Form of Rule 10b5-1 Stock Purchase Plan
Exhibit 10.8
Form of
Rule 10b5-1 Stock Purchase Plan
Rule 10b5-1 Stock Purchase Plan
This
Rule 10b5-1 Stock Purchase Plan (this “Purchase Plan”), is entered into on ___, 2008
by and between [· ] ( “Broker”), HCM Acquisition Company, a Delaware corporation (the
“Company”), HCM Acquisition Holdings, LLC, a Delaware limited liability company (“Founding
Stockholder”) and Highland Capital Management, L.P., a Delaware limited partnership and the sole
member of the Founding Stockholder (“HCMLP”).
WHEREAS, Founding Stockholder desires to establish a plan that qualifies for the affirmative
defense and safe harbor provided by Rule 10b5-1 (“Rule 10b5-1”) under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) to purchase shares of common stock, par value $0.001 per
share (the “Shares”), of the Company, as described in the Company’s Registration Statement on Form
S-1 relating to the initial public offering of the Company.
WHEREAS, Founding Stockholder desires to engage Broker as its exclusive agent to purchase
Shares on its behalf in accordance with this Purchase Plan;
WHEREAS, Founding Stockholder has established or, prior to effecting transactions under this
Purchase Plan will establish, an account (the “Account”) with Broker by executing an account
agreement and all other necessary ancillary documents with Broker; and
WHEREAS, HCMLP will agree to pay for any Shares purchased hereunder to the extent the Founding
Stockholder fails to do so;
NOW, THEREFORE, Broker, the Company, Founding Stockholder and HCMLP hereby agree as follows:
1. Engagement of Broker
During the term of this Purchase Plan, Broker shall act as Founding Stockholder’s and HCMLP’s
exclusive agent to purchase Shares pursuant to this Purchase Plan. Subject to the terms and
conditions set forth herein, Broker hereby accepts such appointment and engagement.
2. Trading Instructions
(a) Broker is authorized to begin purchasing Shares as agent for Founding Stockholder or HCMLP
as set forth herein pursuant to this Purchase Plan on the later of (i) the day after the Company
files an initial preliminary proxy statement (the “Preliminary Proxy Statement”) with the
Securities and Exchange Commission relating to a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination (the “Business Combination”), with
one or more operating businesses (the “Target”) and (ii) 60 calendar days after termination of the
“restricted period” in connection with the Company’s initial public offering under Regulation M
(the “Commencement Date”). Broker shall cease
purchasing Shares on the Termination Date (as defined below). The period beginning on the
Commencement Date and ending on the Termination Date is referred to herein as the “Plan Period”.
For the avoidance of doubt, Broker shall not begin purchasing Shares as agent pursuant to this
Purchase Plan, until it receives written notification from the Company and Founding Stockholder of
the Commencement Date in accordance with Section 5(a) herein. Such notice shall be given to Broker
in writing by facsimile at [· ], Attention: [· ], and confirmed by telephone at
[· ].
(b) In accordance with Broker’s customary procedures, Broker will deposit Shares purchased
hereunder into the Account against payment to Broker of the purchase price therefor and commissions
and other fees in respect thereof.
(c) Broker will notify Founding Stockholder of all transactions executed under this Purchase
Plan pursuant to customary trade confirmations, which shall be provided within 24 hours of each
transaction to Highland Capital Management, L.P., 00000 Xxxx Xxxx, Xxxxx 000, Xxxxxx, XX 00000,
Att: General Counsel, by facsimile at 000-000-0000 confirmed by telephone at 000-000-0000, with a
copy to X. Xxxxxxxxx at xxxxxxxxxx@xxxxx.xxx
(d) (i) On each day on which the American Stock Exchange (the “Exchange”) is open for trading
(each, a “Business Day”), Broker shall use commercially reasonable efforts to purchase, as agent
and for the account of Founding Stockholder in compliance with Rule 10b-18(b), the lesser of (x)
the maximum number of Shares Founding Stockholder or HCMLP, as the case may be, is permitted to
purchase under Rule 10b-18 on such Business Day and (y) the number of Shares to be purchased
pursuant to the Share Repurchase Guidelines set forth on Appendix A hereto, provided, however, that
to the extent such purchases would not constitute “Rule 10b-18 purchases” as defined under Rule
10b-18 solely as a result of Rule 10b-18(a)(13)(iv), Broker may upon the advice of counsel to
Broker, disregard any restriction contained in Rule 10b-18(a)(13)(iv)(B) in determining the number
of shares that may be purchased pursuant to clause (x)above.
(ii) Founding Stockholder or HCMLP, as the case may be, shall pay to Broker a commission of
$[· ] per Share so purchased.
(e) Broker will make, keep and produce promptly upon request a daily time-sequenced schedule
of all Share purchases made under this Purchase Plan, on a transaction-by-transaction basis,
including (i) size, time of execution and price of purchase; and (ii) the exchange, quotation
system, or other facility through which the Share purchase occurred, which obligations are set
forth under the heading “Daily Time-Sequenced Schedule Obligations” on Appendix A hereto.
(f) Founding Stockholder and HCMLP agree that this Purchase Plan constitutes an irrevocable
limit order to purchase Shares pursuant to the terms of this Purchase Plan, including the Share
Repurchase Guidelines set forth on Appendix A hereto.
3. Broker’s Discretion to Deviate from Trading Instructions
(a) Subject to the Share Repurchase Guidelines and other terms and conditions set forth in
this Purchase Plan, Broker shall have full discretion with respect to the execution of all
purchases, and Founding Stockholder and HCMLP acknowledge and agree that neither Founding
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Stockholder nor HCMLP has, and shall not attempt to exercise, any influence over how, when or
whether to effect such purchases of Shares pursuant to this Purchase Plan.
(b) Notwithstanding any provision herein to the contrary, including the provisions of Section
2(d)(i), in the event that, on any Business Day, in the opinion of Broker’s counsel, effecting
purchases hereunder would result in a violation of applicable law or a breach of any contract to
which Broker or its affiliates are a party or by which it or its affiliates are bound or such
purchases would result in a violation of applicable law by Founding Stockholder or HCMLP, as the
case may be (collectively, “Restrictions”), Broker may refrain from purchasing Shares or purchase
fewer than the otherwise applicable number of Shares to be purchased set forth in the Share
Repurchase Guidelines, as determined by Broker, in its discretion with regard to such Restrictions.
4. Termination Date
This Purchase Plan shall terminate upon the Termination Date. “Termination Date” means the
earliest of:
(a) the Business Day immediately preceding the record date for the meeting of stockholders at
which the Business Combination is to be voted upon by the Company’s stockholders;
(b) the Business Day on which the aggregate purchase price for all Shares purchased under this
Purchase Plan equals $25,000,000; provided that, for avoidance of doubt, in no event shall
the aggregate purchase price for all Shares purchased under this Purchase Plan exceed $25,000,000;
(c) the date that Broker receives notice that Founding Stockholder has filed a petition for
bankruptcy or reorganization, or a petition for bankruptcy has been filed against Founding
Stockholder and has not been dismissed within sixty (60) calendar days of its filing;
(d) the date that Founding Stockholder or any other person publicly announces a tender or
exchange offer with respect to the Shares or a merger, acquisition, reorganization,
recapitalization or other similar business combination or transaction as a result of the
consummation of which the Shares would be exchanged or converted into cash, securities or other
property other than, in each case, in connection with the Business Combination;
(e) the date following the date on which the Company publicly announces that it does not
intend to proceed with the Business Combination that was the subject of the Preliminary Proxy
Statement; and
(f) such time as Broker determines, in its sole discretion, that it is prohibited for any
reason from engaging in purchasing activity as Founding Stockholder’s or HCMLP’s agent under this
Purchase Plan.
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If Broker determines that any event specified in Paragraphs (b), (c), (d), (e), or (f) of this
Section 4 has occurred, Broker shall promptly notify Founding Stockholder that this Purchase Plan
has terminated pursuant to the terms of this Section 4 and the date of such termination.
5. Representations, Warranties and Covenants
(a) From the date hereof until the Termination Date, each of the Company, Founding Stockholder
and HCMLP agrees not to discuss with Broker the Company’s and/or Target’s business, operations or prospects or any
other information likely to be related to the value of the Shares or likely to influence a decision
to sell Shares. Notwithstanding the preceding sentence, with the approval of counsel to Broker,
Founding Stockholder, HCMLP and the Company may communicate with Broker personnel who are not
responsible for, and have no ability to influence, the execution of this Purchase Plan.
Notwithstanding the first sentence in this paragraph, the Company, Founding Stockholder and HCMLP
shall jointly provide Broker with written notification of (i) the Commencement Date, whether the
shareholders of the Target have voted on the Business Combination prior to the Commencement Date,
and the Per Share Amount (as defined in Appendix A) as soon as practicable after the Preliminary
Proxy Statement is filed by the Company with the Securities and Exchange Commission and (ii) the
mailing of a proxy or other solicitation materials to shareholders of the Target with respect to a
vote on the Business Combination or any fact that would make purchases under this Purchase Plan
unlawful pursuant to Regulation M or otherwise, as soon as such fact is known to the Company,
Founding Stockholder or HCMLP.
(b) Each of Founding Stockholder and HCMLP represents and warrants to Broker that it has duly
authorized this Purchase Plan and the transactions contemplated hereby.
(c) Each of Founding Stockholder and HCMLP agrees that it will not, and the Company agrees
with Broker that neither it nor any “affiliated purchaser” as defined in Rule 10b-18 will, make any
purchases of blocks as described in the proviso in Rule 10b-18(b)(4) during the four full calendar
weeks immediately preceding the Commencement Date.
(d) Each of Founding Stockholder and HCMLP represents and warrants to Broker that it is not
aware of any material, nonpublic information concerning the Company or its securities (“Material,
Nonpublic Information”) and is entering into this Purchase Plan in good faith and not as part of a
plan or scheme to evade the prohibitions of Rule 10b5-1.
(e) Broker represents and warrants to the Company, Founding Stockholder and HCMLP that it has
implemented reasonable policies and procedures, taking into consideration the nature of Broker’s
business, to ensure that individuals making investment decisions will not violate the laws
prohibiting trading on the basis of Material, Nonpublic Information. These policies and procedures
include those that restrict any purchase or sale, or the causing of any purchase or sale, of any
security as to which Broker has Material, Nonpublic Information, as well
as those that prevent such individuals from becoming aware of or being in possession of
Material, Nonpublic Information.
(f) From the date hereof until the Termination Date, each of Founding Stockholder and HCMLP
agrees not to enter into any hedging transaction with respect to any Shares.
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(g) Each of the Company, Founding Stockholder and HCMLP agrees that, during the period from
the Commencement Date to the date falling that number of days following the Termination Date equal
to the “restricted period” applicable to the Company, it will not engage in any “distribution” with
respect to which the Shares are a “covered security” (as such terms are defined in Regulation M) or
any other activity that would prohibit repurchase of Shares by Broker.
(h) Each of the Company, Founding Stockholder and HCMLP represents and warrants that as of the
time of execution of this Purchase Plan, it has not entered into any similar plan or agreement
with respect to Shares or any security or interest convertible into or exchangeable for Shares.
Each of the Company, Founding Stockholder and HCMLP agrees that without the prior written consent
of Broker, it shall not, during the Plan Period, directly or indirectly (including, without
limitation, by means of a cash-settled or other derivative instrument) purchase, offer to purchase,
place any bid or limit order that would effect a purchase of, any Shares (or an equivalent
interest, including a unit of beneficial interest in a trust or limited partnership or a depository
share), or any security convertible into or exchangeable for Shares.
(i) Each of the Company, Founding Stockholder and HCMLP agrees to inform Broker (i) of any
purchases made during the Plan Period by an “affiliated purchaser” as defined in Rule 10b-18
promptly upon becoming aware of such purchases and (ii) if any “affiliated purchaser” intends to
make any such purchases, promptly upon being informed of such intention.
6. Compliance with the Securities Laws
(a) It is the intent of the parties that this Purchase Plan comply with the requirements of
Rule 10b5-1(c)(1)(i)(B), and the parties agree that this Purchase Plan shall be interpreted to
comply with the requirements of Rule 10b5-1(c).
(b) Broker agrees to use its commercially reasonable efforts to satisfy the conditions of Rule
10b-18(b) as contemplated in Section 2(d)(i) in effecting purchases of Shares pursuant to this
Purchase Plan.
7. Indemnification
(a) Founding Stockholder and HCMLP agree to indemnify and hold harmless Broker (and its
directors, officers, employees and affiliates) from and against all claims, liabilities, losses,
damages and expenses (including reasonable attorney’s fees and costs) arising out of or
attributable to (i) any material breach by the Company, Founding Stockholder or HCMLP of this
Purchase Plan (including the Company’s, Founding Stockholder’s and HCMLP’s representations and
warranties), and (ii) any violation by the Company, Founding Stockholder or HCMLP of
applicable laws or regulations with respect to the transactions contemplated by this Purchase
Plan. This indemnification will survive the termination of this Purchase Plan. Founding
Stockholder and HCMLP will have no indemnification obligations hereunder in the case of gross
negligence or willful misconduct of Broker or any other indemnified person or if Broker fails to
comply with Section 6(b) hereof (unless such failure arises out of or is attributable to a breach
by the Company, Founding Stockholder or HCMLP of its representations, warranties or obligations
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hereunder), as determined by a final, non-appealable judgment of a court of competent jurisdiction.
(b) Notwithstanding any other provision herein, no party hereto will be liable to the other
for (i) special, indirect, punitive, exemplary, or consequential damages, or incidental losses or
damages of any kind, including but not limited to lost profits, lost savings, loss of use of
facility or equipment, regardless of whether arising from breach of contract, warranty, tort,
strict liability or otherwise, and even if advised of the possibility of such losses or damages or
if such losses or damages could have been reasonably foreseen, or (ii) any failure to perform or
for any delay in performance that results from a cause or circumstance that is beyond its
reasonable control, including but not limited to failure of electronic or mechanical equipment,
strikes, failure of common carrier or utility systems, severe weather, market disruptions or other
causes commonly known as “acts of God”.
(c) The Company, Founding Stockholder and HCMLP acknowledge and agree that Broker has not
provided the Company, Founding Stockholder or HCMLP with any tax, accounting or legal advice with
respect to this Purchase Plan, including whether Founding Stockholder or HCMLP would be entitled to
any of the affirmative defenses under Rule 10b5-1 or entitled to the safe harbor of Rule 10b-18.
8. HCMLP
HCMLP agrees with Broker that it will purchase any Shares with respect to which the Founding
Stockholder is unable to satisfy its obligations under Section 2 hereunder. Notwithstanding any
provision herein to the contrary, HCMLP agrees that any Shares purchased by it pursuant to this
Purchase Plan will be purchased for the account of the Founding Stockholder and held in the
Account.
9. General
(a) This Purchase Plan (including any Appendices, Annexes or Exhibits) constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof, and supersedes any
previous or contemporaneous agreements, understandings, proposals or promises with respect thereto,
whether written or oral.
(b) This Purchase Plan will be governed by, and construed in accordance with, the laws of the
State of New York, without regard to such State’s conflict of laws rules.
(c) This Purchase Plan and each party’s rights and obligations hereunder may not be assigned
or delegated without the written permission of the other party and shall inure to the
benefit of each party’s successors and permitted assigns, whether by merger, consolidation or
otherwise.
(d) This Purchase Plan may be executed in two or more counterparts and by facsimile signature.
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IN WITNESS WHEREOF, the undersigned have signed this Purchase Plan as of the date first
written above.
| [Broker] |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| HCM Acquisition Company |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| HCM Acquisition Holdings, LLC By: Highland Capital Management, L.P. By: Strand Advisors, its general partner |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| Highland Capital Management, L.P. By: Strand Advisors, its general partner |
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| By: | ||||
| Name: | ||||
| Title: | ||||
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APPENDIX A
Share Repurchase Guidelines
| Purchase Price Range | Number of Shares to be Purchased | |
$___[Per Share Amount]
or below1
|
Broker is to buy $25.0 million of Shares (AMEX: HQA), excluding commissions, subject to the conditions of Rule 10b-18(b) and less the aggregate purchases of any Shares previously purchased. |
Daily Time-Sequenced Schedule Obligations
| Obligor | Obligation | |
Broker
|
Broker is to make, keep and produce promptly upon request a daily time-sequenced schedule of all Share purchases made under this Purchase Plan, on a transaction-by-transaction basis, including: | |
| • size, time of execution, price of purchase; and | ||
| • the exchange, quotation system, or other facility through which the Share purchase occurred. |
All Share amounts and limit prices listed herein shall be increased or decreased to reflect stock
splits should they occur.
splits should they occur.
| 1 | The Per Share Amount shall be the amount per share held in the Company’s trust account, as reported in the Preliminary Proxy Statement. |
Appendix A-1
