Exhibit C
Sales Plan
Sales Plan dated January 16, 2004 (this "Sales Plan") between Xxxxxx X.
Xxxx ("Seller") and Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx"), acting as agent.
A. Recitals
--------
1. This Sales Plan is entered into between Seller and Bear Xxxxxxx as
Seller's adoption of a written plan for trading securities that complies with
the requirements of Rule 10b5-1(c)(1) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act").
2. Seller is establishing this Sales Plan in order to permit the orderly
disposition of a portion of Seller's holdings of the common stock, par value
$.01 per share (the "Stock"), of Xxxxxxx Industries, Inc. (the "Issuer"),
issuable upon the exercise of options to acquire 900,000 shares of Stock at an
exercise price of $2.0625 per share pursuant to an option agreement dated
December 4, 1991 (the "December Options") and an option agreement dated March 3,
1992 (the "March Options" and, together with the December Options ,
the"Options").
B. Seller's Representations, Warranties and Covenants
--------------------------------------------------
1. As of the date on which Seller executed this Sales Plan, Seller was not
aware of any material nonpublic information concerning the Issuer. Seller
entered into this Sales Plan in good faith and not as part of a plan or scheme
to evade compliance with the federal securities laws.
2. The Stock to be sold under this Sales Plan upon exercise of the Options
will not be subject to any liens, security interests or other encumbrances or
limitations on disposition other than the exercise provisions of the Options and
those imposed by Rule 144 under the Securities Act of 1933, as amended (the
"Securities Act"), or, if applicable, an effective registration statement dated
November 2, 2001 under the Securities Act (the "Registration Statement").
3. While this Sales Plan is in effect, Seller agrees not to sell any Stock
through any broker other than Bear Xxxxxxx. Seller agrees not to alter or
deviate from the terms of this Sales Plan while aware of any material non-public
information with respect to the Issuer.
4. Seller agrees to provide Bear Xxxxxxx with a certificate dated as of the
date hereof and signed by the Issuer substantially in the form of Exhibit A
hereto prior to commencement of sales of Stock pursuant to this Sales Plan.
5. Seller agrees to complete, execute and deliver to Bear Xxxxxxx a
Seller's representation letter dated as of the date hereof substantially in the
form of Exhibit B hereto prior to the commencement of sales of Stock pursuant to
this Sales Plan.
6. The execution and delivery of this Sales Plan by Seller and the
transactions contemplated by this Sales Plan will not contravene any provision
of applicable law or any
agreement or other instrument binding on Seller or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over Seller.
7. Seller agrees that until this Sales Plan has been terminated he shall,
upon request from Bear Xxxxxxx delivered to Seller from time to time, provide
such information as is reasonably requested to confirm that sales under this
Sales Plan are in compliance with Rule 144 or, if applicable, the Registration
Statement.
8. Seller agrees that he shall not, directly or indirectly, communicate any
information relating to the Stock or the Issuer to any employee of Bear Xxxxxxx
or its affiliates who is involved, directly or indirectly, in executing this
Sales Plan at any time while this Sales Plan is in effect.
9. (a) Seller agrees to make all filings, if any, required under Sections
13(d), 13(g) and 16 of the Exchange Act in a timely manner, to the extent any
such filings are applicable to Seller.
(b) Seller agrees that he shall in connection with the performance of this
Sales Plan comply with all applicable laws, including, without limitation,
Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.
(c) Seller acknowledges that Seller is deemed an insider of the Issuer for
purposes of Section 16 of the Exchange Act.
10. (a) Seller represents and warrants that the Stock to be sold pursuant
to this Sales Plan will be issued upon exercise of the Options and upon issuance
will be eligible for sale under Rule 144 of the Securities Act or pursuant to
the Registration Statement.
(b) Seller agrees not to take, and agrees not to cause any person or entity
with which Seller 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 hereunder not to meet all applicable requirements of Rule 144 if
applicable. It is understood, however, that Seller shall not be precluded from
selling Stock pursuant to this Sales Plan in reliance on the Registration
Statement.
(c) Seller agrees to file Forms 144 for the sales to be effected under this
Sales Plan at such times as Seller may be required or permitted by applicable
law.1
(d) Bear Xxxxxxx agrees to conduct sales pursuant to this Sales Plan in
accordance with the manner of sale requirement of Rule 144 under the Securities
Act or pursuant to the Registration Statement. In no event shall Bear Xxxxxxx
effect any sale under Rule 144 if such sale would exceed the then-applicable
volume limitation under Rule 144, assuming that the sales to be made
--------
1 The Seller's representation on the Forms 144 regarding Seller's knowledge
of material information regarding the Issuer may be made as of the date
the Sales Plan is adopted. The "Remarks" section of each Form 144 should
state that the sale is being made pursuant to a previously adopted plan
intended to comply with Rule 10b5-1(c) and indicate the later of the date
the Sales Plan was adopted or was most recently amended and that the
representation is made as of such date.
2
by Bear Xxxxxxx under this Sales Plan are the only sales subject to such
limitation or sell Stock pursuant to the Registration Statement if the number of
shares to be sold exceeds that which Seller is eligible to sell under the
Registration Statement or if Bear Xxxxxxx receives notice from the Issuer in
accordance with Section C.3.(e) that the Registration Statement is no longer
effective or should no longer be used to effect sales.
C. Implementation of the Plan
--------------------------
1. Seller hereby appoints Bear Xxxxxxx to sell shares of Stock pursuant to
the terms and conditions set forth below. Subject to such terms and conditions,
Bear Xxxxxxx hereby accepts such appointment.
2. This Sales Plan shall commence on January 16, 2004 and end on the
earliest to occur of January 31, 2005, the termination of this Sales Plan
pursuant to paragraph D. hereof, the sale of the maximum number of shares of
Stock to be sold by Bear Xxxxxxx pursuant to this Sales Plan or two business
days after receipt of notice of death of Seller or of the commencement of any
proceedings in respect of or triggered by Seller's bankruptcy or insolvency.
3. (a) Bear Xxxxxxx shall exercise Options to purchase a total of 200,000
shares of Stock on the first business day of each calendar month which shall
immediately succeed the trading day on the New York Stock Exchange on which the
closing sale price of the Stock shall be at least $30.00 per share (except that
with respect to the first calendar month during the term of this Sales Plan such
business day shall not be earlier than January 20, 2004). To the extent shares
of Stock are available from the exercise of Options after Stock is withheld by
the Issuer to pay required Federal, state and local withholding taxes due with
respect to such Option exercise, Bear Xxxxxxx shall sell, as soon as reasonably
practicable but with time and price discretion with Xxxxx Xxxxxxxx or Xxxx
Xxxxxxxxx or a successor registered representative designated by Bear Xxxxxxx,
the net amount of Stock remaining (the "Monthly Sale Amount"), at a gross price
before deduction of commissions or xxxx-down of at least $30.00 per share (the
"Minimum Sale Price"). The Monthly Sale Amount may commence being sold on the
business day following the Option exercise and may be sold on any business day
thereafter until all such shares are sold (each such day, a "Sale Day").
In addition, on one occasion during the second or third month during each
three-month period covered by a Form 144, on a business day which shall
immediately succeed a trading day on the New York Stock Exchange on which the
closing price of the Stock shall be at least $30.00 per share, Xxxxx Xxxxxxxx or
Xxxx Xxxxxxxxx or a successor registered representative of Bear Xxxxxxx may, in
their discretion, exercise Options to purchase such additional number of shares
of Stock which, net of the amount of Stock after Stock is withheld by the Issuer
to pay required Federal, state and local withholding taxes due with respect to
such Option exercise, together with all shares of Stock sold or to be sold by
Bear Xxxxxxx during such three-month period, may equal the maximum number of
shares of Stock which may be sold by Seller during such three-month period
pursuant to Rule 144. Thereafter, Xxxxx Xxxxxxxx or Xxxx Xxxxxxxxx or a
successor registered representative designated by Bear Xxxxxxx shall sell, as
soon as reasonably practicable but with time and price discretion, the net
amount of Stock remaining after Stock is withheld by the Issuer to pay required
Federal, state and local withholding taxes due with respect to such Option
exercise (the "Additional Monthly Sale Amount") at the Minimum Sale Price. The
Additional Monthly Sale Amount may commence being sold on the business day
following the Option exercise and may be sold on any Sale Day.
3
The Issuer shall notify Bear Xxxxxxx not later than the opening of trading
on the day following each Option exercise of the number of shares of Stock to be
withheld by the Issuer to pay required Federal, state and local withholding
taxes due with respect to each Option exercise.
Notwithstanding the foregoing, Bear Xxxxxxx shall not exercise Options if
there are 250,000 or more shares of Stock in the Plan Account (as defined below)
which have not been sold by Bear Xxxxxxx pursuant to this Sales Plan, nor shall
Bear Xxxxxxx exercise Options to purchase more than 900,000 shares of Stock
during the term of this Sales Plan and, during the term of this Sales Plan, one
or more exercises of Options may be reduced so as not to exceed such limitation.
The first 800,000 Options exercised under this Sales Plan shall be from the
December Options and the remaining 100,000 Options exercised shall be from the
March Options.
(b) Subject to the Minimum Sale Price and the other applicable provisions
of this Sales Plan, Bear Xxxxxxx shall sell the Monthly Sale Amount and the
Additional Monthly Sale Amount under ordinary principles of best execution.
(c) The Monthly Sale Amount, the Additional Monthly Sale Amount and any
other applicable provisions of this Sales Plan shall be adjusted automatically
on a proportionate basis to take into account any stock split, reverse stock
split or stock dividend with respect to the Stock or any similar transaction
with respect to the Stock that occurs during this Sales Plan.
(d) Seller understands that Bear Xxxxxxx may not be able to effect a sale
on a Sale Day due to a market disruption or a legal, regulatory or contractual
restriction applicable to Bear Xxxxxxx or any other event or circumstance (a
"Blackout"). Seller also understands that even in the absence of a Blackout,
Bear Xxxxxxx 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.
(e) Seller and Bear Xxxxxxx agree that if the Issuer enters into a
transaction that results, in the Issuer's good faith determination, in the
imposition of trading restrictions on Seller, such as a pooling-of-interests
transaction or stock offering requiring an affiliate lock-up ( an "Issuer
Restriction"), and if the Issuer and Seller shall provide Bear Xxxxxxx at least
three (3) days' prior written notice signed by the Issuer and Seller and
confirmed to Bear Xxxxxxx by telephone (in each case) (Attn: Xxxxxxx Xxxxxx,
Tel. No. (000) 000-0000; Fax No.: (000) 000-0000 and Xxxxx Xxxxxxxx, Tel. No.
(000) 000-0000; Fax No. (000) 000-0000), then Bear Xxxxxxx will cease effecting
sales under this Sales Plan until notified in writing by both the Issuer and
Seller that such restrictions have terminated. Bear Xxxxxxx shall resume
effecting sales in accordance with this Sales Plan as soon as practicable after
the cessation or termination of a Blackout or receipt of the notice as set forth
in the preceding sentence that the Issuer Restriction has ended. Any unfilled
sales that are not executed due to the existence of a Blackout or an Issuer
Restriction shall be deemed to be cancelled and shall not be effected pursuant
to this Sales Plan.
(f) Seller agrees to make appropriate arrangements with the Issuer and its
transfer agent and stock plan administrator to permit Bear Xxxxxxx to furnish
notice to the Issuer of the
4
exercise of the Options and to have underlying shares of Stock delivered to Bear
Xxxxxxx as necessary to effect sales under this Sales Plan, and Bear Xxxxxxx
agrees to do so. Seller hereby authorizes Bear Xxxxxxx to serve as Seller's
agent and attorney-in-fact and, in accordance with the terms of this Sales Plan,
to exercise the Options in order to sell the Monthly Sale Amount and the
Additional Monthly Sale Amount. Seller agrees to complete, execute and deliver
to Bear Xxxxxxx Stock Option Cashless Exercise Forms, substantially in the form
attached hereto as Exhibit C, for the exercise of Options pursuant to this Sales
Plan at such times and in such numbers as Bear Xxxxxxx shall request. Stock
received upon exercise of Options shall be delivered to an account at Bear
Xxxxxxx in the name of and for the benefit of Seller (the "Plan Account"). Bear
Xxxxxxx and Seller acknowledge that, upon each exercise of Options, the Issuer
will withhold a number of shares of Stock having an aggregate fair market value
equal to the minimum required Federal, state and local withholding amount due
with respect to such Option exercise, and shall deliver to Bear Xxxxxxx the
number of shares of Stock exercised net of any shares so withheld.
(g) Bear Xxxxxxx shall withdraw Stock from the Plan Account in order to
effect sales of Stock under this Sales Plan.
(h) Bear Xxxxxxx shall, in connection with the exercise of Options, remit
to the Issuer the exercise price thereof. The exercise price shall be deducted
from the proceeds of the sale of the Stock, if any, and paid to the Issuer,
together with interest thereon computed in accordance with Bear Xxxxxxx'x
customary practices. If there are no proceeds from the sale of Stock, then
Seller shall be liable to Bear Xxxxxxx for any amounts paid by Bear Xxxxxxx to
the Issuer in connection with such exercise.
(i) Bear Xxxxxxx shall provide Seller and the Issuer all information with
respect to sales of Stock pursuant to this Sales Plan that is required for
Seller and the Issuer to ensure compliance with securities rules and
regulations. The Issuer shall file on a timely basis all forms required to be
filed by Seller under the Securities Act and the Exchange Act with respect to
such sales.
4. To the extent that any Stock remains in the Plan Account after the end
of, or upon termination of this Sales Plan, Bear Xxxxxxx agrees to return such
Stock promptly to the Issuer's transfer agent for relegending to the extent that
such Stock would then be subject to transfer restrictions in the hands of Seller
or otherwise to be put in such name as directed by Seller.
5. Subject to the parameters specified in Section C.(3). above, and in each
such case subject to the manner of sale requirement of Rule 144 being satisfied
as provided in Section B.(10).(d), sales of the Stock may be effected, in whole
or in part, on an agency basis or, if Bear Xxxxxxx is a market maker (as the
term is defined in Section 3(a) (38) of the Exchange Act) in the Stock at the
time that any sale is to be made under this Sales Plan, Bear Xxxxxxx may, in its
sole discretion, effect one or more sales on a principal basis commensurate with
all regulatory requirements regarding best execution practices.
6. Seller acknowledges and agrees that he does not have authority,
influence or control over any sales of Stock effected by Bear Xxxxxxx pursuant
to this Sales Plan and will not attempt to exercise any authority, influence or
control over such sales.
5
D. Termination or Notification
---------------------------
1. This Sales Plan may not be terminated prior to the end of the Sales
Plan, except upon direction by Seller or by notice from Bear Xxxxxxx that Bear
Xxxxxxx, in its sole discretion, has determined that it is prohibited from
continuing to operate as agent by a legal, contractual or regulatory restriction
applicable to it. Any modification of this Sales Plan by Seller will be made in
good faith and not as part of a scheme to evade the prohibitions of Rule
10b5-1(c)(1) under the Exchange Act. In particular, subject to Seller's right to
terminate this Sales Plan, Seller agrees that he will not alter or modify this
Sales Plan at any time that Seller is aware of any material non-public
information with respect to the Issuer.
E. Limitation of Liability
-----------------------
1. Notwithstanding any other provision hereof, neither Seller nor Bear
Xxxxxxx shall be liable to the other for:
(a) special, indirect, punitive, exemplary or consequential damages,
or incidental losses or incidental damages of any kind, even if advised of
the possibility of such losses or damages or if such losses or damages
could have been reasonably foreseen, or
(b) any failure to perform or to cease performance or any delay in
performance that results from a cause or circumstance that is beyond its
reasonable control, including but not limited to failure of electronic or
mechanical equipment, strikes, failure of common carrier or utility
systems, severe weather, market disruptions or other causes commonly known
as "acts of God".
2. Seller has consulted with his own advisors as to the legal, tax,
business, financial and related aspects of, and has not relied upon Bear Xxxxxxx
or any person affiliated with Bear Xxxxxxx in connection with, Seller's adoption
and implementation of this Sales Plan.
3. Seller acknowledges and agrees that in performing his obligations
hereunder neither Bear Xxxxxxx nor any of its affiliates nor any of their
respective officers, employees or other representatives is exercising any
discretionary authority or discretionary control respecting management of
Seller's assets, or exercising any authority or control respecting management or
disposition of Seller's assets, or otherwise acting as a fiduciary (within the
meaning of Section 3(21) of the Employee Retirement Income Security Act of 1974,
as amended, or Section 2510.3-21 of the Regulations promulgated by the United
States Department of Labor) with respect to Seller or Seller's assets. Without
limiting the foregoing, Seller further acknowledges and agrees that neither Bear
Xxxxxxx nor any of its affiliates nor any of their respective officers,
employees or other representatives has provided any "investment advice" within
the meaning of such provisions, and that no views expressed by any such person
will serve as a primary basis for investment decisions with respect to Seller's
assets.
4. Seller agrees to indemnify and hold harmless Bear Xxxxxxx and its
officers, directors, employees, agents and affiliates from and against any
losses, liabilities, claims, damages and expenses ("Losses"), including but not
limited to reasonable attorneys' fees and the costs of investigating or
defending any matter, arising out of or incurred in connection with this
6
Sales Plan, except to the extent Losses are found in a final award or judgment
by an arbitrator or court of competent jurisdiction (not subject to further
appeal) to have resulted primarily and directly from the actions of Bear
Xxxxxxx.
F. Agreement to Arbitrate
----------------------
1. (a) Any dispute between Seller and Bear Xxxxxxx arising out of, relating
to or in connection with this Sales Plan or any transaction relating to this
Sales Plan shall be determined by arbitration only before the New York Stock
Exchange, Inc., the National Association of Securities Dealers, Inc. or the
Municipal Securities Rulemaking Board, as Seller may elect. If Seller makes no
written election addressed to Bear Xxxxxxx by registered mail within fifteen
days after receiving a written demand for arbitration from Bear Xxxxxxx, then
Seller authorizes Bear Xxxxxxx to elect one of the above listed forums for
Seller.
(b) Unless rules of the arbitral forum dictate otherwise, any arbitration
proceeding between Seller and Bear Xxxxxxx shall be held at a location at which
the selected forum regularly conducts such proceedings nearest to the Bear
Xxxxxxx office carrying Seller's accounts at the time the claim arose; this
venue shall apply even if Seller has related disputes with other parties which
cannot be resolved in the same locale. Except for simplified proceedings (small
claims), any arbitration proceeding between Seller and Bear Xxxxxxx shall be
heard and decided by a panel of not fewer than three arbitrators.
(c) The law of the State of New York shall apply in all respects, including
but not limited to determination of applicable statutes of limitation and
available remedies. The award of the arbitrator or a majority of arbitrators
shall be final, and judgment on the award may be entered in any state or federal
court having jurisdiction.
2. Bear Xxxxxxx represents that it, and Seller represents that he,
understands the terms of the above arbitration clause as follows:
(i) Arbitration is final and binding on the parties.
(ii) The parties are waiving their right to seek remedies in court,
including the right to jury trial.
(iii) Pre-arbitration discovery is generally more limited than and
different from court proceedings.
(iv) The arbitrators' award is not required to include factual
findings or legal reasoning, and any party's right to appeal or seek
modification of rulings by the arbitrators is strictly limited.
(v) The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities industry.
(vi) No person shall bring a putative or certified class action to
arbitration, nor seek to enforce any pre-dispute arbitration agreement
against any person who has initiated in court a putative class action or
who is a member of a putative class who has
7
not opted out of the class with respect to any claims encompassed by the
putative class action until:
(A) the class certification is denied;
(B) the class is decertified; or
(C) the customer is excluded from the class by the court.
Such forbearance to enforce an agreement to arbitrate shall not constitute
a waiver of any rights under this Sales Plan except to the extent stated herein.
G. General
-------
1. Seller and Bear Xxxxxxx acknowledge and agree that Bear Xxxxxxx is
acting as agent and custodian for Seller in connection with this Sales Plan and
that Seller is a "customer" of Bear Xxxxxxx within the meaning of Section 741(2)
of Title 11 of the United States Code (the "Bankruptcy Code"). Seller and Bear
Xxxxxxx further acknowledge and agree that this Sales Plan is a "securities
contract," as such term is defined in Section 741(7) of the Bankruptcy Code,
entitled to the protections of, among other sections, Sections 362(b)(6), 546(e)
and 555 of the Bankruptcy Code.
2. This Sales Plan constitutes the entire agreement between the parties
with respect to this Sales Plan and supercedes any prior agreements or
understandings with regard to this Sales Plan.
3. This Sales Plan may be amended by Seller only upon the written consent
of Bear Xxxxxxx and receipt by Bear Xxxxxxx of a certificate signed by Seller
dated as of the date of such amendment certifying that Seller is not aware of
any material non-public information with respect to the Issuer; provided that
the foregoing shall not apply in the case of termination under Section D.
4. All notices to Bear Xxxxxxx under this Sales Plan shall be deemed notice
when received and shall be given to all of the following persons in the manner
specified by this Sales Plan by telephone, by facsimile and by certified mail:
Xxxxxxx Xxxxxx
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxxx Xxxxxxxx
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (212) 000- 0000
8
Xxx Xxxxxxx
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxxxx X. Xxxx
c/o Mueller Industries Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attn: General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxxx
Xxxx Xxxxxxxx
5. Seller's rights and obligations under this Sales Plan may not be
assigned or delegated without the written permission of Bear Xxxxxxx.
6. This 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.
7. If any provision of this 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 Sales Plan will continue
and remain in full force and effect.
8. All transactions contemplated under this Sales Plan shall be effected in
the State of New York. This Sales Plan, and all transactions contemplated
hereunder, shall be governed by and construed in accordance with the internal
laws of the State of New York. This Sales Plan may be modified or amended only
by a writing signed by the parties hereto.
9
NOTICE: THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE IN
PARAGRAPHS F.1 AND F.2.
IN WITNESS WHEREOF, the undersigned have signed this Sales Plan as of the
date first written above.
Xxxxxx X. Xxxx
----------------------------------------
Xxxxxx X. Xxxx
Bear, Xxxxxxx & Co. Inc.
----------------------------------------
Name: Xxxxxxx Xxxxxx
10
EXHIBIT A
ISSUER REPRESENTATION
1. Xxxxxxx Industries, Inc. (the "Issuer") represents that it has reviewed
the Sales Plan dated January 16, 2004 (the "Sales Plan") between Xxxxxx X. Xxxx
("Seller") and Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx") relating to the common
stock, par value $.01 per share, of the Issuer (the "Stock"), and the Sales Plan
does not violate the Issuer's xxxxxxx xxxxxxx policies.
2. The Issuer acknowledges that Seller has authorized Bear Xxxxxxx to serve
as Seller's agent and attorney-in-fact to exercise certain options to purchase
the Stock from time to time pursuant to the Sales Plan. The Issuer agrees to
accept, acknowledge and effect the exercise of such options by Bear Xxxxxxx and
deliver the underlying Stock to Bear Xxxxxxx (free of any legend or statement
restricting its transferability to a buyer) upon receipt of a completed Stock
Option Cashless Exercise Form substantially in the form attached to the Sales
Plan as Exhibit C, net of any shares withheld by the Issuer in payment of
withholding taxes. In the event that the Issuer is not open for business on any
day on which Bear Xxxxxxx is open for business or is unable to give Bear Xxxxxxx
the amount of withholding taxes with sufficient time for Bear Xxxxxxx to make
payment of the exercise price and any applicable withholding taxes, and Bear
Xxxxxxx transmits a Stock Option Cashless Exercise Form on behalf of Seller on
such day, then such exercise will be deemed effective on that day even if Bear
Xxxxxxx could not deliver or send the appropriate payments of exercise price due
to the inability of Bear Xxxxxxx to confirm same with the Issuer; provided,
however, that Bear Xxxxxxx shall promptly attempt to confirm such necessary
information and transmit such necessary funds as soon as practicable upon
confirming such information with the Issuer.
Dated: January 16, 2004
Xxxxxxx Industries, Inc.
By: Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx, General Counsel
EXHIBIT B
SELLER'S REPRESENTATION LETTER
Bear, Xxxxxxx & Co. Inc.
Bear, Xxxxxxx Securities Corp.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Legal Department
----------------
Re: Name of Issuer: Xxxxxxx Industries, Inc.
Class of Stock: Common Stock, $.01 par value
Number of Shares to Be Sold: 900,000
Account Number: 041-80383
Gentlemen:
I have requested that you sell the above-captioned securities as broker for
my account in the manner permitted by Rule 144 (the "Rule") under the Securities
Act of 1933, as amended (the "Securities Act"), pursuant to the Sales Plan I
have established with you pursuant to Rule 10b5-1 (c)(1) under the Securities
Exchange Act of 1934. In connection with this request, I hereby make the
following representations.
1. The above-captioned securities will be acquired by me upon the exercise
of options. The sale of such securities by me will be made in reliance on Rule
144 under the Securities Act or pursuant to a registration statement on Form S-8
(together with a reoffer prospectus on Form S-3) in effect under the Securities
Act.
2. The aggregate number of shares of the above-captioned securities sold by
me and by any person or entity whose sales are required by Rule 144 to be
aggregated with mine during the preceding three months will not exceed the
greater of 1% of the shares outstanding or the average weekly reported trading
volume in such securities on all national securities exchanges and/or reported
through the automated quotation system of a registered securities association
during the four calendar weeks preceding the filing of the Form 144.
3. I have not made and will not make any payment to any other person in
connection with any execution you may effect on my order; and I have not, and
will not pay to Bear, Xxxxxxx Securities Corp., any more than the usual and
customary broker's commission; and I have not solicited or arranged and will not
solicit or arrange for the solicitation of orders to buy in anticipation of or
in connection with the proposed sale pursuant to such order. I have advised and
will advise you of any open sell orders in the above captioned securities with
any other broker or bank pending completion of this order.
4. This order is not part of a distribution of any securities on my behalf,
and I am not an underwriter with respect to these securities. I am not acting in
concert with any other person, persons or entities, and there is no reason for
me to aggregate my sales with any other person, persons or entities.
5. I have filed on Form 144 three executed notices of proposed sale with
the Securities and Exchange Commission and one with the principal national
securities exchange on which the captioned issue is traded, if applicable. I
have attached a copy of the Form 144 as filed by me and the information
contained thereon is accurate and complete as of the date indicated thereon.
6. The number of shares to be sold will be reduced by the number of shares
withheld by the issuer which shall have an aggregate fair market value equal to
the minimum required Federal, state and local withholding amount due with
respect to the exercise of options by me.
7. I have a bona fide intention to sell these securities within a
reasonable time from my filing of such Form 144.
8. I hereby authorize Bear, Xxxxxxx Securities Corp. and its agents and
representatives to make any inquiry of the issuer, issuer's counsel and issuer's
transfer agent that it may deem advisable in connection with the proposed sale
of these securities.
9. I understand that my order may be accepted by you subject to your
investigation as to whether such proposed sale, if executed, will comply with
the Rule and policies of Bear, Xxxxxxx Securities Corp.
10. I understand that it may be necessary for the issuer of these
securities to supply a letter to you certifying that such issuer has filed with
the Securities and Exchange Commission all reports and statements required to be
filed by such issuer within the past twelve (12) months. I agree to use my best
efforts to see that said issuer supplies said letter if deemed necessary by
Bear, Xxxxxxx Securities Corp.
11. I understand that Bear, Xxxxxxx Securities Corp. will, if my order to
sell is accepted, act as no more than my agent or as a market maker as that term
is defined in Section 3(a)(38) of the Securities Exchange Act of 1934 for the
sale of these securities; and that I will receive the proceeds of any sale only
if and when the shares sold are received by Bear, Xxxxxxx Securities Corp. in
good deliverable form.
12. I have not and will not enter into any arrangements with any other
person or entity in respect of the sale of these securities.
Very truly yours,
Xxxxxx X. Xxxx
----------------------
Xxxxxx X. Xxxx
Date: January 16, 2004
EXHIBIT C
STOCK OPTION CASHLESS EXERCISE FORM
I. Instructions to Xxxxxxx Industries, Inc.
A. This constitutes notice under the stock option between the undersigned and
Xxxxxxx Industries, Inc. (the "Issuer") that I elect to exercise my option
to purchase 200,000 shares of the common stock par value $.01 per share, of
the Issuer (the "Stock"), at an exercise price of $ 2.0625 per share.
B. This is a (check one): _______ qualified stock option plan
___X___ non-qualified stock option plan
------------------------ -------------------
Xxxxxx X. Xxxx (Date)
II. Issuer's Acknowledgement of Option Exercise
X. Xxxxxxx Industries, Inc. (the "Issuer") acknowledges that it is in receipt
of a valid option exercise certificate from Xxxxxx X. Xxxx (the
"Executive") covering the exercise of 200,000 shares of Stock.
B. In connection with Bear Xxxxxxx' exercise of the Executive's option to
purchase Stock from the Issuer, the Issuer agrees to promptly deliver the
shares from it's Bear Xxxxxxx Account no. 043-80460 to the Executive's Bear
Xxxxxxx Account no. 041-80383 registered in the name of Bear Xxxxxxx less
any shares withheld by the Issuer in respect of payments of applicable
withholding taxes.
C. Funds should be delivered to the Issuer (check one):
_______ via check to: Xxxxxxx Industries, Inc.
___X___ via wire to: Standard Federal Bank, Troy MI
ABA # ABA No. 000000000
Swift Michus 33
Account # 2705482491
D. The Issuer represents that the shares will be issued pursuant to an
effective registration statement and that the shares will be free of any
restrictive legend.
Signature:
-----------------------------
Print Name/Title:
----------------------
Date:
----------------------------
