Exhibit 10 (h)
Outside Director Stock Purchase Agreement
XXXXXXXX GOVERNOR COMPANY
OUTSIDE DIRECTOR STOCK PURCHASE AGREEMENT
Dated as of
May 16, 2001
XXXXXXXX GOVERNOR COMPANY
Attention: Xx. Xxxx Xxxxxxxx, President
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Dear Xx. Xxxxxxxx:
The undersigned, Xxxx Xxxxxxx, understands that you, Xxxxxxxx Governor Company,
a Delaware corporation (the "Company") is authorized to issue 60,000,000 shares,
designated Common Stock of the par value of $0.00875 per share (the "Company
Stock"), of which as of May 16, 2001, (i) 11,319,356 shares were issued and
outstanding, and (ii) 840,644 shares were issued but are not outstanding and are
owned and held by the Company as treasury shares.
In accordance with the Company's Director Stock Ownership Guideline, the Company
is authorized to sell treasury shares of the Company Stock to each of its
directors who are not officers, members or employees of the Company (the
"Outside Directors"). The aggregate purchase price to me for the shares of
Company Stock I purchase will be One Hundred Ten Thousand, Nine Hundred
Eighty-two and 78/100 Dollars ($110,982.78) (the "Purchase Price"). The price
per shall be equal to the Fair Market Value of such stock as quoted on the
Nasdaq National Market at the close of business on the date of this agreement.
The shares of the company Stock to be purchased by me hereunder shall be the
number of whole shares of Company Stock which may be acquired for the Purchase
Price based upon the Fair Market Value per share as of the Purchase Date (the
"Shares").
I confirm my agreement with the Company as follows in connection with my
purchase of the Shares. Accordingly, the Company confirms its agreement with me.
(1) PURCHASE OF SHARES. Subject to the terms and conditions herein set
forth, I agree to purchase from the Company, and the Company agrees to sell
to me, the number of Shares which may be purchased for the Purchase Price
at a price per share equal to the Fair Market Value per share as of the
Purchase Date.
(2) PAYMENT OF PURCHASE PRICE. In payment of the Purchase Price, I agree to
deliver to the Company within 10 days following the Purchase Date a
Non-Interest Bearing Installment Note from me in the amount of the Purchase
Price dated the Purchase Date and payable to your order, expressed to
mature as follows: Immediate application of prior
fees held by my request in the amount of $11,700.00, plus $2,000.00 on the
20th day of May, 2001, and $2,000.00 on the same day of each and every
succeeding month thereafter to and including a final installment on the
20th day of June, 2005, such note to be in the form of the Non-Interest
Installment Note from me which is attached hereto as Exhibit A and hereby
made a part hereof (the "Installment Note"). The remaining balance on the
Installment Note will be accelerated in the event I cease to be an Outside
Director of the Company for any reason and shall be payable 90 days
thereafter.
(3) PURCHASE DATE. The purchase and sale provided for herein shall be
consummated and closed at the office of the Company, 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, commencing at 11:00 a.m., Rockford local
time, on May 17, 2001.
(4) ASSIGNMENT OF RETAINER FEES. I agree that commencing as of the Purchase
Date, and on each of the next 60 payment dates thereafter, the Company may
withhold and retain the monthly retainer fees due me from the company for
my service as a member of the Board of Directors of the Company (the
"Retainer Fees") in satisfaction of the payment of the Purchase Price for
the Shares under the Installment Note. I hereby sell, assign, convey and
transfer to the Company all my right, title and interest to any and all
payments due me as Retainer Fees, including any and all increases thereof.
The assignment of Retainer Fees shall be effective as of the Purchase Date
until the Installment Note is paid and satisfied in full.
(5) PREPAYMENT. The unpaid monthly installments of the Purchase Price for
Shares to be purchased by me hereunder may be prepaid by me in whole or in
part at any time. In case of any prepayment of the Purchase Price in part,
such prepayment shall be applied to the installments hereof in the inverse
order of their respective maturities. Any monthly Retainer Fees in excess
of $2,000.00 shall be applied by the Company as a prepayment hereunder.
(6) ISSUANCE OF STOCK CERTIFICATE. On the Purchase Date, the Company shall
issue to me a stock certificate evidencing the number of Shares purchased
by me hereunder.
(7) TRANSFERABILITY AND CONTINUING OBLIGATION. The rights granted me
hereunder may not be sold, pledged, assigned, transferred or otherwise
disposed of in any manner whatsoever. Only I shall have the right to
purchase Shares hereunder. Furthermore, except as mutually agreed otherwise
by the parties hereto, I understand and agree that my obligation under the
Installment Note and this Agreement are with recourse and binding on me
individually until satisfied in full, including without limitation, in the
event (i) of my death, or (ii) that I am no longer an Outside Director for
any reason.
(8) FINANCIAL RISKS. I acknowledge that I have received all information
which I deem necessary and appropriate to evaluate the financial risks
inherent in my purchase of Shares hereunder, and I acknowledge that I have
satisfactory and complete information concerning the business, operations,
and finances of the Company in response to all my inquiries in respect
thereof.
(9) INVESTMENT REPRESENTATION. I represent and warrant that the Shares
acquired by me pursuant to this agreement (i) will be acquired by me for my
own account, (ii) will be
acquired by me for investment and not with a view to, or for sale in
connection with, any distribution thereof, (iii) will be acquired by me
with no present intention of selling or distributing such shares. I agree
that I will not dispose of the Shares purchased by me hereunder in such a
manner as will violate the Securities Act of 1933, as amended, or any
applicable rules and regulations thereunder and until and unless the
Company shall have been furnished with an opinion of counsel satisfactory
to it to the effect that any proposed disposition of such shares may be
effected without such violation. I agree that all certificates evidencing
the Shares acquired by me hereunder will be marked with a legend as
follows:
"The shares evidenced by this Certificate have not been
registered under the Securities Act of 1933, as amended. The shares
evidenced hereby may not be sold, transferred, pledged or hypothecated
in the absence of an effective registration statement for the shares
under the Securities Act of 1933, as amended, or an opinion of counsel
satisfactory to the Corporation prior to the proposed transaction that
registration is not required under said Act."
I represent that I have been informed by the Company and understand that
the Shares acquired by me hereunder will not be registered under the
Securities Act of 1933, as amended, and that the Company does not
contemplate and is not legally required to file any such registration.
Accordingly, in connection with any future resale of the Shares acquired by
me hereunder I acknowledge that my attention has been directed to Rule 144
under the Securities Act of 1933, as amended, and that I have been advised
that the Shares acquired by me hereunder must be held indefinitely unless
they are subsequently registered under the Securities Act of 1933, as
amended, or an exemption from such registration is available.
(10) NOTICES. All notices, requests, demands and other communication
hereunder shall be in writing and shall be deemed to have been duly given
when delivered personally or when deposited in the United States mail,
registered or certified, return receipt requested, postage prepaid,
addressed as follows:
(a) if to me, to:
Mr. Xxxx Xxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
(b) if to you, to:
Xxxxxxxx Governor Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Treasurer
or to such other address or addresses as you or I may communicate in
writing to the other by notice given pursuant to the provisions of this
paragraph (10). Written notice given by
any other method shall be deemed effective only when actually received by
the party to whom given.
(11) MISCELLANEOUS. This Agreement (i) constitutes the entire agreement
between you and me with respect to the subject matter hereof, (ii) shall
not be assigned or transferred by your or me, (iii) shall be governed in
all respects by the laws of the State of Illinois, and (iv) may be executed
in two or more counterparts which together shall constitute a single
instrument.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to me the enclosed copy of this Outside Director Stock
Purchase Agreement whereupon it shall become a binding agreement between us.
Very truly yours,
By ________________________________
Xxxx Xxxxxxx
The foregoing is hereby confirmed
and agreed to as of the 16th day of
May, 2001.
XXXXXXXX GOVERNOR COMPANY
By _______________________________
Xxxx X. Xxxxxxxx, President
NON-INTEREST BEARING
SECURED INSTALLMENT NOTE
$110,982.78 May 16, 2001
For value received, Xxxx Xxxxxxx (hereinafter referred to as the "Payor"),
hereby promises to pay to the order of XXXXXXXX GOVERNOR COMPANY, a Delaware
corporation (hereinafter referred to as the "Payee"), the principal sum of One
Hundred Ten Thousand, Nine Hundred Eighty-two and 78/100 Dollars ($110,982.78)
in lawful money of the United States of America in installments as follows:
Immediate application of prior fees held by my request in the amount
of $11,700.00, plus Two Thousand Dollars ($2,000.00) on the 20th day
of May, 2001, and the same amount on the same day of each and every
succeeding month thereafter to and including a final installment on
the 20th day of June, 2005.
In the event the Payor ceases to be a member of the Board of Directors of
the Payee for any reason, then, at the option of the Payee, the entire unpaid
principal of this Note shall become due and payable ninety (90) days after the
date the Payor ceases to be a director.
If the Payor shall default in the making of any payment of principal due
hereunder and such default shall continue for more than ten (10) days after
notice thereof to the Payor from the Payee, then, at the option of the Payee,
all unpaid principal of this Note shall become immediately due and payable.
Notwithstanding anything to the contrary contained in this Note, in the
event of an uncorrected payment default after a ten (10) day notice thereof to
the Payor from the Payee, the Payor promises to pay interest to the Payee on all
unpaid principal for the period after the date of such default until payment in
full thereof, at the rate of seven percent (7.0%) per annum.
Except as specifically provided herein, this Note shall be non-interest
bearing for the period hereof.
All payments of principal of this Note shall be made to the Payee at 0000
Xxxxx Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, or at such other place or places
as the holder hereof may direct from time to time.
This Note is issued under and pursuant to that certain Outside Director
Stock Purchase Agreement, dated as of May 16, 2001, between the Payor and the
Payee (the "Purchase
EXHIBIT A
Agreement"). In accordance therewith, it is contemplated that this Note may be
satisfied by the assignment from the Payor to the Payee of retainer fees due the
Payor for service as a member of the Xxxxxxxx Governor Company Board of
Directors pursuant to Section 4 of the Purchase Agreement; PROVIDED, HOWEVER,
all obligations hereunder are with full recourse to the Payor hereof.
The Payor hereby promises to pay on demand all costs of collection,
including, without limitation, court costs and attorneys' fees paid or incurred
by the Payee in enforcing this Note.
The Payor may prepay, without notice, all or any part of the unpaid
principal of this Note at any time, and from time to time, without payment of
any penalty or premium on account of such prepayment. Any monthly Retainer Fees
in excess of $2,000.00 assigned pursuant to the Purchase Agreement shall be
applied by the Payee as a prepayment hereunder. In case of any prepayment of
this Note in part, such prepayment shall be applied to the installments hereof
in inverse order of their respective maturities.
The parties hereto, including the maker and all endorsers and guarantors of
this Note, hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance or
enforcement of this Note.
All notices and other communications to be given or made pursuant to this
Note shall be in writing and shall be deemed to have been duly given if
personally delivered or mailed by registered or certified mail, postage prepaid,
return receipt requested, and addressed to the Payor at the address set forth in
the Purchase Agreement.
This Note shall be governed by and construed in accordance with the laws of
the State of Illinois.
IN WITNESS WHEREOF, the undersigned has caused this instrument to be duly
executed as of the day and year first above written.
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Xxxx Xxxxxxx
ELECTION TO INCLUDE VALUE OF RESTRICTED PROPERTY IN
GROSS INCOME IN YEAR OF TRANSFER UNDER CODE SECTION 83 (b)
The undersigned hereby elects pursuant to Section 83(b) of the Internal
Revenue Code with respect to the property described below and supplies the
following information in accordance with the regulations promulgated
thereunder:
1. The name, address and taxpayer identification number of the undersigned
are:
Xxxx Xxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
SS# ###-##-####
2. Description of property with respect to which the election is being made:
1,502 shares of Common Stock,
par value $0.00875 per share, of Xxxxxxxx Governor Company.
3. The date on which property was transferred is May 18, 2001.
The taxable year to which this election relates is calendar year 2001.
4. The nature of the restriction(s) to which the property is subject to:
The property is nontransferable in the taxpayer's hands, by virtue of
language to that effect stamped on the stock certificate.
Section 16(b) of The Securities and Exchange Act of 1934 and SEC Rule
144.
5. Fair market value:
The fair market value at the time of transfer (determined without
regard to any restrictions) of the property with respect to which this
election is being made is $73.89 per share.
6. Amount paid for property:
The amount paid by taxpayer for said property is $73.89 per share.
7. Furnishing statement to employer:
A copy of this statement has been furnished to Xxxxxxxx Governor
Company.
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Date Name: Xxxx Xxxxxxx
