STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT dated as of June 1, 2001, between XXXXXX
XXXXX COMPANY, a Massachusetts corporation (the "Company"), and the XXXXXX XXXXX
COMPANY Retirement Savings Partnership Plan (the "Plan").
W I T N E S S E T H:
WHEREAS, the Company has established and maintains the Plan, for the
benefit of all employees eligible to participate therein;
WHEREAS, the Company has established and maintains a trust (the "Trust")
for purposes of holding the Plan's assets and administering the participants
individual accounts and the Company has appointed the Exeter Trust Company
("Trustee") to act as the directed trustee thereof pursuant to a Trust Agreement
dated as of August 11, 1997 between the Company and the Trustee (the "Trust
Agreement");
WHEREAS, the Plan provides that the assets of the Trust may be invested in,
among other things, shares of common stock of the Company ("Common Stock");
WHEREAS, the Plan provides (Section 12.2) that the Retirement Committee of
the Plan (the "Committee") is the "named fiduciary" and the "administrator" with
respect to the Plan and in such capacities it has authority to control and
manage the operation and administration of the Plan.
WHEREAS, the Company now wishes to issue and sell shares of Common Stock to
the Plan and the Committee now wishes for the Plan to purchase shares of Common
Stock from the Company, and no commission will be paid in connection with the
purchase of such shares of Common Stock; and
WHEREAS, the Committee has received an opinion of Empire Valuation
Services, Inc. that the market for the Common Stock is not a recognized market
and that based upon, among other things, valuation principles suggested by the
Department of Labor (29 CFR Part 2510) the purchase of shares of Common Stock
pursuant to the terms of this Agreement is fair and equitable to the
participants in the Plan and the price to be paid for such shares is not in
excess of adequate consideration.
P R O V I S I O N S:
NOW THEREFORE, in consideration of these premises and the mutual promises
contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. The Plan hereby agrees to purchase (the "Purchase") with the funds
transferred to the Plan from the termination of the pension plan of Penobscot
Shoe Company, a subsidiary of the Company, and the Company hereby agrees to
issue and sell for cash to the Plan, such number of shares of Common Stock (the
"Shares") as equals an aggregate purchase price of not less than $1,700,000, and
not more than $2,400,000, as determined by the Committee (the "Purchase
Price"), divided by $5.15. The Company will pay all stamp and other transfer
taxes, if any, which may be payable in respect of the issuance, sale and
delivery of the Shares and shall be entitled to any refund thereof.
2. The Purchase shall be consummated in two closings, the first of which
shall take place on the date hereof (such date of delivery being hereinafter
called the "Initial Delivery Date"), and the second of which shall take place on
the date determined by the Committee, but in no event later than one hundred
twenty (120) days from the date hereof (the "Second Delivery Date"), in each
case at the offices of Xxxxx Xxxxxx Xxxxxx LLP, Rochester, New York, or as
otherwise agreed by the parties hereto. The Initial Delivery Date and the Second
Delivery Date are both referred to as the "Delivery Dates." On the Initial
Delivery Date, the Company shall issue to the Plan 330,097 shares of Common
Stock, and the Plan shall pay to the Company $1,700,000. On the Second Delivery
Date, the Company shall issue to the Plan the number of shares as are due for
the remaining portion of the Purchase Price determined by the Committee that it
will pay, and the Plan shall deliver the portion of the Purchase Price due
therefor. On each of the Delivery Dates, the Trustee shall deliver to the
Company the portion of the Purchase Price that is due in immediately available
funds, and the Company will deliver to the Plan a certificate or certificates
representing the Shares to be issued which shall be registered in the name of
the Plan, the Trustee, as directed trustee under the Plan, or in the name of its
nominee or Plan Custodian, as directed by the Committee. The Committee
understands that the certificate(s) representing the Shares will bear the
following legend and that a notation restricting their transfer will be made on
the stock transfer books of the Company:
The shares of common stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended. Such shares of
stock may not be sold, assigned, pledged or otherwise transferred in the
absence of an effective registration statement under said Securities Act
covering such transfer or an opinion of counsel satisfactory to the issuer
that registration under said Securities Act is not required.
3. The Company hereby represents, warrants and covenants to the Plan and
the Committee as follows:
(a) the Company (i) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Massachusetts and (ii)
has full corporate power and authority to execute and deliver this
Agreement, to carry out the transactions contemplated hereby, to own, lease
and operate its assets and properties, and to carry on its business as now
being conducted;
(b) this Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights generally and to
general principles of equity (regardless of whether considered in a
proceeding at law or in equity);
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(c) the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will
not violate (i) the Company's Articles of Incorporation or By-Laws, each as
amended or restated to date or, (ii) any provision of any agreement,
instrument, order, award, judgment or decree to which the Company is a
party or by which it or any of its businesses or properties are bound, or
(iii) any statute, rule or regulation of any federal, state or local
government or governmental agency applicable to the Company except in the
case of subparagraphs (ii) or (iii) of this Section 3(c) for any such
violations which either individually or in the aggregate do not have a
material adverse effect on the business or properties of the Company and
its subsidiaries taken as a whole;
(d) except for any necessary applications with The Nasdaq Stock Market
with respect to any newly issued Shares, no approval, authorization or
other action by, or filing with, any government authority is required to be
obtained or made by the Company in connection with the execution, delivery
and performance by the Company of this Agreement and the consummation of
the transactions contemplated hereby;
(e) the Shares have been duly and validly authorized and, when issued
and delivered to and paid for by the Plan pursuant to this Agreement, (i)
will be validly issued, fully paid and nonassessable and not liable to any
further call or assessment, (ii) the certificates representing the Shares
comply with the applicable requirements of Massachusetts law and any other
applicable law and (iii) the Plan will acquire full right, title and
interest in and to the Shares free and clear of any and all liens, claims,
charges and encumbrances (other than rights of participants in the Plan);
(f) the Company's Annual Report on Form 10-K for the year ended
December 31, 2000 and quarterly reports on Form 10-QSB for the quarterly
period ended March 31, 2001, on the respective dates filed with the
Securities and Exchange Commission, conformed in all material respects to
the requirements of the Securities Exchange Act of 1934, as amended;
(g) no person or other entity is entitled to any fees or commissions
due to the Company's actions in connection with the purchase and sale of
the Shares; and
(h) the purchase of the Shares on the Delivery Date by the Plan for
the Purchase Price is for not greater than "adequate consideration" as that
phrase is defined in Section 3(18) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and any proposed regulations
thereunder, and will not constitute a prohibited transaction under Section
406 of ERISA or Section 4975(c) of the Code by reason of the exemptions set
forth in Section 408(e) of ERISA and Section 4975(d)(13) of the Code;
provided that in making the representations contained in this Section 3(h),
the Company has relied upon the opinion of counsel.
4. The Committee and the Plan represent and warrant to the Company as
follows:
(a) the Plan (i) is a duly organized and validly existing retirement
plan under ERISA, and (ii) has full power and authority to execute and
deliver this Agreement and to carry out the transactions contemplated
hereby;
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(b) this Agreement has been duly authorized, executed and delivered by
the Plan and constitutes a valid and binding obligation of the Plan,
enforceable against the Plan in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights generally and to
general principles of equity (regardless of whether considered in a
proceeding at law or in equity);
(c) the execution, delivery and performance of this Agreement by the
Plan and the consummation of the transactions contemplated hereby will not
violate (i) the Plan, or (ii) any material provision of any agreement,
instrument, order, award, judgment or decree to which the Plan is a party
or by which it or any of its assets are bound or (iii) any material
statute, rule or regulation of any federal, state or local government or
governmental agency applicable to the Plan;
(d) the Plan is acquiring the Shares solely for investment purposes
and not with a view to, or for sale in connection with, any distribution
thereof; provided, however, that the Shares will be allocated to the
accounts of the participants in the Plan pursuant to the terms of the Plan
and distributions may be made to participants and beneficiaries of the Plan
in shares of Common Stock, it being understood that the Shares are being
sold to the Plan pursuant to an exemption from the registration
requirements of the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon this representation and warranty;
(e) no person or other entity is entitled to any commissions due to
the Committee's actions in connection with the purchase and sale of the
Shares.
5. The Company will, at its expense, exercise best efforts to prepare, file
and cause to be effective within thirty (30) days of the Initial Delivery Date,
and will use its best efforts to cause to remain effective, a registration
statement on an appropriate form, including a final prospectus (the
"Registration Statement"), under and complying with the Securities Act and the
rules and regulations thereunder, relating to the shares of the Company's Common
Stock held by the Plan. The Company shall also use its best efforts to register
or qualify such shares covered by the Registration Statement under the "blue
sky" or securities laws of such jurisdictions within the United States as the
Committee may reasonably request; PROVIDED, HOWEVER, that the Company shall not
be required to consent to the general service of process for all purposes in any
jurisdiction where it is not then qualified to do business.
6. The representations, warranties and agreements of both parties in this
Agreement shall survive the date hereof and each Delivery Date.
7. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts to be executed, delivered
and performed in such state, to the extent not preempted by the laws of the
United States of America. This Agreement, the Plan and Trust Agreement
(including documents referred to therein or delivered pursuant thereto) set
forth the entire Agreement of the parties with respect to the subject matter
contained herein and supersede all prior oral and written agreements, if any,
between the parties with respect to such subject matter. This Agreement shall
bind and inure to the benefit of all successors to, and assigns of, the parties
hereto; provided, however, that the Plan shall not assign or otherwise transfer
its interest in, or obligations under, this Agreement without the written
consent of the Company, except that the Plan may assign, without the Company's
written
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consent, all its rights hereunder to any institution exercising trust powers
under the Trust Agreement. In the event that any provision of this Agreement
shall be declared unenforceable by a court of competent jurisdiction, such
provision shall be stricken herefrom and the remainder of this Agreement shall
remain binding on the parties hereto. In the event any such provision shall be
so declared unenforceable due to its scope or breadth, then it shall be narrowed
to the scope or breadth permitted by law.
8. This Agreement may be executed in two counterparts, each of which shall
be deemed an original, but each of which taken together shall constitute one and
the same instrument.
9. This Agreement may not be modified with respect to the obligations of a
party hereto except by an instrument in writing signed by such party.
10. All notices, requests, or other communications required or permitted to
be delivered hereunder shall be in writing, delivered to each party hereto at
its address specified in the Trust Agreement and shall become effective as
therein provided. Any party hereto may from time to time, by written notice
given as aforesaid, designate any other address to which notices, requests or
other communications addressed to it shall be sent.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first above written.
XXXXXX XXXXX COMPANY
By: /s/ Xxxxx X. Xxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman and CEO
XXXXXX XXXXX COMPANY RETIREMENT
SAVINGS PARTNERSHIP PLAN
By Its Retirement Committee
By: /s/ Xxxxx X. Xxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman
By: /s/ Xxxxxxx XxXxxxxxx
-------------------------
Name: Xxxxxxx XxXxxxxxx
Title: Member
