Exhibit 10 (j)
Outside Director Stock Purchase Agreement
XXXXXXXX GOVERNOR COMPANY
OUTSIDE DIRECTOR STOCK PURCHASE AGREEMENT
Dated as of
April 24, 2002
XXXXXXXX GOVERNOR COMPANY
Attention: Xx. Xxxx Xxxxxxxx, President
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Dear Xx. Xxxxxxxx:
The undersigned, Xxxxx X. Xxxxxx, understands that you, Xxxxxxxx Governor
Company, a Delaware corporation (the "Company") is authorized to issue
60,000,000 shares, designated Common Stock of the par value of $0.00875 per
share (the "Company Stock"), of which as of April 24, 2002, (i) 11,324,954
shares were issued and outstanding, and (ii) 835,046 shares were issued but are
not outstanding and are owned and held by the Company as treasury shares.
In accordance with the Company's Director Share Ownership Guideline, the Company
is authorized to sell treasury shares of the Company Stock to each of its
directors who are not officers, members or employees of the Company (the
"Outside Directors"). The aggregate purchase price to me for the shares of
Company Stock I purchase will be One Hundred Twenty Thousand Dollars
($120,000.00) (the "Purchase Price"). The price per share shall be equal to the
Fair Market Value of such stock as quoted on the Nasdaq National Market at the
close of business on the date of this agreement. The shares of the company Stock
to be purchased by me hereunder shall be the number of whole shares of Company
Stock which may be acquired for the Purchase Price based upon the Fair Market
Value per share as of the Purchase Date (the "Shares").
I confirm my agreement with the Company as follows in connection with my
purchase of the Shares. Accordingly, the company confirms its agreement with me.
(1) PURCHASE OF SHARES. Subject to the terms and conditions herein set
forth, I agree to purchase from the Company, and the Company agrees to
sell to me, the number of Shares which may be purchased for the Purchase
Price at a price per share equal to the Fair Market Value per share as
of the Purchase Date.
(2) PAYMENT OF PURCHASE PRICE. In payment of the Purchase Price, I
agree to deliver to the Company within 10 days following the Purchase
Date a Non-Interest Bearing Installment Note from me in the amount of
the Purchase Price dated the Purchase Date and payable to your order,
expressed to mature in 60 monthly
installments as follows: $2,000.00 on the 20th day of May 2002, and
$2,000.00 on the same day of each and every succeeding month thereafter
to and including a final installment on the 20th day of April 2007, such
note to be in the form of the Non-Interest Installment Note from me
which is attached hereto as Exhibit A and hereby made a part hereof (the
"Installment Note"). The remaining balance on the Installment Note will
be accelerated in the event I cease to be an Outside Director of the
Company for any reason and shall be payable 90 days thereafter.
(3) PURCHASE DATE. The purchase and sale provided for herein shall be
consummated and closed at the office of the Company, 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, commencing at 11:00 a.m., Rockford
local time, on April 25, 2002.
(4) ASSIGNMENT OF RETAINER FEES. I agree that commencing as of the
Purchase Date, and on each of the next 60 payment dates thereafter, the
Company may withhold and retain the monthly retainer fees due me from
the company for my service as a member of the Board of Directors of the
Company (the "Retainer Fees") in satisfaction of the payment of the
Purchase Price for the Shares under the Installment Note. I hereby sell,
assign, convey and transfer to the Company all my right, title and
interest to any and all payments due me as Retainer Fees, including any
and all increases thereof. The assignment of Retainer Fees shall be
effective as of the Purchase Date until the Installment Note is paid and
satisfied in full.
(5) PREPAYMENT. The unpaid monthly installments of the Purchase Price
for Shares to be purchased by me hereunder may be prepaid by me in whole
or in part at any time. In case of any prepayment of the Purchase Price
in part, such prepayment shall be applied to the installments hereof in
the inverse order of their respective maturities. Any monthly Retainer
Fees in excess of $2,000.00 shall be applied by the Company as a
prepayment hereunder.
(6) ISSUANCE OF STOCK CERTIFICATE. On the Purchase Date, the Company
shall issue to me a stock certificate evidencing the number of Shares
purchased by me hereunder.
(7) TRANSFERABILITY AND CONTINUING OBLIGATION. The rights granted me
hereunder may not be sold, pledged, assigned, transferred or otherwise
disposed of in any manner whatsoever. Only I shall have the right to
purchase Shares hereunder. Furthermore, except as mutually agreed
otherwise by the parties hereto, I understand and agree that my
obligation under the Installment Note and this Agreement are with
recourse and binding on me individually until satisfied in full,
including without limitation, in the event (i) of my death, or (ii) that
I am no longer an Outside Director for any reason.
(8) FINANCIAL RISKS. I acknowledge that I have received all information
which I deem necessary and appropriate to evaluate the financial risks
inherent in my purchase of Shares hereunder, and I acknowledge that I
have satisfactory and complete
information concerning the business, operations, and finances of the
Company in response to all my inquiries in respect thereof.
(9) INVESTMENT REPRESENTATION. I represent and warrant that the Shares
acquired by me pursuant to this agreement (i) will be acquired by me for
my own account, (ii) will be acquired by me for investment and not with
a view to, or for sale in connection with, any distribution thereof,
(iii) will be acquired by me with no present intention of selling or
distributing such shares. I agree that I will not dispose of the Shares
purchased by me hereunder in such a manner as will violate the
Securities Act of 1933, as amended, or any applicable rules and
regulations thereunder and until and unless the Company shall have been
furnished with an opinion of counsel satisfactory to it to the effect
that any proposed disposition of such shares may be effected without
such violation. I agree that all certificates evidencing the Shares
acquired by me hereunder will be marked with a legend as follows:
"The shares evidenced by this Certificate have not been
registered under the Securities Act of 1933, as amended. The shares
evidenced hereby may not be sold, transferred, pledged or
hypothecated in the absence of an effective registration statement
for the shares under the Securities Act of 1933, as amended, or an
opinion of counsel satisfactory to the Corporation prior to the
proposed transaction that registration is not required under said
Act."
I represent that I have been informed by the Company and understand that
the Shares acquired by me hereunder will not be registered under the
Securities Act of 1933, as amended, and that the Company does not
contemplate and is not legally required to file any such registration.
Accordingly, in connection with any future resale of the Shares acquired
by me hereunder I acknowledge that my attention has been directed to
Rule 144 under the Securities Act of 1933, as amended, and that I have
been advised that the Shares acquired by me hereunder must be held
indefinitely unless they are subsequently registered under the
Securities Act of 1933, as amended, or an exemption from such
registration is available.
(10) NOTICES. All notices, requests, demands and other communication
hereunder shall be in writing and shall be deemed to have been duly
given when delivered personally or when deposited in the United States
mail, registered or certified, return receipt requested, postage
prepaid, addressed as follows:
(a) if to me, to:
Xx. Xxxxx X. Xxxxxx
0000 00xx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
(b) if to you, to:
Xxxxxxxx Governor Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Vice President, Chief
Financial Officer And Treasurer
or to such other address or addresses as you or I may communicate in
writing to the other by notice given pursuant to the provisions of this
paragraph (10). Written notice given by any other method shall be deemed
effective only when actually received by the party to whom given.
(11) MISCELLANEOUS. This Agreement (i) constitutes the entire agreement
between you and me with respect to the subject matter hereof, (ii) shall
not be assigned or transferred by your or me, (iii) shall be governed in
all respects by the laws of the State of Illinois, and (iv) may be
executed in two or more counterparts which together shall constitute a
single instrument.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to me the enclosed copy of this Outside Director Stock
Purchase Agreement whereupon it shall become a binding agreement between us.
Very truly yours,
By
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Xxxxx X. Xxxxxx
The foregoing is hereby confirmed
and agreed to as of the 24th day of
April, 2002.
XXXXXXXX GOVERNOR COMPANY
By
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Xxxx X. Xxxxxxxx, Chairman and CEO
