated term of such Stock Options and Stock Appreciation Rights; provided, however, that, in the event of a Participant’s Termination of Service by reason of Disability, if the Participant dies within such exercise period, all unexercised Stock Options and Stock Appreciation Rights held by such Participant shall thereafter be exercisable, to the extent to which they were exercisable at the time of death, for a period of one year from the date of such death, but in no event beyond the expiration of the stated term of such Stock Options and/or Stock Appreciation Rights.
(b) Involuntary Termination Without Cause and Resignation. If a Participant’s Termination of Service is by involuntary termination by the Company without Cause or if a Participant’s Termination of Service is a resignation, all Stock Options and Stock Appreciation Rights that are held by such Participant that are vested and exercisable at the time of the Participant’s Termination of Service may be exercised by the Participant at any time within a period of 90 days from the date of such Termination of Service, but in no event beyond the expiration of the stated term of such Stock Options or Stock Appreciation Rights.
(c) Termination for Cause. If a Participant’s Termination of Service (i) is for Cause or (ii) is without Cause or is a resignation (as provided in Section 6.8(b)) after the occurrence of an event that would be grounds for a Termination of Service for Cause, all Stock Options and Stock Appreciation Rights, whether vested or not vested, that are held by such Participant shall thereupon immediately terminate and expire as of the date of such Termination of Service.
(d) Unvested Stock Options and Stock Appreciation Rights. Stock Options and Stock Appreciation Rights that are not vested as of the date of a Participant’s Termination of Service for any reason shall terminate and expire as of the date of such Termination of Service.
(e) Incentive Stock Option Limitations. To the extent that the aggregate Fair Market Value (determined as of the time of grant) of the Shares with respect to which Stock Options that are intended to qualify as Incentive Stock Options are exercisable for the first time by an Eligible Employee during any calendar year under this Plan and/or any other stock option plan of the Company or any Subsidiary exceeds $100,000, such Stock Options shall be treated as Non‑Qualified Stock Options. In addition, if an Eligible Employee does not remain employed by the Company or any Subsidiary at all times from the time an Incentive Stock Option is granted until three months prior to the date of exercise thereof (or such other period as required by Applicable Law), such Stock Option shall be treated as a Non-Qualified Stock Option. Should any provision of this Plan not be necessary in order for the Stock Options to qualify as Incentive Stock Options, or should any additional provisions be required, the Committee may amend this Plan accordingly, without the necessity of obtaining the approval of the stockholders of the Company.
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(f) Modification, Extension and Renewal of Stock Options and Stock Appreciation Rights. The Committee may (i) modify, extend, or renew outstanding Stock Options and Stock Appreciation Rights granted under this Plan (provided that the rights of a Participant are not reduced without such Participant’s consent and provided, further that such action does not cause the Stock Options or Stock Appreciation Rights to violate Section 409A of the Code without the consent of the Participant), and (ii) accept the surrender of outstanding Stock Options or Stock Appreciation Rights (to the extent not theretofore exercised) and authorize the granting of new Stock Options or Stock Appreciation Rights in substitution therefor (to the extent not theretofore exercised).
6.9 Automatic Exercise. The Committee may include a provision in an Award Agreement providing for the automatic exercise of a Non-Qualified Stock Option or Stock Appreciation Right on a cashless basis on the last day of the term of such Option or Stock Appreciation Right if the Participant has failed to exercise the Non-Qualified Stock Option or Stock Appreciation Right as of such date, with respect to which the Fair Market Value of the Shares underlying the Non-Qualified Stock Option or Stock Appreciation Right exceeds the exercise price of such Non-Qualified Stock Option or Stock Appreciation Right on the date of expiration of such Option or Stock Appreciation Right, subject to Section 14.4.
6.10 Dividends. No dividends or Dividend Equivalent Rights shall be granted with respect to Stock Options or Stock Appreciation Rights.
6.11 Other Terms and Conditions. As the Committee shall deem appropriate, Stock Options and Stock Appreciation Rights may be subject to additional terms and conditions or other provisions, which shall not be inconsistent with any of the terms of this Plan.
Article VII
RESTRICTED STOCK; RESTRICTED STOCK UNITS
7.1 Awards of Restricted Stock and Restricted Stock Units. Shares of Restricted Stock and Restricted Stock Units may be granted alone or in tandem with other Awards granted under this Plan. The Committee shall determine the Eligible Individuals to whom, and the time or times at which, grants of Restricted Stock and/or Restricted Stock Units shall be made, the number of shares of Restricted Stock or Restricted Stock Units to be awarded, the price (if any) to be paid by the Participant (subject to Section 7.2), the time or times within which such Awards may be subject to forfeiture, the vesting schedule and rights to acceleration thereof, and all other terms and conditions of the Awards. The Committee shall determine and set forth in the Award Agreement the terms and conditions for each Award of Restricted Stock and Restricted Stock Units, subject to the conditions and limitations contained in this Plan, including any vesting or forfeiture conditions.
The Committee may condition the grant or vesting of Restricted Stock and Restricted Stock Units upon the attainment of specified Performance Goals or such other factor as the Committee may determine in its sole discretion.
7.2 Awards and Certificates. Restricted Stock and Restricted Stock Units granted under this Plan shall be evidenced by an Award Agreement and subject to the following terms and conditions and shall be in such form and contain such additional terms and conditions not inconsistent with the terms of this Plan, as the Committee shall deem desirable:
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(a) Restricted Stock.
(i) Purchase Price. The purchase price of Restricted Stock shall be fixed by the Committee. The purchase price for shares of Restricted Stock may be zero to the extent permitted by Applicable Law, and, to the extent not so permitted, such purchase price may not be less than par value.
(ii) Legend. Each Participant receiving Restricted Stock shall be issued a stock certificate in respect of such shares of Restricted Stock, unless the Committee elects to use another system, such as book entries by the Company’s transfer agent, as evidencing ownership of shares of Restricted Stock. Such certificate shall be registered in the name of such Participant, and shall, in addition to such legends required by Applicable Law, bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock.
(iii) Custody. If stock certificates are issued in respect of shares of Restricted Stock, the Committee may require that any stock certificates evidencing such shares be held in custody by the Company until the restrictions thereon shall have lapsed, and that, as a condition of any grant of Restricted Stock, the Participant shall have delivered a duly signed stock power or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate by the Company, which would permit transfer to the Company of all or a portion of the shares subject to the Award of Restricted Stock in the event that such Award is forfeited in whole or part.
(iv) Rights as a Stockholder. Except as provided in Section 7.3(a) and this Section 7.2(a) or as otherwise determined by the Committee in an Award Agreement, the Participant shall have, with respect to the shares of Restricted Stock, all of the rights of a holder of Shares, including, without limitation, the right to receive dividends, the right to vote such shares (to the extent applicable), and, subject to and conditioned upon the full vesting of shares of Restricted Stock, the right to tender such shares; provided that the Award Agreement shall specify on what terms and conditions the applicable Participant shall be entitled to dividends payable on the Shares.
(v) Lapse of Restrictions. If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock, the certificates for such Shares shall be delivered to the Participant. All legends shall be removed from said certificates at the time of delivery to the Participant, except as otherwise required by Applicable Law or other limitations imposed by the Committee.
(b) Restricted Stock Units.
(i) Settlement. The Committee may provide that settlement of Restricted Stock Units will occur upon or as soon as reasonably practical after the Restricted Stock Units vest or will instead be deferred, on a mandatory basis or at the Participant’s election, in a manner intended to comply with Section 409A of the Code.
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(ii) Rights as a Stockholder. A Participant will have no rights of a stockholder with respect to Shares subject to any Restricted Stock Unit unless and until Shares are delivered in settlement of the Restricted Stock Units.
(iii) Dividend Equivalent Rights. If the Committee so provides, a grant of Restricted Stock Units may provide that the Participant will be entitled to receive Dividend Equivalent Rights, subject to the terms of Article VIII.
7.3 Restrictions and Conditions.
(a) Restriction Period.
(i) The Participant shall not be permitted to transfer shares of Restricted Stock awarded under this Plan or vest in Restricted Stock Units during the period or periods set by the Committee (the “Restriction Period”) commencing on the date of such Award, as set forth in the applicable Award Agreement, and such agreement shall set forth a vesting schedule and any event that would accelerate vesting of the Restricted Stock and/or Restricted Stock Units. Within these limits, based on service, attainment of Performance Goals pursuant to Section 7.3(a)(ii), and/or such other factors or criteria as the Committee may determine in its sole discretion, the Committee may condition the grant or provide for the lapse of such restrictions in installments in whole or in part, or may accelerate the vesting of all or any part of any Award of Restricted Stock or Restricted Stock Units and/or waive the deferral limitations for all or any part of any Award of Restricted Stock or Restricted Stock Units.
(ii) If the grant of shares of Restricted Stock or Restricted Stock Units or the lapse of restrictions or vesting schedule is based on the attainment of Performance Goals, the Committee shall establish the objective Performance Goals and the applicable vesting percentage applicable to each Participant or class of Participants in the applicable Award Agreement prior to the beginning of the applicable fiscal year or at such later date as otherwise determined by the Committee and while the outcome of the Performance Goals is substantially uncertain. Such Performance Goals may incorporate provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions (including, without limitation, dispositions and acquisitions), and other similar types of events or circumstances.
(b) Termination. Unless otherwise provided in the applicable Award Agreement or determined by the Committee at grant or, if no rights of the Participant are reduced, thereafter, upon a Participant’s Termination of Service for any reason during the relevant Restriction Period, all Restricted Stock or Restricted Stock Units still subject to restriction will be forfeited in accordance with the terms and conditions established by the Committee at grant or thereafter.
Article VIII
DIVIDEND EQUIVALENT RIGHTS
A Dividend Equivalent Right may be granted hereunder to any Eligible Individual as a component of another Award (other than a Stock Option or Stock Appreciation Right) or as a freestanding award. The terms and conditions of Dividend Equivalent Rights shall be specified in the underlying Award Agreement. Dividend equivalents credited to the holder of a Dividend
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Equivalent Right may be paid currently or may be deemed to be reinvested in additional Shares, which may thereafter accrue additional equivalents. Any such reinvestment shall be at Fair Market Value on the date of reinvestment. Dividend Equivalent Rights may be settled in cash or Stock or a combination thereof, in a single installment or installments, all determined in the sole discretion of the Committee. A Dividend Equivalent Right granted as a component of another Award may provide that such Dividend Equivalent Right shall be settled upon payment of, or lapse of restrictions on, but not exercise of (directly or indirectly), such other Award, and that such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as such other Award.
Article IX
PERFORMANCE AWARDS
The Committee may grant a Performance Award to an Eligible Individual payable upon the attainment of specific Performance Goals either alone or in addition to other Awards granted under this Plan. The Performance Goals to be achieved during the Performance Period and the length of the Performance Period shall be determined by the Committee upon the grant of each Performance Award. The conditions for grant or vesting and the other provisions of Performance Awards (including, without limitation, any applicable Performance Goals) need not be the same with respect to each Participant. Performance Awards may be paid in cash, Shares, other property, or any combination thereof, in the sole discretion of the Committee as set forth in the applicable Award Agreement.
Article X
OTHER STOCK-BASED AND CASH AWARDS
10.1 Other Stock-Based Awards. The Committee is authorized to grant to Eligible Individuals Other Stock‑Based Awards that are payable in, valued in whole or in part by reference to, or otherwise based on or related to Shares, including but not limited to Shares awarded purely as a bonus and not subject to restrictions or conditions, Shares in payment of the amounts due under an incentive or performance plan sponsored or maintained by the Company (including, for the avoidance of doubt, the EAR Plan), stock equivalent units, and Awards valued by reference to the book value of Shares. Other Stock-Based Awards may be granted either alone or in addition to or in tandem with other Awards granted under this Plan.
Subject to the provisions of this Plan, the Committee shall have authority to determine the Eligible Individuals to whom, and the time or times at which, such Other Stock-Based Awards shall be made, the number of Shares to be awarded pursuant to such Awards, and all other conditions of the Awards. The Committee may also provide for the grant of Shares under such Awards upon the completion of a specified Performance Period. The Committee may condition the grant or vesting of Other Stock-Based Awards upon the attainment of specified Performance Goals as the Committee may determine, in its sole discretion.
10.2 Terms and Conditions. Other Stock-Based Awards made pursuant to this Article X shall be evidenced by an Award Agreement and subject to the following terms and conditions and shall be in such form and contain such additional terms and conditions not inconsistent with the terms of this Plan, as the Committee shall deem desirable:
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(a) Non-Transferability. Subject to the applicable provisions of the Award Agreement and this Plan, Shares subject to Other Stock-Based Awards may not be transferred prior to the date on which the Shares are issued or, if later, the date on which any applicable restriction, performance, or deferral period lapses.
(b) Dividends. Unless otherwise determined by the Committee at the time of the grant of an Other Stock-Based Award, subject to the provisions of the Award Agreement and this Plan, the recipient of an Other Stock-Based Award shall not be entitled to receive, currently or on a deferred basis, dividends or Dividend Equivalent Rights in respect of the number of Shares covered by the Other Stock-Based Award.
(c) Vesting. Any Other Stock-Based Award and any Shares covered by any such Other Stock-Based Award shall vest or be forfeited to the extent so provided in the Award Agreement, as determined by the Committee, in its sole discretion.
(d) Price. Shares under this Article X may be issued for no cash consideration, to the extent permitted by Applicable Law. Shares purchased pursuant to a purchase right awarded pursuant to an Other Stock-Based Award shall be priced as determined by the Committee in its sole discretion.
10.3 Cash Awards. The Committee may from time to time grant Cash Awards to Eligible Individuals in such amounts, on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by Applicable Law, as it shall determine in its sole discretion. Cash Awards may be granted subject to the satisfaction of vesting conditions or may be awarded purely as a bonus and not subject to restrictions or conditions, and if subject to vesting conditions, the Committee may accelerate the vesting of such Awards at any time in its sole discretion. The grant of a Cash Award shall not require a segregation of any of the Company’s assets for satisfaction of the Company’s payment obligation thereunder.
Article XI
CHANGE IN CONTROL PROVISIONS
11.1 Benefits. In the event of a Change in Control of the Company, and except as otherwise provided by the Committee in an Award Agreement or any applicable employment agreement, offer letter, consulting agreement, change in control agreement, or similar agreement in effect between the Company or an Affiliate and the Participant, a Participant’s Awards shall be treated in accordance with one or more of the following methods as determined by the Committee:
(a) The Committee, in its sole discretion, may determine that Awards, whether or not then vested, shall be continued, be assumed, or have new rights substituted therefor, in each case in a manner consistent with the requirements of Section 409A of the Code, and that restrictions to which Shares of Restricted Stock or any other Award granted prior to the Change in Control are subject shall not lapse upon a Change in Control and the Restricted Stock or other Award shall, where appropriate in the sole discretion of the Committee, receive the same distribution as other Shares on such terms as determined by the Committee; provided that the Committee may decide to award additional Restricted Stock or other Awards in lieu of any cash distribution. Notwithstanding anything to the contrary herein, for purposes of Incentive Stock
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Options, any assumed or substituted Stock Option shall comply with the requirements of Treasury Regulation Section 1.424-1 (and any amendment thereto).
(b) The Committee, in its sole discretion, may provide for the purchase of any Awards by the Company for an amount of cash and/or property having a value equal to the excess (if any) of the Change in Control Price of the Shares covered by such Awards, over the aggregate exercise price of such Awards; provided, however, that if the exercise price of a Stock Option or Stock Appreciation Right equals or exceeds the Change in Control Price, such Award may be canceled for no consideration; and provided, further, that payment may be in the same form of consideration as is paid to holders of Common Stock (instead of solely in cash).
(c) The Committee may, in its sole discretion, terminate all outstanding and unexercised Stock Options, Stock Appreciation Rights, or Other Stock-Based Award that provides for a Participant-elected exercise, effective as of the date of the Change in Control, by delivering notice of termination to each Participant at least ten days prior to the date of consummation of the Change in Control or such later date as the Committee determines to be reasonable, in which case during the period from the date on which such notice of termination is delivered to the consummation of the Change in Control, each such Participant shall have the right to exercise in full all of such Participant’s Awards that are then outstanding (without regard to any limitations on exercisability otherwise contained in the Award Agreements), but any such exercise shall be contingent on the occurrence of the Change in Control, and, provided that, if the Change in Control does not take place within a specified period after giving such notice for any reason whatsoever, the notice and exercise (and the accelerated right to exercise) pursuant thereto shall be null and void.
(d) Notwithstanding any other provision herein to the contrary, the Committee may, in its sole discretion, provide for accelerated vesting or lapse of restrictions, of all or any portion of a Participant’s Award at any time. For the avoidance of doubt, if the exercise price of a Stock Option or Stock Appreciation Right equals or exceeds the Change in Control Price, such Award may be canceled for no consideration.
Article XII
TERMINATION OR AMENDMENT OF PLAN
Notwithstanding any other provision of this Plan, the Board or the Committee may at any time, and from time to time, amend, in whole or in part, any or all of the provisions of this Plan (including any amendment deemed necessary to ensure that the Company may comply with any Applicable Law), or suspend or terminate it entirely, retroactively or otherwise; provided, however, that, unless otherwise required by Applicable Law or specifically provided herein, the rights of a Participant with respect to Awards granted prior to such amendment, suspension, or termination may not be materially adversely impaired without the consent of such Participant and, provided, further, that without the approval of the holders of the Shares entitled to vote in accordance with Applicable Law, no amendment may be made that would (a) increase the aggregate number of Shares that may be issued under this Plan (except by operation of Section 4.1 or Section 4.3); or (b) materially expand the classes of individuals eligible to receive Awards under this Plan. Notwithstanding anything herein to the contrary, the Board or the Committee may amend this Plan or any Award Agreement at any time without a Participant’s consent to comply with Applicable Law, including Section 409A of the Code. In addition, the Board or the Committee
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shall, without the approval of the holders of the Shares entitled to vote in accordance with Applicable Law and without the consent of the Participants, have the authority to (i) amend any outstanding Option or Stock Appreciation Right to reduce its exercise price per Share or (ii) cancel any Option or Stock Appreciation Right in exchange for cash or another Award. The Committee may amend the terms of any Award theretofore granted, prospectively or retroactively, but, subject to Article IV or as otherwise specifically provided herein, no such amendment or other action by the Committee shall materially impair the rights of any Participant without the Participant’s consent.
Article XIII
UNFUNDED STATUS OF PLAN
This Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payment as to which a Participant has a fixed and vested interest but that is not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any right that is greater than those of a general unsecured creditor of the Company.
Article XIV
GENERAL PROVISIONS
14.1 Legend. The Committee may require each person receiving Shares pursuant to a Stock Option or other Award under this Plan to represent to and agree with the Company in writing that the Participant is acquiring the Shares without a view to distribution thereof. In addition to any legend required by this Plan, the certificates for such Shares may include any legend that the Committee deems appropriate to reflect any restrictions on transfer. All certificates for Shares delivered under this Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed or any national securities exchange system upon whose system the Common Stock is then quoted, and any Applicable Law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. If the Shares are held in book-entry form, then the book-entry will indicate any restrictions on such Shares.
14.2 Other Plans. Nothing contained in this Plan shall prevent the Committee from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required, and such arrangements may be either generally applicable or applicable only in specific cases.
14.3 No Right to Employment/Directorship/Consultancy. Neither this Plan nor the grant of any Award hereunder shall give any Participant or other employee, Consultant or Non-Employee Director any right with respect to continuance of employment, consultancy or directorship by the Company or any Affiliate, nor shall there be a limitation in any way on the right of the Company or any Affiliate by which an employee is employed or a Consultant or Non-Employee Director is retained to terminate such employment, consultancy, or directorship at any time.
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14.4 Withholding of Taxes. A Participant shall be required to pay to the Company or one of its Affiliates, as applicable, or make arrangements satisfactory to the Company regarding the payment of, any income tax, social insurance contribution or other applicable taxes that are required to be withheld in respect of an Award. The Committee may (but is not obligated to), in its sole discretion, permit or require a Participant to satisfy all or any portion of the applicable taxes that are required to be withheld with respect to an Award by (a) the delivery of Shares that (i) are not subject to any pledge or other security interest and (ii) have been both held by the Participant and vested for at least six months (or such other period as established from time to time by the Committee in order to avoid adverse accounting treatment under applicable accounting standards) and (iii) have an aggregate Fair Market Value equal to such withholding liability (or portion thereof); (b) having the Company withhold from the Shares otherwise issuable or deliverable to, or that would otherwise be retained by, the Participant upon the grant, exercise, vesting, or settlement of the Award, as applicable, a number of Shares with an aggregate Fair Market Value equal to the amount of such withholding liability; or (c) by any other means specified in the applicable Award Agreement or otherwise determined by the Committee.
14.5 No Assignment of Benefits. No Award or other benefit payable under this Plan shall, except as otherwise specifically provided in this Plan or under Applicable Law or permitted by the Committee, be transferable in any manner, and any attempt to transfer any such benefit shall be void, and any such benefit shall not in any manner be liable for or subject to the debts, contracts, liabilities, engagements, or torts of any person who shall be entitled to such benefit, nor shall it be subject to attachment or legal process for or against such person.
14.6 Clawbacks; Bad Conduct.
(a) Clawbacks. All awards, amounts, or benefits received or outstanding under this Plan will be subject to clawback, cancellation, recoupment, rescission, payback, reduction, or other similar action in accordance with any Company clawback or similar policy or any Applicable Law related to such actions. A Participant’s acceptance of an Award will constitute the Participant’s acknowledgement of and consent to the Company’s application, implementation, and enforcement of any applicable Company clawback or similar policy that may apply to the Participant, whether adopted before or after the Effective Date, and any Applicable Law relating to clawback, cancellation, recoupment, rescission, payback, or reduction of compensation, and the Participant’s agreement that the Company may take any actions that may be necessary to effectuate any such policy or Applicable Law, without further consideration or action.
(b) Bad Conduct. Notwithstanding any other term or condition of this Plan, if a Participant (i) breaches any of such Participant’s obligations under any restrictive covenants to which such Participant is bound with respect to the Company or its Subsidiaries or Affiliates or (ii) experiences Termination of Service for Cause, in each case as determined by the Committee, in addition to any other penalties or restrictions that may apply under this Plan, Applicable Law or otherwise, the Committee shall have the authority to reduce, terminate, recapture or cause the forfeiture of any Award, any cash or Shares issued in connection with any Award and any securities directly or indirectly issued by the Company or one of its Subsidiaries or Affiliates in exchange for such Shares. In such instance, the applicable Participant (or such Participant’s successor or transferee, as applicable) shall execute and deliver to the Company all documents requested by the Committee in connection therewith within ten days. If any Person fails for any
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reason to comply with the immediately preceding sentence, (A) the Committee may, at its sole option, in addition to all other remedies it may have, terminate or transfer all of the applicable Person’s rights in and to the applicable Awards or Shares, as the case may be, in which event (and assuming the issuance of Shares in exchange for an Award), the applicable Person shall not be a stockholder of the Company (or hold securities in any Subsidiary) and shall have no further right, title or interest in or to any Shares or any securities of the Company or any Subsidiary or Affiliate issued in consideration therefor, and (B) such Person shall indemnify or reimburse the Company for any and all liabilities, losses, damages, costs and expenses (including reasonable fees and expenses of attorneys) which the Company or any Subsidiary or Affiliate may suffer, sustain or incur directly or indirectly arising out of, relating to or otherwise by virtue of enforcing its rights hereunder or bringing any claims with respect thereto.
14.7 Listing and Other Conditions.
(a) Unless otherwise determined by the Committee, as long as the Common Stock is listed on a national securities exchange or system sponsored by a national securities association, the issuance of Shares pursuant to an Award shall be conditioned upon such Shares being listed on such exchange or system. The Company shall have no obligation to issue such Shares unless and until such Shares are so listed, and the right to exercise any Stock Option or other Award, if applicable, with respect to such Shares shall be suspended until such listing has been effected.
(b) If at any time counsel to the Company advises the Company that any sale or delivery of Shares pursuant to an Award is or may in the circumstances be unlawful or result in the imposition of excise taxes on the Company under Applicable Law, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the Securities Act or otherwise, with respect to Shares or Awards, and the right to exercise any Stock Option or other Award, if applicable, shall be suspended until, based on the advice of said counsel, such sale or delivery shall be lawful or will not result in the imposition of excise taxes on the Company.
(c) Upon termination of any period of suspension under this Section 14.7, any Award affected by such suspension that has l not then expired or terminated shall be reinstated as to all Shares available before such suspension and as to Shares that would otherwise have become available during the period of such suspension, but no such suspension shall extend the term of any Award.
(d) A Participant shall be required to supply the Company with certificates, representations, and information that the Company requests and otherwise cooperate with the Company in obtaining any listing, registration, qualification, exemption, consent, or approval that the Company deems necessary or appropriate.
14.8 Governing Law; Dispute Resolution; Waiver of Jury Trial. This Plan, all Award Agreements (including any exhibits attached thereto) and all Awards and actions taken in connection herewith or therewith shall be governed and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws. Any suit, action or proceeding with respect to this Plan, an Award Agreement or an Award, or any judgment entered
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by any court in respect of any thereof, shall be brought exclusively in the Court of Chancery of the State of Delaware (unless the federal courts have exclusive jurisdiction, in which case each party consents to the jurisdiction of the United States District Court for the District of Delaware), and each of the Company and, by accepting an Award hereunder, each Participant hereby submits to the exclusive jurisdiction of such courts for the purpose of any such suit, action, proceeding or judgment. Each of the Company and, by accepting an Award hereunder, each Participant hereby irrevocably waives (a) any objections that the Company or such Participant may now, at the time of grant, or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Plan, an Award Agreement or an Award brought in any of the foregoing courts, (b) any claim that any such suit, action or proceeding brought in any such court has been brought in any inconvenient forum, and (c) any right to a jury trial.
14.9 Construction. Wherever any words are used in this Plan in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply, and wherever words are used herein in the singular form they shall be construed as though they were also used in the plural form in all cases where they would so apply.
14.10 Other Benefits. No Award granted or paid out under this Plan shall be deemed compensation for purposes of computing benefits under any retirement plan of the Company or its Affiliates or affect any benefit or compensation under any other plan now or subsequently in effect under which the availability or amount of benefits is related to the level of compensation.
14.11 Costs. The Company shall bear all expenses associated with administering this Plan, including expenses of issuing Shares pursuant to Awards hereunder.
14.12 No Right to Same Benefits. The provisions of Awards need not be the same with respect to each Participant, and such Awards to individual Participants need not be the same in subsequent years.
14.13 Death/Disability. The Committee may in its discretion require the transferee of a Participant to supply it with written notice of the Participant’s death or Disability and to supply it with a copy of the will (in the case of the Participant’s death) or such other evidence as the Committee deems necessary to establish the validity of the transfer of an Award. The Committee may also require the agreement of the transferee to be bound by all of the terms and conditions of this Plan.
14.14 Section 16(b) of the Exchange Act. It is the intent of the Company that this Plan satisfy, and be interpreted in a manner that satisfies, the applicable requirements of Rule 16b-3 as promulgated under Section 16 of the Exchange Act so that Participants will be entitled to the benefit of Rule 16b-3, or any other rule promulgated under Section 16 of the Exchange Act, and will not be subject to short-swing liability under Section 16 of the Exchange Act. Accordingly, if the operation of any provision of this Plan would conflict with the intent expressed in this Section 14.14, such provision to the extent possible shall be interpreted and/or deemed amended so as to avoid such conflict.
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14.15 Deferral of Awards. The Committee may establish one or more programs under this Plan to permit selected Participants the opportunity to elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other event that absent the election would entitle the Participant to payment or receipt of Shares or other consideration under an Award. The Committee may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, Shares or other consideration so deferred, and such other terms, conditions, rules, and procedures that the Committee deems advisable for the administration of any such deferral program.
14.16 Section 409A of the Code. This Plan and Awards are intended to comply with or be exempt from the applicable requirements of Section 409A of the Code and shall be limited, construed, and interpreted in accordance with such intent. To the extent that any Award is subject to Section 409A of the Code, it shall be paid in a manner that will comply with Section 409A of the Code. Notwithstanding anything herein to the contrary, any provision in this Plan that is inconsistent with Section 409A of the Code shall be deemed amended to comply with or be exempt from Section 409A of the Code and, to the extent such provision cannot be amended to comply therewith or be exempt therefrom, such provision shall be null and void. The Company shall have no liability to a Participant, or any other party, if an Award that is intended to be exempt from, or compliant with, Section 409A of the Code is not so exempt or compliant or for any action taken by the Committee or the Company and, in the event that any amount or benefit under this Plan becomes subject to penalties under Section 409A of the Code, responsibility for payment of such penalties shall rest solely with the affected Participants and not with the Company. Notwithstanding any contrary provision in this Plan or Award Agreement, any payment(s) of “nonqualified deferred compensation” (within the meaning of Section 409A of the Code) that are otherwise required to be made under this Plan to a “specified employee” (as defined under Section 409A of the Code) as a result of such employee’s separation from service (other than a payment that is not subject to Section 409A of the Code) shall be delayed for the first six months following such separation from service (or, if earlier, until the date of death of the specified employee) and shall instead be paid (in a manner set forth in the Award Agreement) upon expiration of such delay period.
14.17 Data Privacy. As a condition of receipt of any Award, each Participant explicitly and unambiguously consents to the collection, use, and transfer, in electronic or other form, of personal data as described in this Section 14.17 by and among, as applicable, the Company and its Affiliates, for the exclusive purpose of implementing, administering, and managing this Plan and Awards and the Participant’s participation in this Plan. In furtherance of such implementation, administration, and management, the Company and its Affiliates may hold certain personal information about a Participant, including, but not limited to, the Participant’s name, home address, telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title(s), information regarding any securities of the Company or any of its Affiliates, and details of all Awards (the “Data”). In addition to transferring the Data amongst themselves as necessary for the purpose of implementation, administration, and management of this Plan and Awards and the Participant’s participation in this Plan, the Company and its Affiliates may each transfer the Data to any third parties assisting the Company in the implementation, administration, and management of this Plan and Awards and the Participant’s participation in this Plan. Recipients of the Data may be located in the Participant’s country or elsewhere, and the Participant’s country and any given recipient’s country may have different data
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privacy laws and protections. By accepting an Award, each Participant authorizes such recipients to receive, possess, use, retain, and transfer the Data, in electronic or other form, for the purposes of assisting the Company in the implementation, administration, and management of this Plan and Awards and the Participant’s participation in this Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Company or the Participant may elect to deposit any Shares. The Data related to a Participant will be held only as long as is necessary to implement, administer, and manage this Plan and Awards and the Participant’s participation in this Plan. A Participant may, at any time, view the Data held by the Company with respect to such Participant, request additional information about the storage and processing of the Data with respect to such Participant, recommend any necessary corrections to the Data with respect to the Participant, or refuse or withdraw the consents herein in writing, in any case without cost, by contacting his or her local human resources representative. The Company may cancel the Participant’s eligibility to participate in this Plan, and in the Committee’s discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws the consents described herein. For more information on the consequences of refusal to consent or withdrawal of consent, Participants may contact their local human resources representative.
14.18 Successor and Assigns. This Plan shall be binding on all successors and permitted assigns of a Participant, including, without limitation, the estate of such Participant and the executor, administrator, or trustee of such estate.
14.19 Severability of Provisions. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and this Plan shall be construed and enforced as if such provisions had not been included.
14.20 Headings and Captions. The headings and captions herein are provided for reference and convenience only, shall not be considered part of this Plan, and shall not be employed in the construction of this Plan.
Article XV
EFFECTIVE DATE OF PLAN
This Plan shall become effective on April 15, 2026, which is the date of its adoption by the Board, subject to the approval of this Plan by the stockholders of the Company in accordance with the requirements of the laws of the State of Delaware.
Article XVI
TERM OF PLAN
No Award shall be granted pursuant to this Plan on or after the tenth anniversary of the earlier of the date that this Plan is adopted by the Board or the date of stockholder approval, but Awards granted prior to such tenth anniversary may extend beyond that date.
* * * * *
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EX-10.10
EX-10.10
Filename: ck0002098430-ex10_10.htm · Sequence: 14
EX-10.10
Exhibit 10.10
SECOND AMENDED AND RESTATED
MADISON INDOOR AIR SOLUTIONS LLC
EQUITY APPRECIATION PLAN
Article I
ESTABLISHMENT AND PURPOSE
The Plan was established by Madison Indoor Air Solutions LLC (the “Company”) effective January 30, 2019 (the “Adoption Date”), and was amended and restated in its entirety effective December 31, 2025 (such amended and restated Plan, the “Prior Plan”).
The Prior Plan provided for grants of Awards (as defined in the Prior Plan) pursuant to Award Agreements (as defined in the Prior Plan). Pursuant to this amendment and restatement of the Plan in its entirety, effective April 15, 2026 (the “Effective Date”), all Awards outstanding on the Effective Date will be deemed converted into EAR Units pursuant to Section 6.4.
The purpose of the Plan is to promote the overall value of the Company and the return to the Members.
Article II
DEFINITIONS
Capitalized terms used but not defined herein shall have the meanings given to such terms, from time to time, in that certain Second Amended and Restated Limited Liability Company Agreement of the Company dated as of February 8, 2019, as the same may be further amended or modified from time to time (the “LLC Agreement”). For purposes of the Plan, the following terms are defined as set forth below:
2.1 “Cause” means (a) with respect to a Participant employed pursuant to a written employment agreement which agreement includes a definition of “Cause,” “Cause” as defined in that agreement or (b) with respect to any other Participant, except as otherwise set forth in a Grant Agreement, the occurrence of any of the following: (i) such Participant’s commission of, or plea of guilty or nolo contendere to, any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof or under the laws of any other jurisdiction, (ii) such Participant’s actual or attempted commission of, or participation in, a fraud or theft against any Madison Air Company or any client of any Madison Air Company, (iii) such Participant’s engagement in misconduct that causes, or could reasonably be expected to cause, any harm to any Madison Air Company, (iv) gross negligence, willful misconduct, breach of fiduciary duty, theft or embezzlement with respect to any Madison Air Company, (v) such Participant’s repeated failure to substantially perform his or her duties and responsibilities to any Madison Air Company (other than failure resulting from such Participant’s Disability), or (vi) such Participant’s material violation of any contract or agreement between the Participant and any Madison Air Company or any written policy of any Madison Air Company or any provision of Madison Air Company’s code of business conduct and ethics (including any successor thereto) or any other code of conduct established by any Madison Air Company to which such Participant is subject.
2.2 “Code” means the U.S. Internal Revenue Code of 1986, as amended.
2.3 “Committee” means the Manager or such other person or persons appointed by resolution of the Manager to administer the Plan.
2.4 “Company” means Madison Indoor Air Solutions LLC, a Delaware limited liability company and any successor or assign.
2.5 “EAR Unit” means a contingent economic interest, expressed in the form of a unit. For the sake of clarity, EAR Units do not represent equity interests in any Group Company.
2.6 “Equitable Adjustment” means an amendment, modification, alteration or adjustment to one or more EAR Units (a) in connection with any transaction or transactions involving a Madison Air Company, (b) with respect to a particular Participant, in connection with any extraordinary circumstances related to such Participant and/or any change in terms of employment or employment status of such Participant, in each case which the Committee determines is necessary or advisable in order to effectuate the purpose and intent of the Plan and the grant of such EAR Unit (or the Award which was converted into such EAR Unit) or (c) pursuant to Section 6.8.
2.7 “Grant Agreement” means a written grant agreement in such form as approved by the Committee from time to time pursuant to which a Participant received or receives an Award (if such Grant Agreement was effective prior to the Effective Date) or EAR Units (if such Grant Agreement was or is effective on or after the Effective Date).
2.8 “Grant Date” means, with respect to any EAR Unit, the date that such EAR Unit (or, if applicable, the Award which was converted into such EAR Unit) is granted or such other date which is determined by the Committee and is set forth in the Grant Agreement relating to such EAR Unit (or, if applicable, the Award which was converted into such EAR Unit).
2.9 “Group Companies” means Madison Industries IAQ Solutions Corporation, a Delaware corporation, and all of its affiliates, collectively, from time to time, including the Madison Air Companies.
2.10 “IPO” means an initial registered offering of equity securities of the Company, any Parent or any Subsidiary, or in each case, any successor thereto to the public pursuant to an effective registration statement under the Securities Act, where such equity securities are listed on a nationally recognized exchange (including by means of a direct listing) or a bona fide business combination with a special purpose acquisition company with publicly traded equity securities.
2.11 “Madison Air Companies” means the Company and all of its Subsidiaries, collectively, from time to time.
2.12 “Parent” means any Person which owns at the relevant time, directly or indirectly, greater than 50% of the Equity Securities.
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2.13 “Participant” means a person who satisfies the eligibility conditions of Article V and to whom an EAR Unit (or an Award which has been converted into an EAR Unit) has been granted pursuant to a written Grant Agreement.
2.14 “Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated association, corporation or other entity or any government entity, body or authority.
2.15 “Plan” means this Second Amended and Restated Madison Indoor Air Solutions LLC Equity Appreciation Plan, as herein set forth and as may be amended from time to time.
2.16 “Sale” means either (a) a sale or conveyance of assets or equity interests, a merger or consolidation, or any combination of the foregoing, involving one or more of the Madison Air Companies or any direct or indirect owner thereof, following which the direct or indirect owners of the Company immediately prior to such transaction no longer own a direct or indirect interest (other than a nominal interest, as determined by the Committee) in any of the operating assets which were, immediately prior to such transaction, owned by the Madison Air Companies or (b) any other transaction which the Committee determines constitutes a Sale. For the sake of clarity, an IPO shall not constitute a Sale.
2.17 “Shares” means shares of Class A Common Stock of Madison Air Solutions Corporation, a Delaware corporation and any successor or assign.
2.18 “Subsidiary” means any Person of which the Company or Madison Industries IAQ Solutions Corporation owns at the relevant time, directly or indirectly, at least 50% of the equity securities.
2.19 “Termination of Employment” means with respect to any Participant, the occurrence of any act or event (whether pursuant to an employment agreement or otherwise) that actually or effectively causes or results in such Participant’s ceasing, for whatever reason, to be an employee of any Madison Air Company, including, without limitation, retirement, death, disability, dismissal, or other termination of employment (whether or not at the election of the Participant and whether or not such termination, if at the election of any Madison Air Company, is for Cause or without Cause). A Termination of Employment shall occur with respect to a Participant who is employed by a Subsidiary if the Subsidiary shall cease to be a Subsidiary and the Participant shall not immediately thereafter become an employee of any continuing Madison Air Company.
In addition, certain other terms used herein have definitions given to them in the first place in which they are used.
Article III
ADMINISTRATION
The Plan shall be administered by the Committee. The Committee may authorize any of its members or officers of the Company to execute and deliver documents on behalf of the Committee for purposes of the Plan. The Committee may delegate to one or more of its members or officers
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of the Company such duties and responsibilities with respect to the Plan as it determines, provided that such delegation is evidenced by a writing executed by the Committee.
Among other things, the Committee shall have the authority, at any time, without requiring the consent of any Participant or any other Person:
(a)
to select those key employees of the Madison Air Companies to whom EAR Units may be granted from time to time;
(b)
to determine whether and to what extent EAR Units are to be granted hereunder;
(c)
to determine the terms and conditions of any EAR Units granted hereunder;
(d)
to adjust, modify or amend any terms and conditions of any EAR Units to account for Equitable Adjustment; provided that no such adjustment, modification or amendment may be made if or to the extent that it would cause an outstanding EAR Unit to cease to be exempt from, or to fail to comply with, Section 409A of the Code;
(e)
to provide for any forms of Grant Agreement and any other agreements or documents to be utilized in connection with the Plan;
(f)
to make all determinations as to whether a Participant is eligible for and has met all the criteria for the settlement of EAR Units
(g)
to determine the number of Units (or, upon or following an IPO, Shares) to be distributed to Participants in connection with the settlement of EAR Units;
(h)
to determine whether and when an individual has incurred a Termination of Employment;
(i)
to determine whether EAR Units are to be adjusted or modified under the Plan or the terms of a Grant Agreement;
(j)
to adopt, alter, amend and rescind such policies, procedures, rules and regulations (which need not be in writing) as, in its opinion, may be advisable in the administration of the Plan;
(k)
to appoint and compensate agents, counsel, auditors or other specialists to aid it in the discharge of its duties;
(l)
to amend or terminate the Plan at any time; and
(m)
to make all other determinations related to the Plan.
The Committee shall have the authority to interpret the terms and provisions of the Plan and any EAR Units granted or issued under the Plan and any Grant Agreement and to otherwise supervise the administration of the Plan. The Committee’s policies and procedures may differ with
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respect to EAR Units granted at different times and with respect to EAR Units granted to different Participants (whether such EAR Units are granted at the same or at different times). Notwithstanding anything set forth in the Plan or in any Grant Agreement to the contrary, any determination made by the Committee pursuant to the provisions of the Plan or with respect to any EAR Units shall be made in the Committee’s sole discretion. All decisions made by the Committee pursuant to the provisions of the Plan shall be final and binding on all Persons, including the Company and the Participants. Any determination shall not be subject to de novo review if challenged in court.
Article IV
NUMBER OF EAR UNITS UNDER THE PLAN
The number of EAR Units (a) outstanding under the Plan at any time and (b)(i) prior to an IPO, with respect to which Units have been issued in settlement of vested EAR Units under the Plan shall not exceed, in the aggregate, that number of Units equal to 10% of the fully-diluted outstanding Units at the time of such issuance or (ii) upon or following an IPO, with respect to which Shares have been issued in respect of vested EAR Units under the Plan shall not exceed, in the aggregate, that number of Shares available to be issued under the Omnibus Plan (the “Cap”). Units (or Shares) delivered, withheld or surrendered to satisfy any tax obligations of any Participant with respect to the EAR Units shall be treated as having been issued and shall count against the Cap. If any EAR Units or Units (or Shares) issued in settlement of any EAR Units are canceled, forfeited or terminated for any reason, such EAR Units (or the EAR Units with respect to which such Units (or Shares) were issued) shall again be available under the Plan.
Article V
ELIGIBILITY
Any employee of one or more Madison Air Companies shall be eligible to participate in the Plan and receive EAR Units.
Article VI
GRANT OF EAR UNITS; VESTING; SETTLEMENT
6.1 General. Subject to the limitations set forth in Article IV, the Committee shall have authority to grant EAR Units under the Plan at any time or from time to time.
6.2 Grant. Any EAR Units granted under the Plan shall be evidenced by a Grant Agreement executed by the Company (at the direction of the Committee) and the Participant. Such Agreement shall embody the terms and conditions related to such grant. A person shall only be a Participant and shall only receive a grant of EAR Units if (and only to the extent that) a Grant Agreement has been entered into between such person and the Company (at the direction of the Committee). Notwithstanding any agreement to which any Madison Air Company is a party to the contrary or any promise made by an officer or director of any Madison Air Company to the contrary, all grants of EAR Units are and shall be at all times subject to the express terms and conditions set forth in the Plan.
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6.3 Vesting; Related Approved Distribution Value. An EAR Unit will vest on the earlier of (a) that date which is 5 years from the Grant Date of such EAR Unit or such other date or dates as set forth in the Grant Agreement, subject to the applicable Participant’s continued employment through such date (a “Time Vesting Date”) and (b) the date of the consummation of a Sale, subject to the applicable Participant’s continued employment through such date (a “Sale Vesting Date” and, together with a Time Vesting Date, a “Vesting Date”)). If a Participant experiences a Termination of Employment for any reason, any EAR Units held by the Participant for which a Vesting Date has not yet occurred will be automatically forfeited without consideration.
6.4 Conversion of Outstanding Awards. All Awards outstanding on the Effective Date are hereby converted into that number of EAR Units as is determined by the Committee.
6.5 Settlement of Vested EAR Units.
(a) Vested EAR Units will be settled in full within 60 days of the applicable Vesting Date (such period, the “Settlement Period”) by the issuance of that number of Units (or, upon or following an IPO, Shares) equal to the number of such vested EAR Units, subject to the provisions of Section 8.5.
(b) As a condition to the issuance of any Units (or Shares, as applicable) pursuant to the Plan, Participant (or, in the event that Participant dies following the applicable Vesting Date but prior to the issuance of Units (or Shares, as applicable), such Participant’s representative) shall be required to (i) complete a customary questionnaire, which may include inquiries to assist with the Company’s compliance with applicable law (including federal and state securities laws), (ii) execute and deliver to the Company a document acknowledging and agreeing that the applicable EAR Units are no longer outstanding and releasing all claims against the Group Companies, whether in connection with such EAR Units or otherwise, and (iii) execute and deliver to the Company such other documents that the Committee requests (the “Conditions”).
(c) If any Participant (or representative, as applicable) fails for any reason to satisfy the Conditions within the Settlement Period, (i) the Company may, at its sole option, in addition to all other remedies it may have, terminate all of the applicable Person’s rights in and to the applicable EAR Units, in which event, the applicable Person shall forfeit all such rights and shall have no further right, title or interest in or to any EAR Units or any Units (or Shares) issuable in consideration therefor, and (ii) such Person shall indemnify or reimburse the Company for any and all liabilities, losses, damages, costs and expenses (including reasonable fees and expenses of attorneys) which any Madison Air Company may suffer, sustain or incur directly or indirectly arising out of, relating to or otherwise by virtue of enforcing its rights hereunder or bringing any claims with respect thereto.
6.6 Nontransferability of EAR Units. No EAR Unit shall be transferable by or on behalf of any Participant. No Participant shall be permitted to sell, assign, transfer, pledge or otherwise encumber his or her EAR Units, or any portion thereof, or any interest therein.
6.7 Bad Conduct. If any Participant (a) breaches any of such Participant’s obligations under Article VII of the Plan or any other restrictive covenants to which such Participant is bound
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with respect to the Madison Air Companies or (b) experiences a Termination of Employment for Cause, in each case as determined by the Committee, the Committee shall have the authority to reduce, terminate, recapture or cause the forfeiture of any EAR Units and/or any Units (or Shares) issued upon settlement of any EAR Units. In such instance, the applicable Participant (or such Participant’s successor or transferee, as applicable) shall execute and deliver to the Company all documents requested by the Committee in connection therewith within ten days. If any Person fails for any reason to comply with the immediately preceding sentence, (i) the Committee may, at its sole option, in addition to all other remedies it may have, terminate or transfer all of the applicable Person’s rights in and to the applicable EAR Units and/or Units (or Shares) and the applicable Person shall have no further right, title or interest in or to any EAR Units or Units (or Shares) issued in settlement thereof, and (ii) such Person shall indemnify or reimburse the Company for any and all liabilities, losses, damages, costs and expenses (including reasonable fees and expenses of attorneys) which any Madison Air Company may suffer, sustain or incur directly or indirectly arising out of, relating to or otherwise by virtue of enforcing its rights hereunder or bringing any claims with respect thereto.
6.8 Adjustments. If the Company at any time subdivides (by any split, recapitalization or otherwise) the outstanding Units (or Shares) into a greater number of Units (or Shares), or combines (by reverse split, combination, or otherwise) its outstanding Units (or Shares) into a lesser number of Units (or Shares), then (A) the aggregate number or kind of securities that thereafter may be issued under this Plan and (B) the number of EAR Units, or the number of Units (or Shares) covered by outstanding EAR Units may be appropriately adjusted by the Committee to prevent dilution or enlargement of the rights granted to, or available for, Participants under this Plan; provided, that the Committee in its sole discretion shall determine whether an adjustment is appropriate.
Article VII
RESTRICTIVE COVENANTS
7.1 General. The grant of EAR Units represents a substantial economic benefit to the respective Participant. Each Participant, through his or her role with the Group Companies, has access to and is involved in the formulation of certain confidential and secret information of the Group Companies regarding their operations. Each Participant could materially harm the business of the Group Companies by competing with the Group Companies or soliciting employees or customers of the Group Companies. To protect the Group Companies, as a condition to the receipt of a EAR Units, each Participant must agree in writing to be bound by the terms of this Article VII.
7.2 Confidential Information.
(a) Subject to Section 7.2(b) below, at no time during or after a Participant’s employment with any of the Group Companies will such Participant (a) use Confidential Information (as defined below) for any purpose other than in connection with such employment for the benefit of the Group Companies as directed by such Group Company or (b) disclose Confidential Information to any Person other than the Group Companies or Persons to whom disclosure has been authorized in writing by any of the Group Companies, except that such
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Participant may disclose such Confidential Information to the minimum extent necessary to comply with governmental or judicial process, so long as such Participant notifies in writing the applicable Group Company of such pending disclosure in advance and consults with the applicable Group Company concerning the advisability of seeking a protective order or other means of preserving the confidentiality of the Confidential Information). Each Participant also agrees not to disclose any confidential or proprietary information that any of the Group Companies obtain from a third party which such Group Company treats as confidential or proprietary or designates as confidential, whether or not such information is owned or developed by such Group Company. Upon Termination of Employment, or at any other time such Group Company requests, each Participant will deliver promptly to the respective Group Company all memoranda, notes, records, reports and other documents, and all copies thereof, in any form relating to the business of any of the Group Companies or members of their affiliated groups that such Participant obtained while employed by, or otherwise serving or acting on behalf of, such Group Company and that such Participant may then possess or otherwise control. As used herein, “Confidential Information” means all information of a technical or business nature relating to the Group Companies, including, without limitation, trade secrets, inventions, drawings, file data, documentation, diagrams, specifications, know-how, processes, formulae, models, test results, marketing techniques and materials, marketing and development plans, price lists, pricing policies, business plans, information related to acquisition plans or targets, information related to joint venture or other strategic affiliation plans or targets, information relating to customer or supplier identities, characteristics and agreements, financial information and projections, flow charts, software at any stage of development, source codes, object codes, research and development procedures, and employee files and information. Confidential Information shall not include any information that has become public knowledge through no fault of such Participant or any Person acting in concert with such Participant.
(b) Notwithstanding anything to the contrary herein, the Plan will not limit any Participant’s rights under applicable law to initiate communications directly with, provide information to, respond to any inquiries from, or report possible violations of law or regulation to any governmental entity or self-regulatory authority, or to file a charge with or participate in an investigation conducted by any governmental entity or self-regulatory authority. In addition, it is understood that the Plan shall not require a Participant to notify any Group Company of the Participant’s decision to file a charge or complaint with or participate in an investigation conducted by any governmental entity or self-regulatory authority. Despite the foregoing, Participants are not permitted to reveal to any third party, including any governmental entity or self-regulatory authority, information the Participant came to learn during his or her service to the Group Companies that is protected from disclosure by any applicable privilege, including but not limited to the attorney-client privilege or attorney work product doctrine, and the Group Companies do not waive any applicable privileges or the right to continue to protect their privileged attorney-client information, attorney work product, and other privileged information.
7.3 Intellectual Property. Any Confidential Information, as well as any idea, invention, copyrightable or patentable work, improvement, technique, development, product, service, computer technology, software, and the like, whether tangible or intangible, directly or indirectly resulting or arising from, or created through, the Group Companies’ business, in which a property interest exists or may exist if asserted under an applicable law (hereafter “Intellectual Property”), regardless of form, shall be the sole and exclusive property of the respective Group Company. All
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copyrightable Intellectual Property shall be deemed “works for hire” under the United States Copyright Act and any similar law of any other jurisdiction. To the extent that a Participant retains any interests in such Intellectual Property, such Participant, without requiring the provision of additional consideration, (i) hereby irrevocably transfers and assigns to any of the Group Companies his or her entire interest in such Intellectual Property, including all patents, trade secrets, copyrights, and renewals of copyrights; (ii) shall execute whatever assignments and other documents that such Group Companies may reasonably request of such Participant to vest full title of such Intellectual Property in the respective Group Company; and (iii) shall comply with all reasonable requests by the Group Companies to assist the Group Companies in enforcing and defending their rights in such Intellectual Property against any Person.
7.4 Non-Competition. Each Participant agrees that, during his or her employment with any Group Company and for one (1) year after any Termination of Employment (the “Restricted Period”), such Participant will not, directly or indirectly, on behalf of himself or herself or any other Person:
(a) own, operate, be employed by, consult with, participate in, be connected in any capacity with, or otherwise derive any economic benefit from, any Person that engages in any activity which is competitive with the business of any of the Group Companies;
(b) solicit, induce, recruit, or encourage any Customer (as defined below), Potential Customer (as defined below), sales representative or distributor of any of the Group Companies to purchase or acquire any products or services which is competitive with those provided or performed by any of the Group Companies;
(c) solicit, induce or encourage any Customer, Potential Customer, Supplier (as defined below), Potential Supplier (as defined below), sales representative or distributor of any of the Group Companies to terminate its business relationship with any Group Company; or
(d) engage or assist in any activities that result in or are intended to result in diversion of clients, Customers, Suppliers, sales representatives, distributors, income, goodwill, or any other thing of value from any of the Group Companies to the Participant or to any other Person.
For purposes of these provisions, “Customer” means any Person which purchased or received goods or services from any of the Group Companies during the 36 months immediately preceding the measurement date. “Potential Customer” means any Person which contacted, was been contacted by, or was otherwise identified by any of the Group Companies as a possible Customer during the 36 months immediately preceding the measurement date. “Supplier” means any Person which provided goods or services to any of the Group Companies during the 36 months immediately preceding the measurement date. “Potential Supplier” means any Person which contacted, was contacted by, or was otherwise identified by any of the Group Companies as a possible Supplier during the 36 months immediately preceding the measurement date.
7.5 Non-Solicitation. Each Participant agrees that during the Restricted Period, such Participant shall not directly or indirectly, alone or in concert with others, recruit, solicit or induce, or attempt to recruit, solicit or induce, a person who is or was an employee of any Group Company
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at any time during the Restricted Period to terminate such person’s employment with, or otherwise cease or alter such person’s relationship with, any of the Group Companies.
7.6 Enforcement. Each Participant agrees that the restrictions contained in this Article VII are necessary for the protection of the business and goodwill of the Group Companies and are considered by such Participant to be reasonable for that purpose, and that the scope of restricted activities, the geographic scope of such restrictions, and the duration of the restrictions set forth in this Article VII are considered by such Participant to be reasonable. Each Participant agrees that the restrictions contained in this Article VII will not interfere with such Participant’s ability to earn a living. Each Participant further agrees that any breach of any provision of this Article VII will cause the Group Companies substantial and irrevocable harm for which money damages will be inadequate, and therefore, in the event of any such breach or threatened breach, the Group Companies shall be entitled to specific performance and injunctive relief, in addition to such other remedies as may be available. Each Participant further agrees that to the extent any provision or portion of this Article VII shall be held, found or deemed to be unreasonable, unlawful or unenforceable by a court of competent jurisdiction, then any such provision or portion thereof shall be deemed to be modified to the extent necessary in order that any such provision or portion thereof shall be legally enforceable to the fullest extent permitted by applicable law. Each Participant agrees that the Company shall have no obligation to deliver Units (or Shares) to such Participant with respect to any vested EAR Units at any time while, or after, such Participant is in breach of any provision of Article VII.
Article VIII
AMENDMENTS AND CHANGES TO PLAN, AGREEMENTS, AND EAR UNITS; MISCELLANEOUS
8.1 Amendments and Termination of Plan. Notwithstanding anything set forth in the Plan to the contrary and unless otherwise provided in a Grant Agreement, the Committee may, at any time amend, modify or alter the Plan in any manner it chooses, including but not limited to, Equitable Adjustments, provided that no such amendment, modification or alteration may be made if or to the extent that it would cause an outstanding EAR Unit to cease to be exempt from, or to fail to comply with, Section 409A of the Code, and provided that, other than Equitable Adjustments, any such amendment, modification or alteration may not materially adversely impair the rights of a Participant with respect to any outstanding EAR Units without the Participant’s consent.
8.2 Amendments and Termination of Agreements and EAR Units. Notwithstanding anything set forth in the Plan to the contrary and unless otherwise provided in a Grant Agreement, the Committee may at any time and without the consent of the applicable Participant, amend, modify or otherwise alter the terms of any Grant Agreement or EAR Unit; provided that no such amendment, modification or alteration may be made if or to the extent that it would cause an outstanding Agreement or EAR Unit to cease to be exempt from, or to fail to comply with, Section 409A of the Code, and provided that other than Equitable Adjustments, any such amendment, modification or alteration may not materially adversely impair the rights of a Participant with respect to any outstanding EAR Units without such Participant’s consent. Furthermore, the modification or termination of one Participant’s Grant Agreement or underlying EAR Units shall
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not obligate the Committee to amend, modify or terminate any other Person’s or Participant’s Grant Agreement or underlying EAR Units and shall have no effect on any other Person’s or Participant’s Grant Agreement or underlying EAR Units.
8.3 Unfunded Status of Plan. It is intended that the Plan be an “unfunded” plan for incentive and deferred compensation.
8.4 No Additional Obligation. Nothing contained in the Plan shall prevent any Madison Air Company from adopting other or additional compensation arrangements for its employees.
8.5 Taxes. Participants will be solely responsible for all applicable taxes (including, without limitation, income, excise and the employee and employer portions of any payroll taxes) and penalties, and any interest that accrues thereon, incurred in connection with the receipt, vesting or settlement of any EAR Unit and the receipt, ownership and disposition of any Units. As a condition to the delivery of any Units, or any cash or other securities or property pursuant to the settlement of any EAR Unit, or in connection with any other event that gives rise to a federal or other governmental tax withholding obligation on the part of the Company or any other taxable event relating to an EAR Unit:
(a) the Company may deduct or withhold (or cause to be deducted or withheld) the applicable amount from any payment or distribution to a Participant whether or not pursuant to the Plan (including in the form of Units (or Shares) otherwise deliverable),
(b) the Committee may require that the Participant remit the applicable amount in cash to the Company (through payroll deduction or otherwise), or
(c) the Company may enter into any other arrangements it determines to be suitable to withhold, in each case in the Company’s discretion, the amounts of such taxes to be withheld based on the individual tax rates applicable to the Participant.
8.6 Controlling Law; Exclusive Jurisdiction; Waiver of Jury Trial. The Plan and all EAR Units and Units (or Shares) issued in settlement thereof, and all actions taken under the Plan, shall be governed by and construed in accordance with the laws of the State of Delaware, except for its law respecting choice of law. The Plan shall be construed to comply with all applicable laws and to avoid liability to all Group Companies and all Participants, where possible. Any litigation arising out of or related to the Plan, any EAR Units, any Units (or Shares) issued in settlement thereof, or any actions taken under the Plan, shall be filed only in the state or federal courts in the State of Delaware. All Participants consent and submit to the exclusive jurisdiction and venue of such courts, waive any objection based on the convenience of such venues, and agree to not seek to change venue. NO PARTICIPANT SHALL HAVE ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR CAUSE OF ACTION IN ANY LEGAL PROCEEDING ARISING OUT OF RELATED TO THE PLAN OR ANY EAR UNIT (OR ANY AWARD WHICH WAS CONVERTED INTO AN EAR UNIT) GRANTED OR ANY ACTIONS TAKEN UNDER THE PLAN OR THE TRANSACTIONS OR EVENTS CONTEMPLATED HEREBY OR THEREBY OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENTS, OR ACTIONS IN CONNECTION HEREWITH OR THEREWITH, REGARDLESS OF WHO INITIATED SUCH LEGAL PROCEEDING. ANY AND ALL SUCH
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CLAIMS AND CAUSES OF ACTION SHALL BE TRIED BY THE COURT WITHOUT A JURY. NO SUCH ACTION OR LEGAL PROCEEDING SHALL BE CONSOLIDATED WITH ANY LEGAL PROCEEDING IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
8.7 Offset. Any amounts owed of any nature to any Group Company by any Participant may be offset by the Company from the value of any cash, securities or other property payable under the Plan or relevant Agreement to the extent permitted by Section 409A of the Code and applicable law. No cash, securities or other property payable under the Plan or relevant Agreement shall be transferred unless and until all disputes between any Group Company and such Participant have been fully and finally resolved, and the Participant has waived all such claims against all Group Companies.
8.8 No Effect on Benefits. Payments under the Plan shall constitute special discretionary incentive payments to the Participants and shall not be required to be taken into account in computing the amount of salary or compensation of the Participants for the purpose of determining any contributions to or any benefits under any pension, retirement, profit-sharing, incentive, life insurance, overtime, severance or other benefit plan of the Company or under any agreement with a Participant, unless the Company or such other arrangement specifically provides otherwise.
8.9 Mitigation of Excise Tax. In the event that any payments or benefits provided for in the Plan or otherwise payable to a Participant, whether in cash or Units (or Shares) (collectively, the “Payments”) (a) constitute “parachute payments” within the meaning of Section 280G of the Code, and (b) but for this Section 8.9, would be subject to the excise tax imposed by Section 4999 of the Code, then the Payments will be either (i) delivered in full or (ii) delivered as to such lesser extent that would result in no portion of the Payments being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and employment taxes and the excise tax imposed by Section 4999 of the Code (and any equivalent state or local excise taxes), results in the receipt by the Participant on an after-tax basis, of the greatest amount of Payments, notwithstanding that all or some portion of such Payments may be taxable under Section 4999 of the Code. The determination of whether any reduction in the rights or payments under the Plan is to apply shall be made by the Committee after consultation with the Participant, and such determination shall be conclusive and binding on the Participant. The Participant shall cooperate in good faith with the Committee in making such determination and providing the necessary information for this purpose.
8.10 No Rights with Respect to Continuance of Employment. Nothing contained herein or in any Grant Agreement shall be deemed to alter the relationship between any Madison Air Company and a Participant, or the contractual relationship between Madison Air Company and a Participant, if there is a written contract regarding such relationship. Nothing contained herein shall be construed to constitute a contract of employment between any Madison Air Company and a Participant. The respective Madison Air Companies and each Participant continue to have the right to terminate the employment or service relationship at any time for any reason, except as may be provided in a separate, written contract. No Madison Air Company shall have any obligation to retain the Participant in its employ or service as a result of the Plan or any Grant Agreement. There shall be no inference as to the length of employment or service hereby, and each Madison Air
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Company reserves the same rights to terminate the Participant’s employment or service as existed prior to the individual becoming a Participant.
8.11 Headings. The headings contained in the Plan are for reference purposes only and shall not affect the meaning or interpretation of the Plan.
8.12 Severability. If any provision of the Plan shall for any reason be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision, and the Plan shall be construed as if such invalid or unenforceable provision were omitted.
8.13 409A. The Company intends that payments under the Plan shall be exempt from Section 409A of the Code as short-term deferrals and shall not constitute “deferred compensation” within the meaning of Section 409A of the Code. The Plan shall be interpreted, construed and administered in accordance with the foregoing intent, so as to avoid the imposition of taxes and penalties on Participants pursuant to Section 409A of the Code. No Group Company shall have any liability to any Participant or otherwise if the Plan or amounts paid or payable hereunder are subject to the additional tax and penalties under Section 409A of the Code.
8.14 Successors and Assigns. The Plan shall inure to the benefit of and be binding upon each successor and assign of the Company. All obligations imposed upon a Participant, and all rights granted to the Company hereunder, shall be binding upon the Participant’s heirs, legal representatives and successors. Each Group Company other than the Company is an express third party beneficiary of the obligations of all Participants under the Plan or any Grant Agreement, entitled to enforce such obligations directly.
8.15 Entire Agreement. The Plan, the Agreements and any documents to be executed upon the issuance of Units (or Shares) in connection with EAR Units constitute the entire agreement between the Group Companies and the Participants with respect to any equity, phantom equity or other equity appreciation rights granted or to be granted to any Participant by any Group Company in consideration for services performed or to be performed by such Participant (“Equity Rights”) and supersede all prior oral or written agreements, understandings or promises involving or made by any Group Company or any of their respective officers, directors, managers, partners or employees to any Participant with regard to Equity Rights, including the Prior Plan. In the event of any inconsistency between the Plan and a Grant Agreement or any other written document related to an Award under the Plan, the terms and conditions of the Plan shall control. No grant of Equity Rights or purported grant of Equity Rights shall be enforceable against any Group Company unless such grant or purported grant is approved by the Committee and evidenced by a Grant Agreement.
8.16 No Rights as an Equityholder. Prior to delivery of Units (or Shares), nothing in the Plan shall be construed to give a Participant any rights or incur any obligations as an equity holder of any Group Company, or otherwise with respect to any Units (or Shares) or other equity interests of any Group Company, including, without limitation, in the event any distributions are made by the Company with respect to Units (or Shares) or made by any other Group Company with respect to its equity interests, any rights to any cash or other payments from the Company or such Group Company at any time, including in connection with or after the issuance of Units (or Shares).
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8.17 No Liability. None of the Committee, any Group Company, any affiliate of any Group Company or their respective members, officers, directors, managers, shareholders, employees, advisory board members, agents or attorneys shall have any liability or obligation whatsoever, in damages or otherwise, to any Participant or any other Person (i) for any act or omission in connection with any EAR Unit, any Units (or Shares) issued in settlement thereof or any Grant Agreement or (ii) as a result of any amendment, modification, alteration or termination of the Plan or a Grant Agreement, or (iii) to compensate any Participant or any other party with respect to or as a result of any amendment, modification, alteration or termination of the Plan or a Grant Agreement.
8.18 Indemnification. The officers, directors, members, managers, shareholders, agents, affiliates, employees, and advisory board members of the Madison Air Companies and the officers, directors, members, managers, shareholders, agents, employees, and advisory board members of the affiliates of the Madison Air Companies, as well as the Committee and each of its members, shall be indemnified and held harmless by the Madison Air Companies against and from any and all loss, cost, liability, or expense that may be imposed upon or reasonably incurred by them in connection with or resulting from any claim, action, suit, or proceeding to which they may be a party or in which they may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by them in settlement (with the Company’s written approval) or paid by them in satisfaction of a judgment in any such action, suit, or proceeding. Nothing set forth in this Section 8.18 shall grant to any rights to any Participant or any successor to or transferee of any Participant, in each case in their capacity as such.
8.19 Outstanding Awards. The Plan, as hereby amended and restated, shall govern all rights and obligations of all Awards outstanding on the date hereof, and of the Participants holding such Awards with respect thereto, notwithstanding any change in such rights and obligations from those in effect prior to the amendment and restatement of the Plan.
IN WITNESS WHEREOF, as of the Effective Date, the Company hereby amends and restates the Plan in its entirety as set forth herein, and approves and adopts this Second Amended and Restated Equity Appreciation Plan of the Company.
MADISON INDOOR AIR SOLUTIONS LLC
By:
/s/ JJ Foley
Name:
JJ Foley
Title:
President
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EX-10.11
EX-10.11
Filename: ck0002098430-ex10_11.htm · Sequence: 15
EX-10.11
Exhibit 10.11
THIRD AMENDED AND RESTATED
MADISON AIR SOLUTIONS CORPORATION
EQUITY APPRECIATION PLAN
Article I
ESTABLISHMENT AND PURPOSE
The Plan was established by Madison Indoor Air Solutions LLC (“MIAS”) effective January 30, 2019 (the “Adoption Date”), and has been amended and restated in its entirety effective December 31, 2025 and April 15, 2026 (the “Second Amendment Date” and such amended and restated Plan, the “Prior Plan”).
Pursuant to this Third Amended and Restated Plan, on the date that a Form S-8 registration statement covering the EAR Units becomes effective (the “Effective Date”), the Prior Plan and all outstanding EAR Units held by Participants who are eligible to receive Shares registered under such Form S-8 registration statement are hereby assigned by MIAS to the Company, and assumed by the Company, the Prior Plan being further amended and restated in its entirety.
The purpose of the Plan is to promote the overall value of the Company and the return to the Shareholders.
Article II
DEFINITIONS
For purposes of the Plan, the following terms are defined as set forth below:
2.1 “Cause” means (a) with respect to a Participant employed pursuant to a written employment agreement which agreement includes a definition of “Cause,” “Cause” as defined in that agreement or (b) with respect to any other Participant, except as otherwise set forth in a Grant Agreement, the occurrence of any of the following: (i) such Participant’s commission of, or plea of guilty or nolo contendere to, any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof or under the laws of any other jurisdiction, (ii) such Participant’s actual or attempted commission of, or participation in, a fraud or theft against any Madison Air Company or any client of any Madison Air Company, (iii) such Participant’s engagement in misconduct that causes, or could reasonably be expected to cause, any harm to any Madison Air Company, (iv) gross negligence, willful misconduct, breach of fiduciary duty, theft or embezzlement with respect to any Madison Air Company, (v) such Participant’s repeated failure to substantially perform his or her duties and responsibilities to any Madison Air Company (other than failure resulting from such Participant’s Disability), or (vi) such Participant’s material violation of any contract or agreement between the Participant and any Madison Air Company or any written policy of any Madison Air Company or any provision of Madison Air Company’s code of business conduct and ethics (including any successor thereto) or any other code of conduct established by any Madison Air Company to which such Participant is subject.
2.2 “Code” means the U.S. Internal Revenue Code of 1986, as amended.
2.3 “Committee” means the Company’s Compensation and Nominating Committee or such other person or persons appointed by resolution of the Board of Directors of the Company.
2.4 “Company” means Madison Air Solutions Corporation, a Delaware corporation and any successor or assign.
2.5 “EAR Unit” means a contingent economic interest, expressed in the form of a unit. For the sake of clarity, EAR Units do not represent equity interests in any Group Company.
2.6 “Equitable Adjustment” means an amendment, modification, alteration or adjustment to one or more EAR Units (a) in connection with any transaction or transactions involving a Madison Air Company, (b) with respect to a particular Participant, in connection with any extraordinary circumstances related to such Participant and/or any change in terms of employment or employment status of such Participant, in each case which the Committee determines is necessary or advisable in order to effectuate the purpose and intent of the Plan and the grant of such EAR Unit (or the Award which was converted into such EAR Unit) or (c) pursuant to Section 6.7.
2.7 “Grant Agreement” means a written grant agreement in such form as approved by the Committee from time to time pursuant to which a Participant received or receives an Award (if such Grant Agreement was effective prior to the Second Amendment Date) or EAR Units (if such Grant Agreement was or is effective on or after the Second Amendment Date).
2.8 “Grant Date” means, with respect to any EAR Unit, the date that such EAR Unit (or, if applicable, the Award which was converted into such EAR Unit) is granted or such other date which is determined by the Committee and is set forth in the Grant Agreement relating to such EAR Unit (or, if applicable, the Award which was converted into such EAR Unit).
2.9 “Group Companies” means the Company and all of its affiliates, collectively, from time to time, including the Madison Air Companies.
2.10 “IPO” means an initial registered offering of equity securities of the Company or any successor thereto to the public pursuant to an effective registration statement under the Securities Act, where such equity securities are listed on a nationally recognized exchange (including by means of a direct listing) or a bona fide business combination with a special purpose acquisition company with publicly traded equity securities.
2.11 “Madison Air Companies” means the Company and all of its Subsidiaries, collectively, from time to time.
2.12 “Omnibus Plan” means the Company’s 2026 Omnibus Incentive Plan, as amended, restated or otherwise modified from time to time.
2.13 “Participant” means a person who satisfies the eligibility conditions of Article V and to whom an EAR Unit (or an Award which has been converted into an EAR Unit) has been granted pursuant to a written Grant Agreement.
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2.14 “Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated association, corporation or other entity or any government entity, body or authority.
2.15 “Plan” means this Third Amended and Restated Madison Air Solutions Corporation Equity Appreciation Plan, as herein set forth and as may be amended from time to time.
2.16 “Sale” means either (a) a sale or conveyance of assets or equity interests, a merger or consolidation, or any combination of the foregoing, involving one or more of the Madison Air Companies or any direct or indirect owner thereof, following which the direct or indirect owners of the Company immediately prior to such transaction no longer own a direct or indirect interest (other than a nominal interest, as determined by the Committee) in any of the operating assets which were, immediately prior to such transaction, owned by the Madison Air Companies or (b) any other transaction which the Committee determines constitutes a Sale. For the sake of clarity, an IPO shall not constitute a Sale.
2.17 “Shares” means shares of Class A Common Stock of the Company.
2.18 “Subsidiary” means any Person of which the Company owns at the relevant time, directly or indirectly, at least 50% of the equity securities.
2.19 “Termination of Employment” means with respect to any Participant, the occurrence of any act or event (whether pursuant to an employment agreement or otherwise) that actually or effectively causes or results in such Participant’s ceasing, for whatever reason, to be an employee of any Madison Air Company, including, without limitation, retirement, death, disability, dismissal, or other termination of employment (whether or not at the election of the Participant and whether or not such termination, if at the election of any Madison Air Company, is for Cause or without Cause). A Termination of Employment shall occur with respect to a Participant who is employed by a Subsidiary if the Subsidiary shall cease to be a Subsidiary and the Participant shall not immediately thereafter become an employee of any continuing Madison Air Company.
In addition, certain other terms used herein have definitions given to them in the first place in which they are used.
Article III
ADMINISTRATION
The Plan shall be administered by the Committee. The Committee may authorize any of its members or officers of the Company to execute and deliver documents on behalf of the Committee for purposes of the Plan. The Committee may delegate to one or more of its members or officers of the Company such duties and responsibilities with respect to the Plan as it determines, provided that such delegation is evidenced by a writing executed by the Committee.
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Among other things, the Committee shall have the authority, at any time, without requiring the consent of any Participant or any other Person:
(a)
to select those key employees of the Madison Air Companies to whom EAR Units may be granted from time to time;
(b)
to determine whether and to what extent EAR Units are to be granted hereunder;
(c)
to determine the terms and conditions of any EAR Units granted hereunder;
(d)
to adjust, modify or amend any terms and conditions of any EAR Units to account for Equitable Adjustment; provided that no such adjustment, modification or amendment may be made if or to the extent that it would cause an outstanding EAR Unit to cease to be exempt from, or to fail to comply with, Section 409A of the Code;
(e)
to provide for any forms of Grant Agreement and any other agreements or documents to be utilized in connection with the Plan;
(f)
to make all determinations as to whether a Participant is eligible for and has met all the criteria for the settlement of EAR Units in Shares;
(g)
to determine the number of Shares to be distributed to Participants in connection with the settlement of EAR Units;
(h)
to determine whether and when an individual has incurred a Termination of Employment;
(i)
to determine whether EAR Units are to be adjusted or modified under the Plan or the terms of a Grant Agreement;
(j)
to adopt, alter, amend and rescind such policies, procedures, rules and regulations (which need not be in writing) as, in its opinion, may be advisable in the administration of the Plan;
(k)
to appoint and compensate agents, counsel, auditors or other specialists to aid it in the discharge of its duties;
(l)
to amend or terminate the Plan at any time; and
(m)
to make all other determinations related to the Plan.
The Committee shall have the authority to interpret the terms and provisions of the Plan and any EAR Units granted or issued under the Plan and any Grant Agreement and to otherwise supervise the administration of the Plan. The Committee’s policies and procedures may differ with respect to EAR Units granted at different times and with respect to EAR Units granted to different Participants (whether such EAR Units are granted at the same or at different times). Notwithstanding anything set forth in the Plan or in any Grant Agreement to the contrary, any
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determination made by the Committee pursuant to the provisions of the Plan or with respect to any EAR Units shall be made in the Committee’s sole discretion. All decisions made by the Committee pursuant to the provisions of the Plan shall be final and binding on all Persons, including the Company and the Participants. Any determination shall not be subject to de novo review if challenged in court.
Article IV
NUMBER OF EAR UNITS UNDER THE PLAN
The number of EAR Units (a) outstanding under the Plan at any time and (b) with respect to which Shares have been issued in settlement of vested EAR Units under the Plan shall not exceed, in the aggregate, the number of Shares available to be issued under the Omnibus Plan (the “Cap”). Shares delivered, withheld or surrendered to satisfy any tax obligations of any Participant with respect to the EAR Units shall be treated as having been issued and shall count against the Cap. If any EAR Units or Shares issued in settlement of any EAR Units are canceled, forfeited or terminated for any reason, such EAR Units (or the EAR Units with respect to which such Shares were issued) shall again be available under the Plan.
Article V
ELIGIBILITY
Any employee of one or more Madison Air Companies shall be eligible to participate in the Plan and receive EAR Units.
Article VI
GRANT OF EAR UNITS; VESTING; SETTLEMENT
6.1 General. Subject to the limitations set forth in Article IV, the Committee shall have authority to grant EAR Units under the Plan at any time or from time to time.
6.2 Grant. Any EAR Units granted under the Plan shall be evidenced by a Grant Agreement executed by the Company (at the direction of the Committee) and the Participant. Such Agreement shall embody the terms and conditions related to such grant. A person shall only be a Participant and shall only receive a grant of EAR Units if (and only to the extent that) a Grant Agreement has been entered into between such person and the Company (at the direction of the Committee). Notwithstanding any agreement to which any Madison Air Company is a party to the contrary or any promise made by an officer or director of any Madison Air Company to the contrary, all grants of EAR Units are and shall be at all times subject to the express terms and conditions set forth in the Plan.
6.3 Vesting; Related Approved Distribution Value. An EAR Unit will vest on the earlier of (a) that date which is 5 years from the Grant Date of such EAR Unit or such other date or dates as set forth in the Grant Agreement, subject to the applicable Participant’s continued employment through such date (a “Time Vesting Date”) and (b) the date of the consummation of a Sale, subject to the applicable Participant’s continued employment through such date (a “Sale Vesting Date”
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and, together with a Time Vesting Date, a “Vesting Date”)). If a Participant experiences a Termination of Employment for any reason, any EAR Units held by the Participant for which a Vesting Date has not yet occurred will be automatically forfeited without consideration.
6.4 Settlement of Vested EAR Units.
(a) Vested EAR Units will be settled in full within 60 days of the applicable Vesting Date (such period, the “Settlement Period”) by the issuance of that number of Shares equal to the number of such vested EAR Units, subject to the provisions of Section 8.5. Such Shares will be issued pursuant to the Omnibus Plan.
(b) As a condition to the issuance of any Shares pursuant to the Plan, Participant (or, in the event that Participant dies following the applicable Vesting Date but prior to the issuance of Shares, such Participant’s representative) shall be required to (i) execute and deliver to the Company a document acknowledging and agreeing that the applicable EAR Units are no longer outstanding and releasing all claims against the Group Companies, whether in connection with such EAR Units or otherwise, and (ii) execute and deliver to the Company such other documents that the Committee requests (the “Conditions”).
(c) If any Participant (or representative, as applicable) fails for any reason to satisfy the Conditions within the Settlement Period, (i) the Company may, at its sole option, in addition to all other remedies it may have, terminate all of the applicable Person’s rights in and to the applicable EAR Units, in which event, the applicable Person shall forfeit all such rights and shall have no further right, title or interest in or to any EAR Units or any Shares issuable in consideration therefor, and (ii) such Person shall indemnify or reimburse the Company for any and all liabilities, losses, damages, costs and expenses (including reasonable fees and expenses of attorneys) which any Madison Air Company may suffer, sustain or incur directly or indirectly arising out of, relating to or otherwise by virtue of enforcing its rights hereunder or bringing any claims with respect thereto.
6.5 Nontransferability of EAR Units. No EAR Unit shall be transferable by or on behalf of any Participant. No Participant shall be permitted to sell, assign, transfer, pledge or otherwise encumber his or her EAR Units, or any portion thereof, or any interest therein.
6.6 Bad Conduct. If any Participant (a) breaches any of such Participant’s obligations under Article VII of the Plan or any other restrictive covenants to which such Participant is bound with respect to the Madison Air Companies or (b) experiences a Termination of Employment for Cause, in each case as determined by the Committee, the Committee shall have the authority to reduce, terminate, recapture or cause the forfeiture of any EAR Units and/or any Shares issued upon settlement of any EAR Units. In such instance, the applicable Participant (or such Participant’s successor or transferee, as applicable) shall execute and deliver to the Company all documents requested by the Committee in connection therewith within ten days. If any Person fails for any reason to comply with the immediately preceding sentence, (i) the Committee may, at its sole option, in addition to all other remedies it may have, terminate or transfer all of the applicable Person’s rights in and to the applicable EAR Units and/or Shares and the applicable Person shall have no further right, title or interest in or to any EAR Units or Shares issued in settlement thereof, and (ii) such Person shall indemnify or reimburse the Company for any and all
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liabilities, losses, damages, costs and expenses (including reasonable fees and expenses of attorneys) which any Madison Air Company may suffer, sustain or incur directly or indirectly arising out of, relating to or otherwise by virtue of enforcing its rights hereunder or bringing any claims with respect thereto.
6.7 Adjustments. If the Company at any time subdivides (by any split, recapitalization or otherwise) the outstanding Shares into a greater number of Shares, or combines (by reverse split, combination, or otherwise) its outstanding Shares into a lesser number of Shares, then (A) the aggregate number or kind of securities that thereafter may be issued under this Plan and (B) the number of EAR Units, or the number of Shares covered by outstanding EAR Units may be appropriately adjusted by the Committee to prevent dilution or enlargement of the rights granted to, or available for, Participants under this Plan; provided, that the Committee in its sole discretion shall determine whether an adjustment is appropriate.
Article VII
RESTRICTIVE COVENANTS
7.1 General. The grant of EAR Units represents a substantial economic benefit to the respective Participant. Each Participant, through his or her role with the Group Companies, has access to and is involved in the formulation of certain confidential and secret information of the Group Companies regarding their operations. Each Participant could materially harm the business of the Group Companies by competing with the Group Companies or soliciting employees or customers of the Group Companies. To protect the Group Companies, as a condition to the receipt of a EAR Units, each Participant must agree in writing to be bound by the terms of this Article VII.
7.2 Confidential Information.
(a) Subject to Section 7.2(b) below, at no time during or after a Participant’s employment with any of the Group Companies will such Participant (a) use Confidential Information (as defined below) for any purpose other than in connection with such employment for the benefit of the Group Companies as directed by such Group Company or (b) disclose Confidential Information to any Person other than the Group Companies or Persons to whom disclosure has been authorized in writing by any of the Group Companies, except that such Participant may disclose such Confidential Information to the minimum extent necessary to comply with governmental or judicial process, so long as such Participant notifies in writing the applicable Group Company of such pending disclosure in advance and consults with the applicable Group Company concerning the advisability of seeking a protective order or other means of preserving the confidentiality of the Confidential Information). Each Participant also agrees not to disclose any confidential or proprietary information that any of the Group Companies obtain from a third party which such Group Company treats as confidential or proprietary or designates as confidential, whether or not such information is owned or developed by such Group Company. Upon Termination of Employment, or at any other time such Group Company requests, each Participant will deliver promptly to the respective Group Company all memoranda, notes, records, reports and other documents, and all copies thereof, in any form relating to the business of any of the Group Companies or members of their affiliated groups that such Participant obtained while
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employed by, or otherwise serving or acting on behalf of, such Group Company and that such Participant may then possess or otherwise control. As used herein, “Confidential Information” means all information of a technical or business nature relating to the Group Companies, including, without limitation, trade secrets, inventions, drawings, file data, documentation, diagrams, specifications, know-how, processes, formulae, models, test results, marketing techniques and materials, marketing and development plans, price lists, pricing policies, business plans, information related to acquisition plans or targets, information related to joint venture or other strategic affiliation plans or targets, information relating to customer or supplier identities, characteristics and agreements, financial information and projections, flow charts, software at any stage of development, source codes, object codes, research and development procedures, and employee files and information. Confidential Information shall not include any information that has become public knowledge through no fault of such Participant or any Person acting in concert with such Participant.
(b) Notwithstanding anything to the contrary herein, the Plan will not limit any Participant’s rights under applicable law to initiate communications directly with, provide information to, respond to any inquiries from, or report possible violations of law or regulation to any governmental entity or self-regulatory authority, or to file a charge with or participate in an investigation conducted by any governmental entity or self-regulatory authority. In addition, it is understood that the Plan shall not require a Participant to notify any Group Company of the Participant’s decision to file a charge or complaint with or participate in an investigation conducted by any governmental entity or self-regulatory authority. Despite the foregoing, Participants are not permitted to reveal to any third party, including any governmental entity or self-regulatory authority, information the Participant came to learn during his or her service to the Group Companies that is protected from disclosure by any applicable privilege, including but not limited to the attorney-client privilege or attorney work product doctrine, and the Group Companies do not waive any applicable privileges or the right to continue to protect their privileged attorney-client information, attorney work product, and other privileged information.
7.3 Intellectual Property. Any Confidential Information, as well as any idea, invention, copyrightable or patentable work, improvement, technique, development, product, service, computer technology, software, and the like, whether tangible or intangible, directly or indirectly resulting or arising from, or created through, the Group Companies’ business, in which a property interest exists or may exist if asserted under an applicable law (hereafter “Intellectual Property”), regardless of form, shall be the sole and exclusive property of the respective Group Company. All copyrightable Intellectual Property shall be deemed “works for hire” under the United States Copyright Act and any similar law of any other jurisdiction. To the extent that a Participant retains any interests in such Intellectual Property, such Participant, without requiring the provision of additional consideration, (i) hereby irrevocably transfers and assigns to any of the Group Companies his or her entire interest in such Intellectual Property, including all patents, trade secrets, copyrights, and renewals of copyrights; (ii) shall execute whatever assignments and other documents that such Group Companies may reasonably request of such Participant to vest full title of such Intellectual Property in the respective Group Company; and (iii) shall comply with all reasonable requests by the Group Companies to assist the Group Companies in enforcing and defending their rights in such Intellectual Property against any Person.
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7.4 Non-Competition. Each Participant agrees that, during his or her employment with any Group Company and for one (1) year after any Termination of Employment (the “Restricted Period”), such Participant will not, directly or indirectly, on behalf of himself or herself or any other Person:
(a) own, operate, be employed by, consult with, participate in, be connected in any capacity with, or otherwise derive any economic benefit from, any Person that engages in any activity which is competitive with the business of any of the Group Companies;
(b) solicit, induce, recruit, or encourage any Customer (as defined below), Potential Customer (as defined below), sales representative or distributor of any of the Group Companies to purchase or acquire any products or services which is competitive with those provided or performed by any of the Group Companies;
(c) solicit, induce or encourage any Customer, Potential Customer, Supplier (as defined below), Potential Supplier (as defined below), sales representative or distributor of any of the Group Companies to terminate its business relationship with any Group Company; or
(d) engage or assist in any activities that result in or are intended to result in diversion of clients, Customers, Suppliers, sales representatives, distributors, income, goodwill, or any other thing of value from any of the Group Companies to the Participant or to any other Person.
For purposes of these provisions, “Customer” means any Person which purchased or received goods or services from any of the Group Companies during the 36 months immediately preceding the measurement date. “Potential Customer” means any Person which contacted, was been contacted by, or was otherwise identified by any of the Group Companies as a possible Customer during the 36 months immediately preceding the measurement date. “Supplier” means any Person which provided goods or services to any of the Group Companies during the 36 months immediately preceding the measurement date. “Potential Supplier” means any Person which contacted, was contacted by, or was otherwise identified by any of the Group Companies as a possible Supplier during the 36 months immediately preceding the measurement date.
7.5 Non-Solicitation. Each Participant agrees that during the Restricted Period, such Participant shall not directly or indirectly, alone or in concert with others, recruit, solicit or induce, or attempt to recruit, solicit or induce, a person who is or was an employee of any Group Company at any time during the Restricted Period to terminate such person’s employment with, or otherwise cease or alter such person’s relationship with, any of the Group Companies.
7.6 Enforcement. Each Participant agrees that the restrictions contained in this Article VII are necessary for the protection of the business and goodwill of the Group Companies and are considered by such Participant to be reasonable for that purpose, and that the scope of restricted activities, the geographic scope of such restrictions, and the duration of the restrictions set forth in this Article VII are considered by such Participant to be reasonable. Each Participant agrees that the restrictions contained in this Article VII will not interfere with such Participant’s ability to earn a living. Each Participant further agrees that any breach of any provision of this Article VII will cause the Group Companies substantial and irrevocable harm for which money damages will be inadequate, and therefore, in the event of any such breach or threatened breach, the Group
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Companies shall be entitled to specific performance and injunctive relief, in addition to such other remedies as may be available. Each Participant further agrees that to the extent any provision or portion of this Article VII shall be held, found or deemed to be unreasonable, unlawful or unenforceable by a court of competent jurisdiction, then any such provision or portion thereof shall be deemed to be modified to the extent necessary in order that any such provision or portion thereof shall be legally enforceable to the fullest extent permitted by applicable law. Each Participant agrees that the Company shall have no obligation to deliver Shares to such Participant with respect to any vested EAR Units at any time while, or after, such Participant is in breach of any provision of Article VII.
Article VIII
AMENDMENTS AND CHANGES TO PLAN, AGREEMENTS, AND EAR UNITS; MISCELLANEOUS
8.1 Amendments and Termination of Plan. Notwithstanding anything set forth in the Plan to the contrary and unless otherwise provided in a Grant Agreement, the Committee may, at any time amend, modify or alter the Plan in any manner it chooses, including but not limited to, Equitable Adjustments, provided that no such amendment, modification or alteration may be made if or to the extent that it would cause an outstanding EAR Unit to cease to be exempt from, or to fail to comply with, Section 409A of the Code, and provided that, other than Equitable Adjustments, any such amendment, modification or alteration may not materially adversely impair the rights of a Participant with respect to any outstanding EAR Units without the Participant’s consent.
8.2 Amendments and Termination of Agreements and EAR Units. Notwithstanding anything set forth in the Plan to the contrary and unless otherwise provided in a Grant Agreement, the Committee may at any time and without the consent of the applicable Participant, amend, modify or otherwise alter the terms of any Grant Agreement or EAR Unit; provided that no such amendment, modification or alteration may be made if or to the extent that it would cause an outstanding Agreement or EAR Unit to cease to be exempt from, or to fail to comply with, Section 409A of the Code, and provided that other than Equitable Adjustments, any such amendment, modification or alteration may not materially adversely impair the rights of a Participant with respect to any outstanding EAR Units without such Participant’s consent. Furthermore, the modification or termination of one Participant’s Grant Agreement or underlying EAR Units shall not obligate the Committee to amend, modify or terminate any other Person’s or Participant’s Grant Agreement or underlying EAR Units and shall have no effect on any other Person’s or Participant’s Grant Agreement or underlying EAR Units.
8.3 Unfunded Status of Plan. It is intended that the Plan be an “unfunded” plan for incentive and deferred compensation.
8.4 No Additional Obligation. Nothing contained in the Plan shall prevent any Madison Air Company from adopting other or additional compensation arrangements for its employees.
8.5 Taxes. Participants will be solely responsible for all applicable taxes (including, without limitation, income, excise and the employee and employer portions of any payroll taxes)
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and penalties, and any interest that accrues thereon, incurred in connection with the receipt, vesting or settlement of any EAR Unit and the receipt, ownership and disposition of any Shares. As a condition to the delivery of any Shares, or any cash or other securities or property pursuant to the settlement of any EAR Unit, or in connection with any other event that gives rise to a federal or other governmental tax withholding obligation on the part of the Company or any other taxable event relating to an EAR Unit:
(a) the Company may deduct or withhold (or cause to be deducted or withheld) the applicable amount from any payment or distribution to a Participant whether or not pursuant to the Plan (including in the form of Shares otherwise deliverable),
(b) the Committee may require that the Participant remit the applicable amount in cash to the Company (through payroll deduction or otherwise), or
(c) the Company may enter into any other arrangements it determines to be suitable to withhold, in each case in the Company’s discretion, the amounts of such taxes to be withheld based on the individual tax rates applicable to the Participant.
8.6 Controlling Law; Exclusive Jurisdiction; Waiver of Jury Trial. The Plan and all EAR Units and Shares issued in settlement thereof, and all actions taken under the Plan, shall be governed by and construed in accordance with the laws of the State of Delaware, except for its law respecting choice of law. The Plan shall be construed to comply with all applicable laws and to avoid liability to all Group Companies and all Participants, where possible. Any litigation arising out of or related to the Plan, any EAR Units, any Shares issued in settlement thereof, or any actions taken under the Plan, shall be filed only in the state or federal courts in the State of Delaware. All Participants consent and submit to the exclusive jurisdiction and venue of such courts, waive any objection based on the convenience of such venues, and agree to not seek to change venue. NO PARTICIPANT SHALL HAVE ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR CAUSE OF ACTION IN ANY LEGAL PROCEEDING ARISING OUT OF RELATED TO THE PLAN OR ANY EAR UNIT (OR ANY AWARD WHICH WAS CONVERTED INTO AN EAR UNIT) GRANTED OR ANY ACTIONS TAKEN UNDER THE PLAN OR THE TRANSACTIONS OR EVENTS CONTEMPLATED HEREBY OR THEREBY OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENTS, OR ACTIONS IN CONNECTION HEREWITH OR THEREWITH, REGARDLESS OF WHO INITIATED SUCH LEGAL PROCEEDING. ANY AND ALL SUCH CLAIMS AND CAUSES OF ACTION SHALL BE TRIED BY THE COURT WITHOUT A JURY. NO SUCH ACTION OR LEGAL PROCEEDING SHALL BE CONSOLIDATED WITH ANY LEGAL PROCEEDING IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
8.7 Offset. Any amounts owed of any nature to any Group Company by any Participant may be offset by the Company from the value of any cash, securities or other property payable under the Plan or relevant Agreement to the extent permitted by Section 409A of the Code and applicable law. No cash, securities or other property payable under the Plan or relevant Agreement shall be transferred unless and until all disputes between any Group Company and such Participant have been fully and finally resolved, and the Participant has waived all such claims against all Group Companies.
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8.8 No Effect on Benefits. Payments under the Plan shall constitute special discretionary incentive payments to the Participants and shall not be required to be taken into account in computing the amount of salary or compensation of the Participants for the purpose of determining any contributions to or any benefits under any pension, retirement, profit-sharing, incentive, life insurance, overtime, severance or other benefit plan of the Company or under any agreement with a Participant, unless the Company or such other arrangement specifically provides otherwise.
8.9 Mitigation of Excise Tax. In the event that any payments or benefits provided for in the Plan or otherwise payable to a Participant, whether in cash or Shares (collectively, the “Payments”) (a) constitute “parachute payments” within the meaning of Section 280G of the Code, and (b) but for this Section 8.9, would be subject to the excise tax imposed by Section 4999 of the Code, then the Payments will be either (i) delivered in full or (ii) delivered as to such lesser extent that would result in no portion of the Payments being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and employment taxes and the excise tax imposed by Section 4999 of the Code (and any equivalent state or local excise taxes), results in the receipt by the Participant on an after-tax basis, of the greatest amount of Payments, notwithstanding that all or some portion of such Payments may be taxable under Section 4999 of the Code. The determination of whether any reduction in the rights or payments under the Plan is to apply shall be made by the Committee after consultation with the Participant, and such determination shall be conclusive and binding on the Participant. The Participant shall cooperate in good faith with the Committee in making such determination and providing the necessary information for this purpose.
8.10 No Rights with Respect to Continuance of Employment. Nothing contained herein or in any Grant Agreement shall be deemed to alter the relationship between any Madison Air Company and a Participant, or the contractual relationship between Madison Air Company and a Participant, if there is a written contract regarding such relationship. Nothing contained herein shall be construed to constitute a contract of employment between any Madison Air Company and a Participant. The respective Madison Air Companies and each Participant continue to have the right to terminate the employment or service relationship at any time for any reason, except as may be provided in a separate, written contract. No Madison Air Company shall have any obligation to retain the Participant in its employ or service as a result of the Plan or any Grant Agreement. There shall be no inference as to the length of employment or service hereby, and each Madison Air Company reserves the same rights to terminate the Participant’s employment or service as existed prior to the individual becoming a Participant.
8.11 Headings. The headings contained in the Plan are for reference purposes only and shall not affect the meaning or interpretation of the Plan.
8.12 Severability. If any provision of the Plan shall for any reason be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision, and the Plan shall be construed as if such invalid or unenforceable provision were omitted.
8.13 409A. The Company intends that payments under the Plan shall be exempt from Section 409A of the Code as short-term deferrals and shall not constitute “deferred compensation” within the meaning of Section 409A of the Code. The Plan shall be interpreted, construed and administered in accordance with the foregoing intent, so as to avoid the imposition of taxes and
-12-
penalties on Participants pursuant to Section 409A of the Code. No Group Company shall have any liability to any Participant or otherwise if the Plan or amounts paid or payable hereunder are subject to the additional tax and penalties under Section 409A of the Code.
8.14 Successors and Assigns. The Plan shall inure to the benefit of and be binding upon each successor and assign of the Company. All obligations imposed upon a Participant, and all rights granted to the Company hereunder, shall be binding upon the Participant’s heirs, legal representatives and successors. Each Group Company other than the Company is an express third party beneficiary of the obligations of all Participants under the Plan or any Grant Agreement, entitled to enforce such obligations directly.
8.15 Entire Agreement. The Plan, the Agreements and any documents to be executed upon the issuance of Shares in connection with EAR Units constitute the entire agreement between the Group Companies and the Participants with respect to any equity, phantom equity or other equity appreciation rights granted or to be granted to any Participant by any Group Company in consideration for services performed or to be performed by such Participant (“Equity Rights”) and supersede all prior oral or written agreements, understandings or promises involving or made by any Group Company or any of their respective officers, directors, managers, partners or employees to any Participant with regard to Equity Rights, including the Prior Plan. In the event of any inconsistency between the Plan and a Grant Agreement or any other written document related to an Award under the Plan, the terms and conditions of the Plan shall control. No grant of Equity Rights or purported grant of Equity Rights shall be enforceable against any Group Company unless such grant or purported grant is approved by the Committee and evidenced by a Grant Agreement.
8.16 No Rights as an Equityholder. Prior to delivery of Shares, nothing in the Plan shall be construed to give a Participant any rights or incur any obligations as an equity holder of any Group Company, or otherwise with respect to any Shares or other equity interests of any Group Company, including, without limitation, in the event any distributions are made by the Company with respect to Shares or made by any other Group Company with respect to its equity interests, any rights to any cash or other payments from the Company or such Group Company at any time, including in connection with or after the issuance of Shares.
8.17 No Liability. None of the Committee, any Group Company, any affiliate of any Group Company or their respective members, officers, directors, managers, shareholders, employees, advisory board members, agents or attorneys shall have any liability or obligation whatsoever, in damages or otherwise, to any Participant or any other Person (i) for any act or omission in connection with any EAR Unit, any Shares issued in settlement thereof or any Grant Agreement or (ii) as a result of any amendment, modification, alteration or termination of the Plan or a Grant Agreement, or (iii) to compensate any Participant or any other party with respect to or as a result of any amendment, modification, alteration or termination of the Plan or a Grant Agreement.
8.18 Indemnification. The officers, directors, members, managers, shareholders, agents, affiliates, employees, and advisory board members of the Madison Air Companies and the officers, directors, members, managers, shareholders, agents, employees, and advisory board members of the affiliates of the Madison Air Companies, as well as the Committee and each of its members, shall be indemnified and held harmless by the Madison Air Companies against and from any and
-13-
all loss, cost, liability, or expense that may be imposed upon or reasonably incurred by them in connection with or resulting from any claim, action, suit, or proceeding to which they may be a party or in which they may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by them in settlement (with the Company’s written approval) or paid by them in satisfaction of a judgment in any such action, suit, or proceeding. Nothing set forth in this Section 8.18 shall grant to any rights to any Participant or any successor to or transferee of any Participant, in each case in their capacity as such.
8.19 Outstanding Awards. The Plan, as hereby amended and restated, shall govern all rights and obligations of all Awards outstanding on the date hereof, and of the Participants holding such Awards with respect thereto, notwithstanding any change in such rights and obligations from those in effect prior to the amendment and restatement of the Plan.
IN WITNESS WHEREOF, as of the Effective Date, the Company hereby amends and restates the Plan in its entirety as set forth herein, and approves and adopts this Third Amended and Restated Equity Appreciation Plan of the Company.
MADISON AIR SOLUTIONS CORPORATION
By:
/s/ JJ Foley
Name:
JJ Foley
Title:
Chief Financial Officer
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EX-99.1
EX-99.1
Filename: ck0002098430-ex99_1.htm · Sequence: 16
EX-99.1
Exhibit 99.1
Madison Air Announces Pricing of Initial Public Offering
CHICAGO, IL, April 15, 2026 — Madison Air Solutions Corporation (“Madison Air”) today announced the pricing of its initial public offering of 82,692,308 shares of its Class A common stock at a public offering price of $27.00 per share. In addition, Madison Air has granted the underwriters a 30-day option to purchase up to an additional 12,403,846 shares of its Class A common stock at the initial public offering price, less underwriting discounts and commissions.
The shares are expected to begin trading on the New York Stock Exchange on April 16, 2026 under the ticker symbol “MAIR,” and the offering is expected to close on April 17, 2026, subject to customary closing conditions.
Goldman Sachs & Co. LLC, Barclays, Jefferies and Wells Fargo Securities are acting as lead bookrunning managers for the proposed offering.
BofA Securities, Citigroup, Baird, RBC Capital Markets, Guggenheim Securities, Santander, Wolfe | Nomura Alliance and CIBC Capital Markets are acting as book-running managers.
Comerica Securities, William Blair, Stifel, Capital One Securities and PNC Capital Markets LLC are acting as co-managers.
In addition to the shares being sold in the initial public offering, Madison Air has agreed to sell $100.0 million of its Class B common stock in a concurrent private placement to one of its existing investors, an entity controlled by Madison Air’s founder, Larry Gies, at a price per share equal to the initial public offering price. The sale of the shares of Class B common stock in the concurrent private placement will not be registered under the Securities Act of 1933, as amended. The closing of the concurrent private placement is expected to be completed concurrently with the closing of the initial public offering.
The initial public offering is being made only by means of a prospectus. Copies of the final prospectus relating to the offering, when available, may be obtained for free by visiting EDGAR on the SEC’s website at www.sec.gov. Alternatively, copies of the preliminary prospectus may be obtained from: Goldman Sachs & Co. LLC, Prospectus Department, 200 West Street, New York, NY 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316 or by emailing Prospectus-ny@ny.email.gs.com; Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 by calling 1-888-603-5847 or by email at barclaysprospectus@broadridge.com; Jefferies LLC, Attention: Equity Syndicate Prospectus Department, 520 Madison Avenue, New York, NY 10022 by calling (877) 821-7388 or by email at Prospectus_Department@Jefferies.com; or Wells Fargo Securities, 90 South 7th Street, 5th Floor, Minneapolis, MN 55402, at 800-645-3751 (option #5) or email a request to WFScustomerservice@wellsfargo.com.
A registration statement relating to the securities sold in the initial public offering has been filed with, and declared effective by, the U.S. Securities and Exchange Commission. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Madison Air
Madison Air is an air quality solutions provider for priority commercial and residential markets. Through its portfolio of trusted brands, including Addison, AprilAire, Big Ass Fans, Broan-NuTone, Nortek Air Solutions, Nortek Data Center Cooling and Reznor, the company helps customers improve performance, protect critical assets and create healthier indoor environments. Madison Air’s mission is to make the world safer, healthier and more productive through the power of better air.
Investor Relations Contact:
Steve Low-Tufo
slowtufo@madison.net
+1-203-260-2262
Media Contact:
Christine Carey
ccarey@madisonair.com
+1-612-447-3457
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