EXHIBIT 10.15
STOCK PURCHASE AND RESTRICTION AGREEMENT
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STOCK PURCHASE AND RESTRICTION AGREEMENT by and between R&D Systems
Company, a Delaware corporation (the "Company"), and Xxx X. Xxxxxx (the
"Officer"), dated as of March 14, 1996.
WHEREAS, the Officer is the Chief Executive Officer of the Company and
is purchasing 640,845 shares of the Company's Common Stock at a purchase price
of $0.50 per share; and
WHEREAS, the parties hereto believe that it is in the best interests of
the Company and the Officer to provide for certain rights and obligations of the
Company and the Officer with respect to the Shares under certain circumstances.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows:
Section 1. Definitions. For the purposes of this Agreement, the
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following terms shall have the following respective meanings:
(a) "Act" shall mean the Securities Act of 1933, as
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amended, and the rules and regulations thereunder.
(b) "Common Stock" shall mean the Company's Common
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Stock, par value $.01 per share.
(c) "Non-Vested Shares" shall mean all the Shares that
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are not Vested Shares.
(d) "Shares" shall mean the 640,845 shares of Common
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Stock being purchased by the Officer on the date hereof and any additional
shares of Common Stock received as a dividend on, or otherwise on account of,
the Shares.
(e) "Termination Event" shall mean the termination of the
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Officer as an employee of the Company, whether by reason of retirement,
discharge or any other reason, voluntary or involuntary.
(f) "Vested Shares" shall initially mean none of the
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Shares owned by the Officer on the date hereof, which number shall be increased
as follows:
(i) an additional 51,496.50 Shares on each of
June 30, September 30, December 31, and March 31, commencing on June 30, 1996
and continuing through and including March 31, 1998, so long as, in each case,
the Officer remains an employee of the Company on such date;
(ii) an additional 5,721.825 Shares on each
June 30, September 30, December 31, and March 31, commencing on June 30, 1996
and continuing through and
including March 31, 2006, so long as, in each case, the Officer remains an
employee of the Company on such date, provided, however, that, (A) in the event
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that the Company redeems the Senior Redeemable Preferred Stock issued or
issuable to the Investors (as defined in a certain Stock Purchase Agreement
dated the date hereof by and among the Company, the Investors and certain other
parties identified on the signature pages thereto (the "Investor Agreement")) in
full and in accordance with the terms thereof on or prior to September 30, 1997
and the Officer remains an employee of the Company on such date, the excess of
the following amount shall become Vested Shares hereunder (x) 45,774.6 Shares
minus (y) the number of Shares that have vested through such date on a quarterly
basis under this Section 1(g)(ii) and which have not previously been applied to
reduce the number of Shares subject to accelerated vesting hereunder ("Vested
Reduction Amount") and (B) if the Company achieves the Revenue and Operating
Profit targets set forth under either of Schedule A or B on Exhibit A hereto for
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any of calendar years 1996, 1997, 1998 and 1999 and the Officer remains an
employee of the Company on the date when the audited financial statements for
such year are delivered, the excess of the following amounts shall become Vested
Shares hereunder for each year with respect to which such targets are achieved:
(x) 45,774.6 Shares minus (y) the Vested Reduction Amount; provided, however,
that if none of the relevant Schedule A or B targets are met in a particular
calendar year through 1999, the Officer shall nonetheless be entitled to the
accelerated vesting provided hereunder for such year if the Company achieves
Revenue and Operating Profit levels for the following year which exceed the
relevant Schedule A or Schedule B targets for such following year by amounts
which equal or exceed the amounts by which the Company failed to achieve the
Revenue and Operating Profit targets on that Schedule for the prior year and the
Officer remains an employee of the Company when the audited financial statements
for such following year are delivered. The number of shares set forth in this
Section 1(f) shall be equitably adjusted to reflect any stock splits, stock
dividends and the like.
Section 2. Purchase and Sale of Shares; Investment Representations.
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(a) Purchase and Sale. On the date hereof and pursuant to the Company's
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1996 Stock Option and Grant Plan, the Company hereby sells to the Officer, and
the Officer hereby purchases from the Company, the Shares at a purchase price of
$0.50 per Share payable in cash for an aggregate purchase price of $320,242.50.
The Company and the Officer agree that the aggregate fair market value of the
Shares as of the date of this Agreement is $320,242.50.
(b) Investment Representations. In connection with the purchase and
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sale of the Shares contemplated by Section 2(a) above, the Officer hereby
represents and warrants to the Company as follows:
(i) The Officer is purchasing the Shares for his own
account for investment only, and not for resale or with a view to the
distribution thereof.
(ii) The Officer has had such an opportunity as he has
deemed adequate to obtain from representatives of the Company such information
as is necessary to permit him to evaluate the merits and risks of his investment
in the Company.
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(iii) The Officer has sufficient experience in business,
financial and investment matters to be able to evaluate the risks involved in
the purchase of the Shares and to make an informed investment decision with
respect to such purchase.
(iv) The Officer can afford a complete loss of the value of
the Shares and is able to bear the economic risk of holding such Shares for an
indefinite period.
(v) The Officer understands that the Shares are not
registered under the Act or any applicable state securities or "blue sky" laws
and may not be sold or otherwise transferred or disposed of in the absence of an
effective registration statement under the Act and under any applicable state
securities or "blue sky" laws (or exemptions from the registration requirements
thereof).
Section 3. Repurchase Option.
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3.1. Repurchase Option. In the event of a Termination Event, the
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Company shall have the right and option (the "Repurchase Option") to repurchase
all, but not less than all, of the Non-Vested Shares at a per share repurchase
price equal to the aggregate of (i) $0.50 (adjusted for stock splits, stock
dividends and the like) plus (ii) the documented, per share amount of any taxes
paid by the Officer with respect to such Non-Vested Shares on account of Section
83 of the Internal Revenue Code of 1986, as amended minus (iii) the amount of
any tax reduction realized by the Officer during the tax year in which the
repurchase occurs as a result of the application of the capital loss
attributable to the repurchase to offset other capital gains. The Company may
elect to exercise its Repurchase Option pursuant to the provision of Section 3.2
below. In the event that the Company does not elect to exercise its Repurchase
Option, all of the Non-Vested Shares shall thereafter be deemed to be Vested
Shares.
3.2. Exercise of Repurchase Option and Closing. The Company may
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exercise the Repurchase Option by delivering or mailing to the Officer, in
accordance with Section 8.7, written notice of its election to exercise within
45 days after the Termination Event. If and to the extent the Repurchase Option
is not so exercised within such 45-day period, the Repurchase Option shall
automatically expire and terminate effective upon the expiration of such 45-day
period. The closing of any such repurchase of Non-Vested Shares shall be held at
the principal office of the Company, or at such other location as the parties to
such repurchase may mutually determine. At any such closing, the Company shall
pay to the Officer and/or any holder of the Non-Vested Shares the aggregate
repurchase price for the Non-Vested Shares to be purchased by certified or bank
check. At such time, the Officer and/or any holder of the Non-Vested Shares
shall deliver to the Company the certificate or certificates representing the
Non-Vested Shares so repurchased, duly endorsed for transfer, free and clear of
any liens or encumbrances.
Section 4. Restrictions on Transfer of Shares. None of the Shares now
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owned or hereafter acquired shall be sold, assigned, transferred, pledged,
hypothecated, given away or in any other manner disposed of or encumbered,
whether voluntarily or by operation of law, unless such transfer is in
compliance with all foreign, federal and state securities laws (including,
without limitation, the Act), and such disposition is in accordance with the
terms and conditions of this
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Section 4. In connection with any transfer of Shares, the Company may require an
opinion of counsel to the transferor, reasonably satisfactory to the Company,
that such transfer is in compliance with all foreign, federal and state
securities laws (including without limitation, the Act). Any attempted
disposition of Shares not in accordance with the terms and conditions of this
Section 4 shall be null and void, and the Company shall not reflect on its
records any change in record ownership of any Shares as a result of any such
disposition, shall otherwise refuse to recognize any such disposition and shall
not in any way give effect to any such disposition of any Shares. The Officer is
also a party to a certain Stockholders' Agreement dated as of the date hereof by
and among the Company and its stockholders (the "Stockholders' Agreement").
Subject to the foregoing general provisions and except as otherwise amended by
this Section 4, Non-Vested Shares may be transferred to Permitted Transferees
(as defined in the Stockholders' Agreement) and Vested Shares may be transferred
in accordance with and subject to the provisions of the Stockholders' Agreement.
Section 5. Legend. Any certificate (s) representing the Shares shall
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carry the following legends:
"The transferability of this Certificate and the shares
of stock represented hereby are subject to the restrictions,
terms and conditions (including repurchase and restrictions
against transfers) contained in a certain Stock Purchase and
Restriction Agreement dated as of March 14, 1996 between the
Company and Xxx X. Xxxxxx (copies of which are available at the
offices of the Company for examination)."
and
"The shares represented by this Stock Certificate have
not been registered under the Securities Act of 1933 or the
securities laws of any State. The shares may not be sold or
transferred in the absence of such registration or an exemption
from registration."
Section 6. Escrow. In order to more effectively carry out the
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provisions of Sections 3 and 4 of this Agreement, the Company shall hold the
Shares in escrow together with a stock power endorsed by the Officer in blank.
The Company shall not dispose of the Shares except as otherwise provided in this
Agreement or the Stockholders' Agreement. If the Company exercises the
Repurchase Option, the Company is hereby authorized by the Officer to date and
complete the stock powers necessary for the transferto the Company of the Shares
it has duly elected to purchase and to transfer the Shares being purchased to
the Company. At such time as any Shares are transferred pursuant to Section 4
(including pursuant to the right of first refusal provisions in the
Stockholders' Agreement), the Company shall, at the written request of the
Officer, deliver to the Officer (or his proposed transferee) a certificate
representing such Shares with the balance of the Shares to be held in escrow
pursuant to this Section 6. All Shares which remain in escrow upon the
termination
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of this Agreement shall then be delivered to the Officer and/or the record
holders of such Shares. The right to vote the Shares and to receive cash
dividends on the Shares shall remain in the Officer unless and until the Shares
are purchased by the Company pursuant to the Repurchase Option.
Section 7. Withholding Taxes. The Officer acknowledges and agrees that
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the Company has the right to deduct from payments of any kind otherwise due to
the Officer, or from the Shares held pursuant to Section 6 hereof, any federal,
state or local taxes of any kind required by law to be withheld with respect to
the purchase of the Shares by the Officer. In furtherance of the foregoing the
Officer agrees that if he elects, in accordance with Section 83(b) of the
Internal Revenue Code of 1986, as amended, to recognize ordinary income in the
year of acquisition of the Shares, the Officer will pay to the Company all
withholding taxes shown as due on his Section 83(b) election form, or otherwise
ultimately determined to be due with respect to such election, based on the
difference, if any, between the purchase price for such Shares and the fair
market value of such Shares as of the date of the purchase of such Shares by the
Officer.
Section 8. Miscellaneous Provisions.
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8.1 Termination. The restrictions on transfers of Vested Shares
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contemplated by Section 4 hereof shall terminate as provided in the
Stockholders' Agreement; provided, however, that all other provisions of this
Agreement (including restrictions on transfers of Non-Vested Shares) shall
remain in effect until all of the Shares shall have become Vested Shares.
8.2. Equitable Relief. The parties hereto agree and declare that legal
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remedies may be inadequate to enforce the provisions of this Agreement and that
equitable relief, including specific performance and injunctive relief, may be
used to enforce the provisions of this Agreement.
8.3. Change and Modifications. This Agreement may not be orally
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changed, modified or terminated, nor shall any oral waiver of any of its terms
be effective. This Agreement may be changed, modified or terminated only by an
agreement in writing signed by the Company and the Officer.
8.4. Governing Law; Entire Agreement. This Agreement shall be
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governed by and construed in accordance with the laws of the State of Delaware.
This Agreement, together with the Stockholders' Agreement and other agreements
specifically contemplated hereby and thereby, is intended by the parties as a
final expression of their agreement and intended to be complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein. This Agreement and the
Stockholders' Agreement and other agreements contemplated hereby and thereby
(including the exhibits hereto and thereto) supersede all prior agreements and
understandings between the parties with respect to such subject matter.
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8.5. Headings. The headings are intended only for convenience in
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finding the subject matter and do not constitute part of the text of this
Agreement and shall not be considered in the interpretation of this Agreement.
8.6. Saving Clause. If any provision(s) of this Agreement shall be
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determined to be illegal or unenforceable, such determination shall in no manner
affect the legality or enforceability of any other provision hereof.
8.7. Notices. All notices, requests, consents and other communications
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shall be in writing and be deemed given when delivered personally, by telex or
facsimile transmission or when received if mailed by first class registered or
certified mail, postage prepaid. Notices to the Company or the Officer shall be
addressed as set forth underneath their signatures below, or to such other
address or addresses as may have been furnished by such party in writing to the
other. Notices to any holder of the Shares other than the Officer shall be
addressed to the address furnished by such holder to the Company.
8.8. Benefit and Binding Effect. This Agreement shall be binding upon
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and shall inure to the benefit of the parties hereto, their respective
successors, assigns, and legal representatives. The Company has the right to
assign this Agreement, and such assignee shall become entitled to all the rights
of the Company hereunder to the extent of such assignment. Notwithstanding
anything herein to the contrary, an assignment by the Company shall not relieve
the Company of the obligation to pay any part of the aggregate repurchase price
for Non-Vested Shares which is not paid by the Company's assignee.
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IN WITNESS WHEREOF, the Company and the Officer have executed this
Stock Purchase and Restriction Agreement as of the date first above written.
R&D SYSTEMS, INC.
0000 X. Xxxxxxx Xxxx.
Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
By: /s/ XX XXXXXXXXXX
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Title:
OFFICER
/s/ XXX X. XXXXXX
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Xxx X. Xxxxxx
00000 X. Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Facsimile:
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EXHIBIT A
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Schedule A
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Year Revenues Operating Profit Margin
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1995 (A) $ 35,124,139 $ 4,689,079
1996 43,905,173 8,781,035 (1)
1997 54,881,467 10,976,293
1998 68,601,834 13,720,367
1999 85,752,292 17,150,459
2000 107,190,365 21,438,073
Schedule B
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Year Revenues Operating Profit Margin
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1995 (A) $ 35,124,139 $ 4,689,079
1996 45,661,381 6,849,207 (1)
1997 59,359,795 8,903,969
1998 77,167,733 11,575,160
1999 100,318,053 15,047,708
2000 130,413,469 19,562,020
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(A) Audited
(1) Before extraordinary MSUIP expense of $3,803,621
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