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EXHIBIT 10(b)
STOCK REDEMPTION AGREEMENT
THIS AGREEMENT is made and entered into this 1st day of September,
1998, by and among AUTOCAM CORPORATION, a Michigan corporation (hereinafter
referred to as "Company"), and XXXX X. XXXXXXX, in his individual capacity and
as the donor and co-trustee of the Xxxx X. Xxxxxxx Living Trust u/a dated
February 14, 1986, as amended (hereinafter sometimes referred to as the "Living
Trust"), and XXXXX X. XXXXXXX, in her individual capacity and as co-trustee of
the Living Trust. Xxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx are hereinafter sometimes
referred to collectively as "Stockholders" and individually as a "Stockholder."
WHEREAS, Xxxx X. Xxxxxxx owns or controls a substantial number of
the outstanding shares of Common stock of the Company; and
WHEREAS, Xxxx X. Xxxxxxx intends to make all of said stock presently
owned or controlled by him subject to the terms of this Agreement; and
WHEREAS, Xxxx X. Xxxxxxx may in the future, during his lifetime or upon
his death, transfer shares of said stock to the trustees of his Living Trust as
to which the trustees desire to bind the Living Trust, and any trust or trust
share established thereunder, to sell those shares of stock to the extent
provided in this Agreement; and
WHEREAS, the Company and the Stockholders have previously entered into
certain Stock Redemption Agreements, dated November 6, 1992, September 20, 1993
and August 1, 1996, which provide for the redemption of up to Eighteen Million
Dollars ($18,000,000) of the Stockholders' shares in the Company following both
of their deaths; and
WHEREAS, the Company has previously acquired Northwestern Mutual
Joint Complife policies No. 12200147, No. 12443196 and No. 13542762 in the
amount of Five Million Dollars ($5,000,000), Six Million Dollars ($6,000,000)
and Seven Million Dollars ($7,000,000), respectively, in order to fund its
obligations under the Stock Redemption Agreements; and
WHEREAS, the Company and the Stockholders, for their mutual protection
and the success of the Company, wish to make provisions for the redemption of an
additional Five Million Dollars ($5,000,000) of the Stockholders' stock in the
Company following both of their deaths.
NOW, THEREFORE, in consideration of the mutual covenants to buy and
sell and the obligations expressed herein by the parties, the Stockholders do
hereby bind themselves, their executors, administrators, and the Living Trust,
and the Company does hereby bind itself and its successors, and each hereto
agree as follows:
ARTICLE I
Redemption of Decedent's Stock
1.1. Upon the death of the last to die of Xxxx X. Xxxxxxx and
Xxxxx X. Xxxxxxx, the Company shall redeem and the estate of such deceased
Stockholder, or trust holding stock includable in the estate of such deceased
Stockholder, shall sell to the Company that number of shares of Common stock
included in the deceased's estate for federal estate tax purposes, at the value
specified in Article II, below, as shall equal (rounded down to the nearest
whole share) the amount eligible for treatment as a Section 303 redemption but
not more than Five Million Dollars ($5,000,000), in any event. For purposes of
this Agreement, a Section 303 redemption means a distribution in full payment in
exchange for stock pursuant to Section 303 of the Internal Revenue Code of 1986,
as amended (the "Code").
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1.2. If more than one entity bound by this Agreement owns shares
of Common stock included in the estate of a deceased Stockholder, the redemption
of which will qualify as a Section 303 redemption, then the redemption of shares
of each class shall be made proportionately from each such holder according to
the number of shares held by each.
1.3. The sale required by this Agreement shall be consummated
within such time as to assure the redemption shall be treated as a Section 303
redemption. Subject to such limitation, the sale closing shall be held upon
sixty (60) days' written notice given to the Company by the then holder of the
stock to be redeemed but in no event shall the date specified for closing be
earlier than two hundred forty (240) days after the death of the Stockholder.
The closing of the redemption shall be at the principal office of the Company at
which time the trustees of the Living Trust (or trust or trust shares
established thereunder) or the Stockholder's legal representative, or both,
shall deliver certificates representing the shares being redeemed under this
Agreement appropriately endorsed in blank.
1.4. The redemption price shall be paid in cash in full at
closing.
1.5. The Company shall, as part of this Agreement, purchase and
maintain Northwestern Mutual Joint Complife Policy No. 14538421 on the lives of
the Stockholders in the amount of Five Million Dollars ($5,000,000.00) (the
"Policy"). The Policy and any proceeds received under the Policy shall be held
by the Company in trust for the purposes of this Agreement. The Company shall
pay all premiums on the Policy and shall give proof of payment to the
Stockholders within 15 days after the due date of each premium. The Company
shall be the sole owner of the Policy and may apply to the payment of premiums
any dividends declared and paid on the Policy.
ARTICLE II
Valuation
The price at which shares shall be redeemed hereunder shall be the
value of the shares to be redeemed as included in the estate of the deceased
Stockholder for federal estate tax purposes.
ARTICLE III
Miscellaneous
3.1. The Company and the Stockholders may alter, amend, or
terminate this Agreement by a written agreement to that effect signed by the
Company and all of the then living Stockholders.
3.2. The Stockholders, for themselves, their executors,
administrators, and the Living Trust, and the Company, for itself and its
successors, hereby agree to execute any and all instruments necessary to carry
out the terms of this Agreement.
3.3. The references herein to Section 303 of the Code shall
include any corresponding provisions of any successor federal revenue act.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day, month and year first above written.
AUTOCAM CORPORATION
By: \s\ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, President
\s\ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, Individually and as co-Trustee of the Xxxx
X. Xxxxxxx Living Trust u/a dated February 14, 1986
\s\ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, Individually and as co-Trustee of the Xxxx
X. Xxxxxxx Living Trust u/a dated February 14, 1986
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