10B5-1 STOCK SALES PLAN
THIS 10b5-1 STOCK SALES PLAN, dated as of June 10, 2005 (this "Stock Sales
Plan"), is entered into between Xxxxx X. Xxxxxx, III ("Seller") and Xxxxxxx
Xxxxxx & Company ("Broker").
WHEREAS, Seller desires to establish this Stock Sales Plan to sell shares
of common stock, par value $0.01 per share ("Stock"), of Aldila, Inc. ("Issuer")
in accordance with the requirements of Rule 10b5-1 ("Rule 10b5-1") under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), in order to
permit the orderly disposition of a portion of Seller's holdings of Stock, as
further set forth herein.
NOW, THEREFORE, Xxxxxx and Xxxxxx hereby agree as follows:
1. The Plan. Broker shall effect one or more sales (each, a "Sale") of shares
of Stock (the "Shares") in the amounts set forth in the attached Annex A
to this Stock Sales Plan and in accordance to the terms set forth therein.
The Sales of Shares by the Broker shall be effected on behalf of Seller
and other entities for which Seller has reporting obligations under
Section 13 and Section 16 of the Exchange Act. Seller acknowledges and
agrees that neither Seller nor any such entities shall have, nor shall
attempt to exercise, any influence over how, when or whether to effect
sales of Stock pursuant to this Stock Sales Plan. Proceeds from each sale
of Stock effected under this Stock Sales Plan will be delivered to
Seller's account as promptly as practicable.
2. Effectiveness. This Stock Sales Plan shall become effective as of June 14,
2005 and shall terminate on the earlier of (i) December 14, 2005; (ii) the
date on which Broker is required to terminate sales under this Stock Sales
Plan pursuant to paragraph 6 below; (iii) on the date which Issuer or any
other person publicly announces a tender or exchange offer with respect to
the Stock or a merger, acquisition, reorganization, recapitalization or
comparable transaction affecting the securities of Issuer as a result of
which the Stock is to be exchanged or converted into shares of another
company; (iv) the commencement of any proceedings in respect of or
triggered by Seller's bankruptcy or insolvency; and (v) the death of
Seller. The period during which this Stock Sales Plan is in effect is
referred to herein as the "Plan Sales Period".
3. Representations, Warranties and Agreements.
(a) Seller represents and warrants that Seller is not aware of material,
nonpublic information with respect to Issuer or any securities of
Issuer (including the Stock) and is entering into this Stock Sales
Plan in good faith and not as part of a plan or scheme to evade the
prohibitions of Rule 10b5-1.
(b) It is the intent of Seller and Broker that this Stock Sales Plan
comply with the requirements of Rule 10b5-1(c)(1)(i)(B) under the
Exchange Act, and this Stock Sales Plan shall be interpreted to
comply with the requirements of Rule 10b5-1(c).
(c) Seller represents that the Shares are "restricted securities" and/or
that Seller may be deemed an "affiliate" of Issuer as those terms
are defined under Rule 144 ("Rule 144") of the Securities Act of
1933, as amended. Seller shall not take, and shall not cause any
person or entity with which he or she would be required to aggregate
sales of Stock pursuant to paragraph (a)(2) or (e) of Rule 144 to
take, any action that would cause the Sales not to comply with Rule
144. Seller has provided Broker with multiple executed Forms 144,
which Broker will complete and file on behalf of Seller. Seller
agrees to complete, execute and deliver to Broker additional Forms
144 for the sales to be effected under this Stock Sales Plan at such
time and in such numbers as Broker shall request, and Broker agrees
to file such Forms 144 on behalf of Seller as required by applicable
law. Seller understands and agrees that Xxxxxx will make one Form
144 filing at the beginning of each three-month period commencing
prior to the first Sale to be effected pursuant to this Plan. The
Forms 144 filed after the date of this agreement shall specify that
the Sales are being effected in accordance with a Stock Sales Plan
intended to comply with Rule 10b5-1. Broker agrees to conduct all
sales pursuant to this Stock Sales Plan in accordance with the
manner of sale requirement of Rule 144 and in no event shall Broker
effect any sale if such sale would exceed the then-applicable amount
limitation under Rule 144, assuming Broker's sales pursuant to this
Stock Sales Plan are the only sales subject to that limitation.
(d) Seller represents and warrants that Seller is currently permitted to
sell Stock in accordance with Issuer's xxxxxxx xxxxxxx policies and
has obtained the approval of Issuer to enter into this Stock Sales
Plan and that, other than any Rule 144 requirements set forth
herein, there are no contractual, regulatory or other restrictions
applicable to the Sales contemplated under this Stock Sales Plan
that would interfere with Broker's ability to execute Sales and
effect delivery and settlement of such Sales on behalf of Seller,
other than restrictions with respect to which Seller has obtained
all required consents, approvals and waivers. Seller shall notify
Broker promptly in the event that any of the above statements become
inaccurate prior to the termination of this Stock Sales Plan.
(e) Seller shall timely make all filings, if any, required under
Sections 13 and 16 of the Exchange Act. Seller agrees that Seller
shall at all times during the Plan Sales Period, in connection with
the performance of this Stock Sales Plan, comply with all applicable
laws, including, without limitation,
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Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(f) Seller understands that Broker may not be able to effect a Sale due
to a market disruption or a legal, regulatory or contractual
restriction applicable to Broker or any other event or circumstance
(a "Blackout"). Seller also understands that even in the absence of
a Blackout, Broker may be unable to effect Sales consistent with
ordinary principles of best execution due to insufficient volume of
trading, failure of the Stock to reach and sustain a limit order
price, or other market factors in effect on the date of a Sale set
forth in Annex A ("Unfilled Sales"). If, consistent with ordinary
principles of best execution or for any other reason, Broker cannot
sell in full any Sale amount in accordance with the terms set forth
on Annex A, other than pursuant to an Issuer Restriction (as defined
below) then the amount of any such Unfilled Sales may be sold as
soon as practicable on the immediately succeeding trading day and on
each subsequent trading day as is necessary to sell such Unfilled
Sales consistent with ordinary principles of best execution.
Nevertheless, if any such shortfall exists after the close of
trading on the last trading day of the Plan Sales Period, Xxxxxx's
authority to sell such shares for the account of Seller under this
Stock Sales Plan shall terminate.
Xxxxxx agrees that if Issuer enters into a transaction that results,
in Issuer's good faith determination, in the imposition of trading
restrictions on Seller, such as a stock offering requiring an
affiliate lock-up ("Issuer Restriction"), and if Issuer or Seller
shall provide Broker at least one days' prior notice signed by
Issuer or Seller and confirmed by telephone of such trading
restrictions, then Broker will cease effecting Sales under this
Stock Sales Plan until notified by Issuer and Seller that such
restrictions have terminated. Broker shall resume effecting Sales in
accordance with this Stock Sales Plan as soon as practicable after
the cessation or termination of an Issuer Restriction. Any Unfilled
Sales not sold in accordance with the second to last sentence of the
immediately preceding paragraph, and any Sales that would have been
executed in accordance with the terms of Annex A but are not
executed due to the existence of an Issuer Restriction, shall be
deemed to be cancelled and shall not be effected pursuant to this
Stock Sales Plan.
4. Governing Law. This Stock Sales Plan shall be governed by and construed in
accordance with the laws of the State of New York.
5. Amendment/Modification. This Stock Sales Plan may be modified or amended
only by a writing signed by the Seller and Xxxxxx, provided that any such
modification or amendment shall only be permitted at a time when Seller is
otherwise permitted to effect sales under Issuer's trading policies and at
a time
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when Seller is not aware of material, nonpublic information concerning
Issuer or its securities.
6. Termination. This Stock Sales Plan may be terminated by Seller at any time
upon one day's prior notice to Broker, provided, however, that Seller
shall not terminate this Stock Sales Plan except upon consultation with
Seller's own legal advisors.
7. Notices. All notices to Broker under this Stock Sales Plan shall be given
to Broker and Xxxxxx's clearing agent by phone, e-mail or first class mail
(postage prepaid), courier or hand delivery as follows:
Xxxxxxx Xxxxxx & Company
Attention: Xxxxxx Xxxxxx
0000 Xxxxx Xx.
Cincinnati, Ohio 45243
Tel: (000) 000-0000
E-mail: xxxxxxx@xxxx.xxx
8. Counterparts. This Stock Sales Plan may be signed in any number of
counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
9. Severability. If any provision of this Stock Sales Plan is or becomes
inconsistent with any applicable present or future law, rule or
regulation, that provision will be deemed modified or, if necessary,
rescinded in order to comply with the relevant law, rule or regulation.
All other provisions of this Stock Sales Plan will continue and remain in
full force and effect.
[Signature page follows]
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IN WITNESS WHEREOF, the undersigned have signed this Stock Sales Plan as
of the date first written above.
XXXXXXX XXXXXX & COMPANY
/s/ Xxxxx X. Xxxxxx, III By: /s/ Xxxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, III Name: Xxxxxx X. Xxxxxx
Title: President
SIGNATURE PAGE
Annex A
Stock Sales Plan Instructions
SALE OF STOCK
On or after June 14, 2005, sell 40,000 of Seller's Shares of Stock (the "Initial
Sales") beneficially owned by Seller when the market price per Share meets or
exceeds $22.00.
Subsequent to the Initial Sales, sell 50,000 (the "Second Sales") of Seller's
Shares of Stock beneficially owned by Seller when the market price per Share
meets or exceeds $22.00 and is less than $23.00.
Subsequent to the Second Sales, sell 60,000 (the "Third Sales") of Seller's
Shares of Stock beneficially owned by Seller when the market price per Share
meets or exceeds $23.00 and is less than $24.00.
Subsequent to the Third Sales, sell the remaining amount of Shares of Stock
which are allowed to be sold pursuant to the most recent Form 144 filed in
connection with this Stock Sales Plan through Seller when the market price per
Share meets or exceeds $24.00.
Notes:
(i) If an indicated date is not a trading day for whatever reason, then the
date shall be deemed to be the next succeeding trading day.
(ii) All Share and per Share amounts shall be appropriately adjusted to reflect
stock splits or combinations should they occur.
(iii) The Broker shall not make any Sales of Stock if such sale does not comply
with the volume limitations set forth within Rule 144.
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