STATE OF NORTH CAROLINA
FOURTH MODIFIED REDEMPTION AGREEMENT
COUNTY OF MECKLENBURG
THIS FOURTH MODIFIED REDEMPTION AGREEMENT is dated September 14, 1994,
by and between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the "Stockholder") and ▇▇▇▇▇▇▇▇ INDUSTRIES,
INC. (the "Company").
W I T N E S S E T H:
The parties hereto have previously entered into a Redemption Agreement
dated May 31, 1974, that was mutually terminated by Agreement dated March 6,
1980, reinstated and modified by Modified Agreement dated April 14, 1987 and
thereafter further modified by a Second Modified Redemption Agreement dated
September 30, 1991, and by a Third Modified Redemption Agreement dated July
14, 1993 (all collectively known as the "Redemption Agreement"); and
The parties desire to further modify the Redemption Agreement in certain
respects, mainly to reduce the amount to be set aside for the costs of
transition and management upon the death of the Stockholder, to remove surplus
language, and to restate the Agreement in its entirety, to enhance its
readability;
NOW, THEREFORE, the restated Agreement reads as follows:
WHEREAS, the Stockholder owns a substantial portion of the outstanding
common stock of the Company; and
WHEREAS, the Stockholder desires assurance that if he should pass away his
Estate will have sufficient funds to pay estate and inheritance taxes and
expenses incident to the transfer of his Estate; and
WHEREAS, it is in the interest of the Company and its stockholders that
arrangements be made for redemption of all or a portion of the common stock of
Stockholder in the event of his decease; and
WHEREAS, the Company has secured ordinary life insurance policies on the
life of the Stockholder in the principal sum of $1,150,000, the proceeds of
which are payable to the Company;
It is therefore agreed:
1. Purchase of Securities. Upon the decease of the Stockholder, the
Company, upon written demand made by the legal representatives of the Estate
of the Stockholder at any time within two (2) years after decease, will
purchase all or a portion of the common stock of the Company owned by the
Stockholder on the date of his death (the common stock being hereinafter
referred to as the
Securities) in accordance with the terms and conditions
hereinafter set forth.
2. Purchase Price. The "purchase price" for each share of common stock sold
hereunder shall be equal to the fair market value per share less a discount of
5% from said fair market value. Said purchase price shall be determined as of
the date the option granted the legal representatives of the Estate of the
Stockholder is exercised by written notice to the Company under paragraph 1
hereof. For the purpose hereof, the term "fair market value" per share shall
mean the last sale price in the over-the-counter market reported on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ") on such date, or the last sale price reported on the NASDAQ National
Market System on such date, whichever is applicable, or, if no sale of the
common stock takes place on such date, the average of the closing high bid and
low asked price in the over-the-counter market reported on NASDAQ on such date
or the average of such prices reported on the NASDAQ National Market System on
such date, whichever is applicable. If there is no such last sale price or
closing high bid and low asked prices reported on such date, then the fair
market value per share shall be determined by the Board of Directors in
accordance with the regulations promulgated under Section 2031 of the Internal
Revenue Code of 1986, as amended, or by any appropriate method selected by the
Board of Directors. However, notwithstanding any provision of this agreement to
the contrary, in no event shall the total purchase price to be received by the
Estate of the Stockholder exceed the proceeds of life insurance, including
double indemnity in the event of accidental death, paid to the Company by
reason of the Stockholder's death under the policy or policies carried by the
Company on the life of the Stockholder under paragraph 3 hereof.
3. Insurance. The Company will, from the date of this agreement to the
date of Stockholder's death, except and to the extent otherwise consented or
agreed to by Stockholder, maintain in effect at all times the $1,150,000 of
life insurance for its benefit now carried on the life of the Stockholder to
provide to the Company on the death of the Stockholder available funds for the
purchase price of the Securities to be purchased by the Company hereunder.
A. Description of Policies. Notwithstanding any provision of this
Redemption Agreement to the contrary, the Stockholder and the Company
hereby agree that the $1,150,000 of life insurance maintained by the
Company under paragraph 3 hereof consists of Crown Life Insurance Company
Policy No. 1983892 in the amount of $400,000 and Sun Life Assurance
Company of Canada Policy No. UB8126194R in the amount of $750,000. All
references in the Redemption Agreement or any exhibit thereto to Phoenix
Mutual Life Insurance Co. Policy No. 2060237 in the amount of $1,150,000
and Sun Life Assurance
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Company of Canada Policy No. UB8126193V in the
amount of $2,000,000 are hereby deleted.
4. Priority for Application of Insurance Proceeds. The obligation of the
Company hereunder is subject to the following payments which will be the
priority for disbursement of the proceeds of the policies owned by the Company
on the life of the Stockholder:
A. To repay policy loans.
B. To the extent possible, to use the balance of such insurance
proceeds to redeem the stock of the Stockholder.
5. Limitations on Obligation of Company. The fulfillment of the
obligations of the Company herein is subject to the compliance with the
statutes of the state of incorporating of the Company, and the Company agrees
to take all appropriate steps to comply with applicable statutes.
6. Closing. Upon receipt by the Company of a written demand by the legal
representatives of the Estate of the Stockholder that the Company purchase the
Securities, the Company shall notify the legal representatives that such
purchase and sale of the Securities shall take place at a specified time and
place within 60 days after its receipt of such written demand at the principal
office of the Company or at such other time and place as is mutually agreed
upon by the Company and the legal representatives. At the closing of the
purchase and sale of the Securities, upon delivery to the Company by the legal
representatives of the Estate of the Stockholder of the Securities to be
redeemed in proper form, from and clear of all encumbrances, and duly endorsed
for transfer to the Company, the Company shall deliver to the representatives
the purchase price of such securities.
7. Notices. All notices and demands under this Agreement shall be in
writing, and if to the Company will be duly given if delivered by hand to an
officer, or if addressed and mailed by Certified Mail, return receipt
requested, to the Company at ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, or at such other address as the Company may hereafter designate by
notice, or, if to the Stockholder, will be duly given if delivery by hand by an
officer of the Company, or if addressed and mailed, by Certified Mail, return
receipt requested, to the Stockholder or to his legal representative at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other address as
may appear as the home address of the Stockholder in the records of the
Company.
8. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company, its successors, and assigns, including but not
limited to any corporation or entity which may acquire all or substantially all
of the Company's assets
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and business or with or into which the Company may be
consolidated or merged. This Agreement shall inure to the benefit of and be
binding upon the Stockholder, his executors and administrators, but may not be
assigned by the Stockholder except to his executors and administrators.
9. Entire Agreement. This instrument contains the entire agreement of the
parties. It may not be amended or terminated orally, but may be amended only be
an agreement in writing signed by the parities. This Agreement will be governed
by the laws of the state of incorporation of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement pursuant to
authority duly given, this 14 day of September, 1994.
▇▇▇▇▇▇▇▇ INDUSTRIES, INC.
[CORPORATE SEAL] Signature of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
ATTEST: By: [Signature]
President
[Signature of ▇▇▇▇▇ ▇▇▇▇▇]
[Signature]
[Signature] [SEAL]
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
