Exhibit (c)(1)
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT dated November 20, 1995 ("Agreement") among Xx.
Xxxxx X. Xxxx, a resident of Sanford, North Carolina ("Stockholder"), Xxxxxxx
Acquisition Corp., a North Carolina corporation ("Purchaser"), and Xxxxxxx
Corporation, a Delaware corporation ("Xxxxxxx").
WHEREAS, Purchaser desires to purchase from Stockholder, and
Stockholder desires to sell to Purchaser, all of the shares of common stock, par
value $1.00 per share (the "Shares"), of Communication Cable, Inc., a North
Carolina corporation (the "Company"), that Stockholder owns at any time from the
date hereof until the close of business on January 15, 1996 (subject to
extension as provided in Section 15 hereof) (collectively, the "Stockholder
Shares"), including Shares acquired by Stockholder upon exercise of options to
purchase Shares owned by Stockholder at any time during the term of this
Agreement (the "Company Options"), all upon the terms and subject to the
conditions hereof;
NOW, THEREFORE, in consideration of $1,000 paid by Xxxxxxx to
Stockholder, the sufficiency and receipt of which are hereby acknowledged, as
well as the mutual covenants and agreements set forth herein, the parties hereto
agree as follows:
1. PUT AND CALL OPTIONS; EXERCISE; ADJUSTMENTS
(a) Subject to the terms and conditions hereof, Purchaser hereby grants
to Stockholder an irrevocable option (the "Put Option") to sell the Stockholder
Shares to Purchaser at a purchase price of $12.00 per Share (the "Purchase
Price"). Subject to the terms and conditions hereof, the Put Option may be
exercised by Stockholder at any time and from time to time from the date hereof
until the close of business on January 15, 1996 (subject to extension as
provided in Section 15 hereof).
(b) Subject to the terms and conditions hereof, Stockholder hereby
grants to Purchaser an irrevocable option (the "Call Option") to purchase the
Stockholder Shares from Purchaser at the Purchase Price. Subject to the terms
and conditions hereof, the Call Option may be exercised by Purchaser at any time
and from time to time after December 31, 1995 and prior to the close of business
on January 15, 1996 (subject to extension as provided in Section 15 hereof).
(c) To exercise a Put Option, Stockholder shall send a written notice
to Purchaser (the "Put Exercise Notice") specifying a date (not earlier than the
third business day nor later than the fifth business day following the date such
notice is given) for the closing of such sale and the number of Stockholder
Shares to be sold on that date. To exercise a Call Option, Purchaser shall send
a written notice to Stockholder (the "Call Exercise Notice") specifying a date
(not earlier than the third business day nor later than the fifth business day
following the date such notice is given) for the closing of such purchase and
the number of Stockholder Shares to be purchased on that date. In the event of
any change in the number of issued and outstanding Shares by reason of any stock
dividend, stock split, split-up, recapitalization, merger or other change in the
corporate or capital structure of the Company, the number of Stockholder Shares
subject to this Agreement, the Put Option and the Call Option and the Purchase
Price shall be appropriately adjusted. For purposes of this Agreement,
the Put Option and the Call Option, the term "Stockholder Shares" shall include
any distributions of securities, cash, property or other assets or rights in
respect of Stockholder Shares distributed or issued by the Company on or after
the date of this Agreement.
(d) Upon the written request of Purchaser made at any time following an
exercise of the Put Option or the Call Option, Stockholder agrees to exercise
all of the Company Options that remain outstanding and exercisable or such
lesser number of Company Options as the Purchaser shall have specified in its
request, PROVIDED that Stockholder shall not be required to exercise any Company
Options that are "out-of-the-money" for purposes of Rule 16b-6 under the
Securities Exchange Act of 1934, as amended.
2. CLOSING
The closing (the "Closing") of a purchase and sale pursuant to an
exercise of the Put Option or Call Option shall take place on the date specified
in the Put Exercise Notice or the Call Exercise Notice, as the case may be, at
10:00 A.M., local time, at the offices of Parker, Poe, Xxxxx & Xxxxxxxxx L.L.P.,
0000 Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx, or at such other time and place
as the parties hereto may agree (a "Closing Date"). On each Closing Date,
Stockholder will deliver to Purchaser a certificate or certificates, duly
endorsed (or accompanied by duly executed stock powers), representing the
Stockholder Shares subject to the applicable Put Exercise Notice or Call
Exercise Notice, including the Shares acquired by Stockholder upon exercise of
all Company Options, free and clear of all Liens (as defined below). Any payment
made by Purchaser to Stockholder pursuant to this Agreement shall be made by
certified or official bank check or checks or, at Stockholder's request, by wire
transfer of federal funds to a bank designated by Stockholder. In this
Agreement, the term "Lien" means any lien, claim, charge, encumbrance, pledge,
security interest or other restriction of any nature whatsoever on or with
respect to Stockholder Shares; EXCLUDING, HOWEVER, (i) as regards Stockholder
Shares (including Shares acquired by Stockholder upon exercise of Company
Options), the general restriction on the transferability of such Shares by
virtue of Stockholder's status as a director, officer and/or ten percent
beneficial owner of the Company's outstanding Shares or by virtue of such Shares
being "restricted securities" as defined in Rule 144 under the Securities Act of
1933, as amended, and (ii) as regards Company Options, any and all of the
restrictions thereon stated in the existing Incentive Stock Option Plan of the
Company.
3. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
Stockholder represents and warrants to Purchaser and Xxxxxxx that:
(a) Authority. This Agreement is a valid and binding agreement
of Stockholder enforceable against Stockholder in accordance with its terms.
(b) Stockholder Shares and Company Options. Stockholder is the record
and beneficial holder of, and has good and valid title to, 268,128 Shares, free
and clear of all Liens. Stockholder is the record and beneficial holder of, and
has good and valid title to, Company Options to purchase 47,475 Shares, all of
which were issued to Stockholder pursuant to the Company's Incentive Stock
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Option Plan, and which are free and clear of all Liens and are
exercisable. At each Closing, Stockholder will deliver to Purchaser good and
valid title to the Stockholder Shares subject to the applicable Put Exercise
Notice or Call Exercise Notice, including the Shares acquired by Stockholder
upon exercise of all Company Options, free and clear of all Liens. Except for
the Company Options, there are no options or other rights to acquire or dispose
of, or other contracts (including proxies, voting trusts or voting agreements)
relating to, any Stockholder Shares.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND XXXXXXX
Purchaser and Xxxxxxx jointly and severally represent and warrant to
Stockholder that the execution and delivery of this Agreement by them and the
consummation by them of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Purchaser and
Xxxxxxx and that this Agreement has been duly executed and delivered on behalf
of Purchaser and Xxxxxxx and constitutes a valid and binding obligation of
Purchaser and Xxxxxxx enforceable against Purchaser and Xxxxxxx in accordance
with its terms. Purchaser represents and warrants to Stockholder that any and
all Stockholder Shares acquired hereunder will be acquired by the Purchaser for
purposes of investment and not with a view to or in connection with the
distribution thereof within the meaning of Section 2(11) of the Securities Act
of 1933, as amended. Purchaser has and shall have no participation in any such
undertaking and no participation in the underwriting of any such undertaking.
Each of Purchaser and Xxxxxxx represents that it has access to all information
about the Company that the Company has filed with the Securities and Exchange
Commission.
5. EXPENSES
Subject to Section 12, each party hereto shall pay its own expenses
incurred in connection with this Agreement.
6. COVENANTS
Stockholder covenants and agrees during the Relevant Term not (i) to
sell, transfer, pledge, assign, hypothecate or otherwise dispose of, or
enter into any contract with respect to the sale, transfer, pledge,
assignment, hypothecation or other disposition of, any Stockholder
Shares or Company Options otherwise than pursuant to this Agreement,
(ii) to grant any proxy with respect to any Stockholder Shares or
Company Options, deposit any Stockholder Shares or Company Options into
a voting trust or enter into a voting agreement with respect to any
Stockholder Shares or Company Options otherwise than pursuant to this
Agreement or (iii) to take any action that would make any representation
or warranty of Stockholder herein untrue or incorrect. Stockholder
further covenants and agrees during the Relevant Term: (iv) upon the
receipt or exercise of any Company Option, to notify Purchaser
immediately of such event; (v) upon the written request of Purchaser, to
grant Purchaser or its designee(s) an irrevocable proxy to vote or
otherwise exercise all shareholder rights pertaining to all Stockholder
Shares as directed by Purchaser or such designee(s); and (vi) upon the
reasonable written or oral request of Purchaser, to assist Purchaser
and Xxxxxxx in furtherance of the Acquisition (as defined below) in
the manner and to the extent not inconsistent with
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Stockholder's duties to the Company and its other shareholders and in
the mannerand to the extent he may lawfully do so in his personal capacity as a
shareholder of the Company. In this Agreement, "Relevant Term"
means the period from the date hereof until the earliest to occur of
(i) the acquisition by Purchaser of all of the Stockholder Shares
pursuant to exercise of the Put Option or the Call Option, (ii)
any other acquisition by Purchaser, Xxxxxxx or a Xxxxxxx Affiliate (as
defined in Section 11) of all of the Stockholder Shares, (iii) the time
at which the Put Option and the Call Option may no longer be exercised
(taking into account any extension under Section 15) and the Closings
pursuant to all due and timely exercises of the Put Option and the Call
Option have been consummated as required (including pursuant to any
extension provided under Section 15) or (iv) the close of business
on April 20, 1996.
7. PERFORMANCE GUARANTEE
Xxxxxxx and Purchaser represent and warrant to Stockholder that Xxxxxxx
owns all of the issued and outstanding capital stock of Purchaser. Xxxxxxx
hereby guarantees the faithful and timely performance of the obligations of
Purchaser stated in this Agreement.
8. NOTICES
All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given, if delivered in
person, by overnight courier, by facsimile transmission, telexed or mailed by
certified or registered mail, postage prepaid, return receipt requested, as
follows (or at such other address for a party as shall be specified by like
notice, provided that such a notice shall be effective only upon receipt
thereof):
If to Purchaser or Xxxxxxx:
Xxxxxxx Corporation
0 Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
With a copy (which shall not constitute notice) to:
Parker, Poe, Xxxxx & Xxxxxxxxx L.L.P.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
Fax: (000) 000-0000
If to Stockholder:
Xx. Xxxxx X. Xxxx
0000 Xxxxxxxxx Xxxxx
Xxxx Xxxx
0
Xxxxxxx, Xxxxx Xxxxxxxx 00000
With a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: X. Xxxxxxxx Xxxxxx III, Esq.
Fax: (000) 000-0000
A notice shall be effective as of the date of such delivery, fax or mailing, as
the case may be.
9. PARTIES IN INTEREST
This Agreement shall inure to the benefit of and be binding upon the
parties named herein and their respective successors and assigns. Nothing in
this Agreement, express or implied, is intended to confer upon any person other
than Purchaser, Stockholder or Xxxxxxx, or their successors or assigns, any
rights or remedies under or by reason hereof.
10. ENTIRE AGREEMENT; AMENDMENTS
This Agreement contains the entire agreement between Stockholder, on
the one hand, and Purchaser or Xxxxxxx, on the other hand, with respect to the
subject matter hereof and supersedes all prior and contemporaneous agreements
and understandings, oral or written, with respect to such transactions. This
Agreement may not be changed, amended or modified orally, but rather may be
changed only by an agreement in writing signed by the party against whom any
waiver, change, amendment, modification or discharge may be sought.
11. NO ASSIGNMENT
This Agreement and the Put Option and Call Option granted hereunder
shall in no way be subject to assignment by Stockholder, Purchaser or Xxxxxxx;
PROVIDED, HOWEVER, that (a) Purchaser may assign any or all of its rights or
duties hereunder to any person who is, at the time of the assignment,
controlling, controlled by or under common control with Xxxxxxx or Purchaser (a
"Xxxxxxx Affiliate") and (b) Xxxxxxx may assign its duties hereunder by
operation of law in a merger, reorganization or other similar transaction to a
successor which succeeds to substantially all of its business and assets.
12. INDEMNIFICATION
Purchaser and Xxxxxxx, jointly and severally, agree to
indemnify Stockholder and to hold Stockholder harmless from and against
any loss, liability, cost or expense (including reasonable attorneys'
fees) incurred by Stockholder arising out of any claim by any person or
entity (other than
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a party to this Agreement) resulting from the execution, delivery or
performance of this Agreement, except that neither Purchaser nor Xxxxxxx
shall have any such responsibility relative to any loss, liability, cost
or expense that Stockholder may incur as a result of Stockholder's gross
negligence or intentional misconduct or as a result of the compensation
or benefits paid or made available to Stockholder following the
termination of Stockholder's employment under the Employment Agreement
of even date herewith among Stockholder, Purchaser and Xxxxxxx.
13. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which, when executed, shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same agreement.
14. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of North Carolina.
15. EXTENSION IN CERTAIN EVENTS
(a) In the event that, on January 15, 1996, neither the Put Option nor
the Call Option has been exercised in full, and on such date the Put Option or
the Call Option or both (as the case may be) may not be exercised by reason of
any judicial or regulatory judgment, decree or order preventing or restraining
such exercise (an "Exercise Prohibition"), then the time within which the Put
Option or the Call Option or both (as the case may be) may be exercised
hereunder shall be extended until the earlier of (i) the first date thereafter
on which an Exercise Prohibition does not exist and has not existed for at least
the three preceding consecutive business days (or such other time as Stockholder
and Purchaser agree upon) or (ii) the close of business on April 15, 1996.
(b) In the event that, on the date specified in a Put Exercise Notice or
Call Exercise Notice for the Closing of the purchase and sale of Stockholder
Shares thereunder, such Closing may not be consummated by reason of any judicial
or regulatory judgment, decree or order preventing or restraining such Closing
(a "Closing Prohibition"), then the time for such Closing shall be extended
until the earlier of (i) the first date thereafter on which a Closing
Prohibition does not exist and has not existed for at least the three preceding
consecutive business days (or such other time as Stockholder and Purchaser agree
upon) or (ii) the close of business on April 20, 1996. If a Closing Prohibition
prevents consummation of any Closing until after the close of business on April
20, 1996, then neither party shall have any liability to the other for a failure
to effect such Closing to the extent due to such Closing Prohibition, or any
obligation to complete such Closing, provided the Closing Prohibition was not
the result of the defaulting party's failure to comply in good faith with the
terms of this Agreement.
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(c) If an Exercise Prohibition or Closing Prohibition arises during the
Relevant Term, then the parties hereto shall use their reasonable best efforts
(subject, in the case of Stockholder, to his duties to the Company and its other
shareholders) to remove the Exercise Prohibition or Closing Prohibition, as the
case may be, as soon as practicable.
16. ACQUISITION
As used in this Agreement, the term "Acquisition" means the first to
occur of (i) the purchase by Xxxxxxx, Purchaser or a Xxxxxxx Affiliate of no
less than that number of shares of capital stock of the Company as would then
have voting power sufficient to elect a majority of the directors of the
Company, (ii) the purchase by Xxxxxxx, Purchaser or a Xxxxxxx Affiliate of all
or substantially all of the assets of the Company or (iii) a merger of the
Company with or into Xxxxxxx, Purchaser or a Xxxxxxx Affiliate.
17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations and warranties contained in this Agreement shall
survive delivery of and payment for the Stockholder Shares.
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IN WITNESS WHEREOF, Stockholder, Purchaser and Xxxxxxx have caused this
Agreement to be duly executed and delivered on the day and year first written
above.
/s/ Xxxxx X. Xxxx (L.S.)
Xxxxx X. Xxxx
XXXXXXX ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Its: President
XXXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Its: President and Chief Operating Officer
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