Exhibit 10
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement") dated June 18, 2002, by and
among Bandag, Incorporated, an Iowa corporation ("Company"), and Xxxxxxx X.
Xxxxxx ("Shareholder").
RECITALS
A. Shareholder owns an aggregate of 1,114,746 shares of the Company's
Class B Common Stock and 418,371 shares of the Company's Class A Common Stock
(collectively the "Shares").
B. Company desires to purchase the Shares from Shareholder, and
Shareholder desires to sell the Shares to Company, upon the terms and conditions
herein set forth.
C. In addition, Shareholder desires to sell, and Company desires to
purchase, certain options held by Shareholder to purchase shares of the
Company's Class A Common Stock.
NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the parties hereto agree as
follows.
1. PURCHASE AND SALE OF SHARES
Pursuant to the terms of this Agreement, Shareholder hereby agrees to
sell the Shares to Company and Company hereby agrees to purchase the Shares from
Shareholder.
2. PURCHASE PRICE - PAYMENT
2.1 Purchase Price. The purchase price payable for the 1,114,746 shares
of Class B Common Stock shall be $27.04 per share, and the purchase price for
the 418,371 shares of Class A Common Stock shall be $24.00 per share, for a
total purchase price of $40,183,635.84 (the "Purchase Price").
2.2 Payment of Purchase Price; Delivery of Shares. The Purchase Price
will be paid by the Company on June 19, 2002 by wire transfer of immediately
available funds to an account designated by Shareholder. On such date,
Shareholder shall deliver to Company stock certificates representing the Shares
which are in certificated form, duly endorsed for transfer or with duly executed
stock powers attached, in either case with signatures guaranteed, and, as to
Shares held in book entry account at the Company's transfer agent, duly executed
stock powers with signatures guaranteed.
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3. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
Shareholder makes the following representations and warranties to the
Company. Each of these representations and warranties is true and correct on the
date hereof, shall remain true and correct hereafter, shall be unaffected by any
investigation heretofore or hereafter made by the Company and shall survive the
transactions provided for herein.
3.1 Power. Shareholder has full power, legal right and authority to enter
into, execute and deliver this Agreement and to carry out the transactions
contemplated hereby.
3.2 Validity. This Agreement has been duly and validly executed and
delivered on behalf of Shareholder and is a legal, valid and binding agreement
of Shareholder, enforceable in accordance with its terms, except as such may be
limited by bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally, and by general equitable principles.
3.3 Title and Number of Shares. Shareholder is transferring to the
Company good and marketable title to the Shares, free and clear of all
mortgages, liens (statutory or otherwise), security interests, claims, pledges,
licenses, equities, options, conditional sales contracts, assessments,
reservations, limitations, or other charges or encumbrances of any nature
whatsoever (collectively, "Liens") including, without limitation, voting trusts
or agreements, proxies, and marital or community property interests.
3.4 No Violation. Neither the execution and delivery of this Agreement
nor the consummation by Shareholder of the transactions provided for herein will
violate or conflict with, or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or will
result in the termination of, or accelerate the performance required by, or
result in the creation of any Lien upon the Shares under, any term or provision
of any contract, commitment, understanding, arrangement, agreement or
restriction of any kind or character to which Shareholder is a party or by which
Shareholder or any of the Shares may be bound or affected.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company makes the following representations and warranties to
Shareholder, each of which is true and correct on the date hereof, shall remain
true and correct hereafter, shall be unaffected by any investigation heretofore
or hereafter made by Shareholder and shall survive the transactions provided for
herein.
4.1 Organization. The Company is a corporation validly existing under the
laws of the State of Iowa.
4.2 Power. The Company has all requisite corporate power to enter into
this Agreement and to carry out the transactions contemplated hereby.
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4.3 Authority. The execution and delivery of this Agreement and the
consummation of the transactions provided for herein have been duly authorized
by the Board of Directors of the Company and is in accordance with the laws of
the State of Iowa. No other corporate act or proceeding on the part of the
Company or its shareholders is necessary to authorize this Agreement or the
consummation of the transactions provided for herein. This Agreement constitutes
a valid and binding agreement of the Company, enforceable in accordance with its
terms, except as such may be limited by bankruptcy, insolvency, reorganization
or other laws affecting creditors' rights generally, and by general equitable
principles.
4.4 Solvency. After giving effect to the purchase of shares hereunder,
the Company will be in compliance with Section 490.640 of the Iowa Business
Corporation Law.
5. STOCK OPTIONS
5.1 In-the-Money Options. Shareholder owns the following "in-the-money"
options to purchase the Company's Class A Common Stock:
Date of Grant Number of Shares Option Price
------------- ---------------- ------------
May 2, 2000 1,700 $21.0313
March 13, 2001 1,825 $24.35
Shareholder agrees to sell, and Company agrees to purchase, all such
options at an aggregate price of $7,933.04 (being equal to the difference
between the Option Price per share and the closing price on the New York Stock
Exchange of the Company's Class A Common Stock on the date hereof multiplied by
the number of shares shown above) (the "Option Purchase Price").
The Option Purchase Price will be paid by the Company on June 19, 2002 by
wire transfer of immediately available funds to an account designated by
Shareholder. Upon delivery of the Option Purchase Price, such options and the
related Nonqualified Stock Option Award Agreements shall then be deemed
terminated and cancelled.
5.2 Cancellation of March 12, 2002 Option. Shareholder agrees with
Company that the Nonqualified Stock Option Award Agreement dated March 12, 2002
covering the grant of options to purchase 1,800 shares at an option price of
$32.53 per share, as well as any other option award granted by the Company to
the Shareholder except as otherwise covered by Section 5.1 above, is hereby
cancelled and terminated.
6. MISCELLANEOUS
6.1 Further Assurance. From time to time, at the Company's request and
without further consideration, Shareholder will execute and deliver to the
Company such documents
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and take such other action as the Company may reasonably request in order to
consummate more effectively the transactions provided for herein.
6.2 Law Governing Agreement. This Agreement may not be modified or
terminated orally, and shall be construed and interpreted according to the
internal laws of the State of Iowa, excluding any choice of law rules that may
direct the application of the laws of another jurisdiction.
6.3 Entire Agreement. This instrument embodies the entire agreement
between the parties hereto with respect to the transactions contemplated herein,
and there have been and are no agreements, representations or warranties between
the parties other than those set forth or provided for herein.
6.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.5 Headings. The headings in this Agreement are inserted for convenience
only and shall not constitute a part hereof.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
BANDAG, INCORPORATED XXXXXXX X. XXXXXX
By: /s/ Xxxxxx X. Xxxxxxxxxx By:/s/ Xxxxxx X. Xxxxxx
----------------------------------- ------------------------------
Xxxxxx X. Xxxxxxxxxx Xxxxxx X. Xxxxxx
Vice President, Chief Financial Officer Attorney-in-Fact
By:/s/ Xxx X. Xxxxxx, Xx.
------------------------------
Xxx X. Xxxxxx, Xx.
Attorney-in-Fact
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