Exhibit 10.1
Xxxx X. Xxxxx
#10 DuClaire
Xxxxxxx, Xxxxxxxx 00000
October 27, 1999
Mr. Xxxxx Xxxxxxx Mr. Xxxxxx Xxxxxxx
3209 Falcon Point 000 Xxxxxxxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxxxxxxx 00000
Gentlemen:
As you know, we are currently examining the terms of the Amended and
Restated Stock Restriction and Buy-Sell Agreement, dated as of March 18, 1999,
by and among The GSI Group, Inc. (the "Company"), Xxxxx Xxxxxxx ("Xxxxxxx"),
Xxxxxx Xxxxxxx ("Xxxxxxx"), Xxxx Xxxx ("Xxxx") and Xxxxx Xxxxx ("Xxxxx"), and
the Stockholder Agreement, dated as of March 18, 1999 by and among the Company,
Andrade, Buffett, Funk and Xxxxx. In the interim and until we agree otherwise,
we have agreed as follows:
1. Share Price. We agree that, except as provided in Paragraph 2
below, the total amount either we or any of our respective heirs, legal
representatives, successors or assigns will accept as the purchase price (the
"Purchase Price") for any share of Company common stock (a "Share") to be
purchased from any of us pursuant to any agreement we may have entered into with
the Company will be the greatest of the following amounts:
(i) Six and 34/100 Dollars ($6.34) per Share;
(ii) Two (2) times the Book Value (as defined below) of the Company
divided by the total number of Shares outstanding as of the date of the
"Event", as such term is defined in the Buy-Sell Agreement; or
(iii) An amount equal to: (a) five (5) times the Company's EBITDA (as
defined below), minus (b) the principal balance of the Company's interest
bearing debt as of the last day of the month immediately preceding the date
of the Event, divided by (c) the total number of Shares outstanding as of
the date of the Event.
As used herein, the term "Book Value" of the Company means the total
stockholder's equity as reflected on the Company's balance sheet as of the last
day of the Company's fiscal year immediately preceding the date of the Event,
determined by the certified public accounting firm regularly engaged by the
Company (the "Public Accountants") in accordance with generally accepted
accounting principles applied on a basis consistent with that of prior years.
The Book Value, when certified in writing by the Public Accountants, shall be
binding and conclusive on all parties concerned.
As used herein, the term "EBITDA" shall mean an amount equal to the
average net income of the Company for the Fiscal Period (as defined below) (i)
using the FIFO method of accounting for inventories; and (ii) before deducting
interest, income taxes, depreciation and amortization. The term "Fiscal Period"
shall mean (y) the three (3) consecutive fiscal years of the Company immediately
preceding the fiscal year in which the Event occurs, or (z) if the Event occurs
during the last four (4) months of any given fiscal year of the Company, the
three (3) consecutive fiscal years of the Company ending with the fiscal year in
which the Event occurs.
2. Death. Notwithstanding anything contained in Paragraph 1 above or
in any prior agreement to the contrary, upon the death of any one of us (the
"Decedent"), we each agree that all Shares owned by the Decedent (the
"Decedent's Shares") will be purchased by the surviving stockholders on a pro
rata basis (and we each agree to take such steps as may be necessary to cause
our respective legal representatives and heirs to sell such Decedent's Shares)
for an aggregate purchase price equal to the amount of the death benefits
received with respect to the life insurance policy on the Decedent held by the
trust established in 1996 (and as surviving stockholders, we each agree to use
such death benefits to purchase such Decedent's Shares). In the event any of the
Decedent's Shares are not so purchased for any reason, all of the remaining
Decedent's Shares may be (but are not required to be) purchased by the Company
from the Decedent's legal representative for the Purchase Price per Share set
forth in Paragraph 1 above.
3. No Obligation to Purchase. Notwithstanding anything contained in
any prior agreement to the contrary, although the Company and/or the
stockholders may have an option to purchase Shares above upon the occurrence of
an Event, neither the Company nor the stockholders will be under any obligation
to do so (except as provided in Paragraph 2 above relating to death benefits
received with respect to the life insurance policy on the Decedent). Any
decision as to whether the Company will exercise any of its options to purchase
Shares relating to an Event will be made by majority vote of the Directors of
the Company then serving (other than the Director whose Shares are to be
purchased).
4. Elimination of Bridge Payment. The provisions of Section 6 of the
Buy-Sell Agreement will be of no force or effect.
5. Subchapter S Status. We each acknowledge that in entering into
this Letter Agreement, it is not our intention to take any steps which would
cause the Company to lose its Subchapter S status. Accordingly, in the event
that any provision contained herein would have any such effect, we agree that
such provision will be of no force or effect.
Please acknowledge your agreement to the foregoing as provided below.
Upon execution, this Letter Agreement will constitute a binding agreement among
us.
Very truly yours,
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Agreed to as of the date set forth above:
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
Acknowledged and consented to as
of the date set forth above:
The GSI Group, Inc.
By: /s/ Xxxxxxx X. Xxxxx
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Its: Secretary
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