EXHIBIT 10.17
RESTRICTED STOCK ISSUANCE
AND STOCR PURCHASE AGREEMENT,
dated as of March 31, 1997 (this
"Agreement"), by and between
PMT HOLDINGS, INC., a Delaware
corporation (the "Company"), and
XXXXXX XXXXX, an individual (the
"Employee").
The Company and the Employee are party to that certain Employment
Agreement, dated as of March 31, 1997 (the "Employment Agreement"), pursuant to
which the Company has engaged the Employee to serve as President of its
ABL-Trans Division subject to the terms and conditions set forth therein.
In connection with the transactions contemplated by that certain Stock
Purchase Agreement, dated as of March 31, 1997 (the "Purchase Agreement"), by
and among the Company, Union Pacific Railroad Company, Pacific Motor Transport
Company (the "Target"), and Southern Pacific Transportation Company (the
"Seller"), the Company desires, (i) to sell to the Employee 17,500 shares of
Common Stock and the Employee desires to purchase from the Company such shares
of Common Stock and (ii) in recognition of Employee's services to the Target, to
issue a bonus to Employee of 17,500 shares of Preferred Stock.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained in this Agreement, the parties agree as follows.
SECTION 1. Definitions.
Terms used in this Agreement shall have the following meanings:
"Act" means the Securities Act of 1933, as amended.
"Common Stock" mean the common stock, $.01 par value, of the Company, and
any other securities that may be distributed by the Company or its successor
with respect thereto or in exchange thereof.
"Exchanqe Act" means the Securities Exchange Act of 1934, as amended.
"Preferred Stock" means the Series A Preferred Stock of the Company $.01
par value, and any other securities that may be distributed by the Company or
its successor with respect thereto or in exchange thereof.
"Public Offering" shall have the meaning ascribed to it in the Stockholders
Agreement.
"Restricted Period" means the period commencing on the date hereof and
ending on the earliest to occur of: (a) the completion of a Public Offering of
the Company; (b) a Sale of the Company; or (c) the date on which the covenants
of the Employee contained in Section 11 of the Employment Agreement terminate or
expire.
"Sale of the Company" shall have the meaning ascribed to it in the
Stockholders Agreement.
"Stockholders Aqreement" means the Stockholders Agreement, dated as of
March 31, 1997, among the Company, Employees and the other stockholders a party
thereto.
SECTION 2. Issuance of Preferred Stock: Sale of Common Stock.
(a) In recognition of Employee's services to the Target, the Company hereby
issues and grants to Employee a special one time bonus of 17,500 shares of
Preferred Stock (the "Bonus Shares").
(b) On the Closing Date the Company shall issue and sell to the Employee
and the Employee shall purchase from the Company, 17,500 shares of Common Stock
(the "Purchased Shares") for a per share purchase price equal to $17,500. The
Bonus Shares and the Purchased Shares are hereinafter referred to collectively
as, the "Shares".
(c) On the Closing Date, the Company shall deliver to the Employee (i)
certificates registered in the name of the Employee representing the Purchased
Shares against receipt by the Corporation of cash in an amount equal to the
aggregate purchase price therefor and (ii) certificates registered in the name
of the Employee representing the Bonus Shares.
SECTION 3. Closing.
The closing (the "Closing") hereunder with respect to the issuance of the
Bonus Shares and the issuance, sale and purchase of the Purchased Shares shall
take place simultaneously with the signing of this Agreement and occur
immediately prior to the closing of the Stock Purchase Agreement.
SECTION 4. Forfeiture of Bonus Shares.
If, during the Restricted Period, the Employee is found by a court of
competent jurisdiction to have breached the noncompetition covenant contained in
Section 11 of the Employment Agreement, then the Bonus Shares shall be
automatically forfeited, without consideration, and returned to the Company and
Employee (or his permitted transferees) shall have no rights or interest with
respect to the Bonus Shares as of such date.
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SECTION 5. Voting Rights: Dividends and Other Distributions.
Subject to Section 4, during the Restricted Period the Employee may
exercise full voting rights with respect to the Bonus Shares and the Employee
(or his permitted transferees) shall be entitled to receive all dividends and
other distributions paid on or with respect to the Bonus Shares. If any such
dividends or distributions are paid on the Bonus Shares in additional shares of
Preferred Stock, such additional shares will be subject to the same restrictions
hereunder as the Bonus Shares with respect to which they were paid.
SECTION 6. Representations and Warranties of the Employee.
The Employee represents and warrants to the Company as follows:
6.1. Authorization. Etc.
(a) The Employee has full legal right, power and authority to enter into
this Agreement, the Employment Agreement and the Stockholders Agreement
(collectively, the "Equity Documents") and to perform the Employee's obligations
under the Equity Documents. The execution, delivery and performance by the
Employee of the Equity Documents has been duly authorized by all requisite
action on the part of the Employee. Each Equity Document has been, or at the
Closing will be, duly executed and delivered by the Employee and is, or at the
Closing will be, the valid and binding obligation of the Employee, enforceable
against the Employee in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium, and similar laws affecting
creditors' rights generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(b) The execution, delivery and performance by the Employee of the Equity
Documents, the consummation of the transactions contemplated thereby, and the
compliance by the Employee with the provisions thereof, will not (i) violate,
conflict with or constitute (with notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, or
result in the creation of any encumbrance upon the Employee's properties or
assets pursuant to, the terms, conditions or provisions of any note, bond,
lease, mortgage, indenture, license, agreement or other instrument or obligation
to which the Employee is a party or by which the Employee or the Employee's
properties or assets are bound, or (ii) violate any provision of law, statute,
rule, regulation, order, judgment, award, writ, injunction or decree
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applicable to the Employee or any of the Employee's properties or assets.
(c) No permit, authorization, consent or approval of or by, or notification
of or filing with, any person (governmental or private) is required in
connection with the valid authorization, execution, delivery or performance of
this Agreement by the Employee other than those permits, authorizations,
consents, approvals, notifications and filings which have been obtained or made,
as the case may be.
6.2. Investment by the Employee.
(a) The Employee is acquiring the Shares for his own account, for
investment and not with a view to the distribution thereof, nor with any present
intention of distributing the same.
(b) The Employee understands that the Shares have not been registered or
qualified under the Act or any applicable state securities laws, by reason of
their issuance in a transaction exempt from the registration or qualification
requirements of the Act and such laws, and that any subsequent disposition
thereof must be registered or qualified under the Act and such laws or be exempt
from such registration or qualification.
(c) The Employee understands that the exemption from registration afforded
by Rule 144 (the provisions of which are known to the Employee) promulgated
under the Act depends on the satisfaction of various conditions and that, if
applicable, Rule 144 may only afford the basis for sales under certain
circumstances only in limited amounts.
(d) The Employee (i) has been furnished with or has had access to all
information the Employee has requested from the Company relating to the Company
and the Target and (ii) has had an opportunity to discuss with management of the
Company and the Target the business and financial affairs of the Company and the
Target and (iii) has generally such knowledge and experience in business and
financial matters and with respect to investments in securities of privately
held companies so as to enable the Employee to understand and evaluate the risks
of and form an investment decision with respect to his investment in the Shares.
(e) The Employee has no need for liquidity in his investment in the Shares
and is able to bear the economic risk of his investment in the Shares and the
complete loss of all of such investment.
(f) The Employee understands that an investment in the Company is
speculative, that any possible profits therefrom
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are uncertain, and that Employee must bear the economic risks of the investment
in the Company for an indefinite period of time. Employee is able to bear these
economic risks and to hold the Shares for an indefinite period.
(g) Employee understands and agrees that (i) the legends set forth in
Section 8 will be placed on the certificates evidencing the Bonus Shares and on
certificates for Bonus Shares issued to permitted transferees; (ii) the stock
records of the Company will be noted with respect to such restrictions; and
(iii) the Company will not be under any obligation to register the Bonus Shares
or to take any action to comply with any exemptions available for sale of the
Bonus Shares without registration.
(h) The Employee represents and warrants to the Company that, to his actual
knowledge, the representations and warranties of the Target and the Seller
contained in Section 3 of the Stock Purchase Agreement and the representations
and warranties of the Target and the Corporation in the Credit Agreement dated
as of the date hereof between First National Bank of Chicago and the Target and
the Corporation are true and correct in all respects as of the date hereof.
Notwithstanding the foregoing, no party may bring any cause of action for breach
of this representation and warranty unless and until such party has incurred
Losses as defined in the Stock Purchase Agreement) in excess of $250,000 in the
aggregate, and then only with respect to such Losses which exceed $250,000 in
the aggregate.
SECTION 7. Representations and Warranties of the Corporation.
The Company hereby represents and warrants to the Employee as follows:
7.1. Organization, Authorization.
(a) The Corporation is a company duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own and lease its properties, to carry on its
business as presently conducted and as proposed to be conducted and to carry out
the transactions and perform its obligations contemplated hereby. Attached
hereto as Exhibit A is a true and complete copy of the Certificate of
Incorporation of the Company as in effect on the date hereof.
(b) The Company has full legal right, power and authority to enter into,
execute and deliver the Equity Documents and to perform its obligations
thereunder. The execution, delivery and performance by the Company of the Equity
Documents have been duly authorized by all requisite corporate action by the
Company, and the Equity Documents have been, or at
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the Closing will be, duly executed and delivered by the Company and constitute,
or at the Closing will constitute, the valid and binding obligation of the
Company, enforceable in accordance with their terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium, and similar laws affecting
creditors' rights generally, and subject, as to enforceability, to general
principals of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law). The execution, delivery and performance by the
Company of the Equity Documents, the issuance, sale, exchange and delivery of
the Shares and the compliance with the provisions of the Equity Documents by the
Company, will not (a) violate any provision of law, statute, rule, regulation,
order, judgment, award, writ, injunction or decree applicable to the Company or
any of its properties or assets or (b) violate, conflict with or constitute
(with notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, or result in the creation of
any encumbrance upon any of the Company's properties or assets pursuant to, the
terms, conditions or provisions of the Company's Certificate of Incorporation or
Bylaws or any note, bond, lease, mortgage, indenture, license, agreement or
other instrument or obligation to which the Company is a party or by which it or
any of its properties is bound or affected.
(c) Except for the filing of any notice which may be required under
applicable federal or state securities law (which, if required, has been or
shall be filed on a timely basis as may be so required), no permit,
authorization, consent or approval of or by, or notification of or filing with,
any person (governmental or private) is required in connection with the
execution, delivery or performance of this Agreement by the Company other than
those permits, authorizations, consents, approvals, notifications or filings
which have been obtained or made, as the case may be.
7.2. Capitalization.
--------------
The authorized capital stock of the Company immediately after the
consummation at the Closing of the transactions contemplated hereby shall
consist of 600,000 shares of Common Stock and 600,000 shares of Preferred Stock.
As of the date hereof, after giving effect to the Closing and the issuance of
any Common Stock and/or Preferred Stock pursuant to the Stock Subscription
Agreement dated as of the date hereof between the Company and the Investors
named therein, (i) 350,000 shares of Common Stock will have been validly issued
and be outstanding, fully paid and nonassessable, (ii) 350,000 shares of
Preferred Stock will have been validly issued and be outstanding, fully paid and
nonassessable and (iii) 128,421 shares of Common Stock and 128,421 shares of
Preferred Stock will be duly reserved for issuance upon the exercise of a
warrant issued to Southern Pacific Transportation Company and options issued to
employees,
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directors and consultants of the Company pursuant to the 1997 Stock Option Plan
of the Company.
7.3. Authorization of the Shares, Etc.
The issuance, sale and delivery by the Company of the Shares have been duly
authorized by all requisite corporate action of the Company, and the Shares,
when issued as contemplated hereby, will be validly issued and outstanding,
fully paid and nonassessable, with no personal liability attaching to the
ownership thereof at the time of their issuance.
7.4. Offering Exemption.
Subject to the accuracy of the Employee's representations and warranties in
Section 5 and the compliance by the Employee with the terms of this Agreement,
the offer, sale and issuance of the Shares pursuant to the terms of this
Agreement do not require registration under the Act or registration or
qualification under any applicable state "blue sky" or securities laws (or if so
required, have been so registered or qualified).
SECTION 8. Legends on Shares.
In addition to any legends which may be required under the Stockholders
Agreement, and other agreement between the Company and the Employee or
otherwise, each certificate representing the Bonus Shares shall have
conspicuously printed on it the following legends:
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS AS SET FORTH IN A RESTRICTED STOCK ISSUANCE AND STOCK PURCHASE
AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER OR HIS PREDECESSOR
IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE
CORPORATION."
(b) Any legend required to be placed thereon by the applicable blue sky
laws of any state.
SECTION 9. Employment.
The parties acknowledge that nothing in this Agreement shall affect in any
manner whatsoever the rights or obligations of the parties with respect to
Employee's employment by the Company.
SECTION 10. Indemnification.
(a) The Company shall indemnify, defend and hold harmless the Employee
against all liability, loss or damage, together with all reasonable costs and
expenses related thereto
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(including reasonable legal fees and expenses), relating to or arising from the
untruth, inaccuracy or breach of any of the representations, warranties or
agreements of the Company contained in this Agreement.
(b) The Employee shall indemnify and hold harmless the Company and Eos
Partners, L.P. ("Eos") against all liability, loss or damage, together with all
reasonable costs and expenses related thereto (including reasonable legal fees
and expenses), relating to or arising from the untruth, inaccuracy or breach of
any of the representations, warranties or agreements of the Employee contained
in this Agreement; provided, however, that the Company's and Eos' recourse for
any breach of the representation and warranty of the Employee contained in
Section 6.2(h) shall be limited to (i) the right to terminate the Employee for
"Cause" in accordance with the terms of the Employment Agreement and/or (ii) the
Shares.
SECTION 11. Rights as a Shareholder.
Subject to the provisions and limitations hereof and the terms of the
Stockholders Agreement, the Employee may, during the term of this Agreement,
exercise all rights and privileges of a shareholder of the Company with respect
to the Shares.
SECTION 12. Miscellaneous Provisions.
(a) The parties will execute such further instruments and take such further
action as may reasonably be necessary to carry out the intent of this Agreement.
(b) All notices, claims, certificates, requests, demands and other
communications to any party shall be in writing and shall be deemed to have been
duly given if personally delivered or if sent by nationally-recognized overnight
courier, by telecopy, or by registered or certified mail, return receipt
requested and postage prepaid, addressed to such party as follows:
If to the Corporation, to:
PMT Holdings, Inc.
c/o Eos Partners, L.P.
000 Xxxx Xxxxxx -00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000;
with copies to:
X'Xxxxxxxx Graev & Xxxxxxxx, XXX
00 Xxxxxxxxxxx Xxxxx
0
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
Telephone: (000) 000-0000;
if to the Employee, to him at the address set forth on the
signature page hereto:
or to such other address as the party to whom notice is to be given may have
furnished to the other parties in writing in accordance herewith. Any such
notice or communication shall be deemed to have been delivered and received (i)
in the case of personal delivery, on the date of such delivery, (ii) in the case
of dispatch by nationally-recognized overnight courier, on the next business day
following such dispatch, (iii) in the case of telecopy transmission, when
received and (iv) in the case of mailing, on the fifth business day after the
posting thereof.
(c) The Company may assign its rights under this Agreement. The Employee
may not assign his rights or obligations under this Agreement without the
written consent of the Company. If any such assignment requires consent of any
Person, the parties agree to cooperate in requesting such consent. This
Agreement shall inure to the benefit of the Company and Eos and their respective
successors and assigns and, subject to the restrictions on transfer set forth in
the Stockholders Agreement, be binding upon Employee, Employee's heirs,
executors, administrators, successors and permitted assigns.
(d) No waiver of any breach or condition of this Agreement shall be deemed
to be a waiver of any other or subsequent breach or condition, whether of like
or different nature.
(e) This Agreement and the other writings and agreements referred to herein
or delivered pursuant hereto contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, among the parties with respect
to their subject matter.
(f) THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR
CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER
JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE
OF NEW YORK TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF
THE STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS
AGREEMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT OF
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LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY
APPLY.
(g) This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same instrument.
(h) It is the desire and intent of the parties hereto that the provisions
of this Agreement be enforced to the fullest extent permissible under the laws
and public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Agreement shall be adjudicated
by a court of competent jurisdiction to be invalid, prohibited or unenforceable
for any reason, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
Notwithstanding the foregoing, if such provision could be more narrowly drawn so
as not to be invalid, prohibited or unenforceable in such jurisdiction, it
shall, as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
(i) This Agreement may not be amended, modified or supplemented except by a
writing executed by both parties.
(j) The section headings contained in this Agreement are included for
convenience of reference only and are not intended by the parties to be a part
of or to affect the meaning or interpretation of this Agreement.
(k) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO
ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS
RELATED HERETO.
* * * * *
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IN WITHNESS WHEREOF, the parties hereto have executed this Agrssment as of
the day and year first above written.
"The Company"
PMT HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxx
------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President, Assistant Secretary
and Assistant Treasurer
"Employee"
/s/ Xxxxxx Xxxxx
------------------------------------------
Name: Xxxxxx Xxxxx
Address: 0000 Xx. Xxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
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CONSENT
The undersigned spouse of Employee agrees that the spouse's interest in the
Bonus Shares and the Purchased Shares subject to this Agreement shall be
irrevocably bound by this Agreement and the Stockholders Agreement and further
understands and agrees that any community property interest, if any, shall be
similarly bound by this Agreement and the Stockholders Agreement.
/s/
-------------------------------
Spouse of Employee
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SCHEDULE C TO EXHIBIT 10.17
The following agreement is substantially identical in all material respects
(except for the named parties) to Exhibit 10.17:
Restricted Stock Issuance and Stock Purchase Agreement dated as of March 31,
1997 between the Company and Angeli.
