Exhibit 10.2
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this "Agree-
ment"), made this 24th day of October, 1996, between Xxxxx
Xxxxxxxx Corporation, a Delaware corporation (the "Seller")
and Wachovia Bank of North Carolina N.A., a national banking
association, not in its individual or corporate capacity, but
solely in its capacity as trustee (the "Trustee") of The
Xxxxx Xxxxxxxx Corporation Employee Stock Benefit Trust (the
"Trust", which is hereinafter sometimes referred to as the
"Purchaser") under a trust agreement between the Seller and
the Trustee dated as of October 24, 1996 (the "Trust Agree-
ment")
W I T N E S S E T H:
WHEREAS, as contemplated by the Trust Agreement,
the Purchaser is to purchase from the Seller, and the Seller
is to sell to the Purchaser, NINE MILLION shares of the
Seller's Common Stock, par value $1.00 per share (the "Common
Shares"), all of which are currently issued and held by the
Seller as treasury stock, all as more specifically provided
herein;
NOW, THEREFORE, in consideration of the mutual cov-
enants and undertakings contained herein, and subject to and
on the terms and conditions herein set forth, the parties
hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
1.1. Purchase and Sale. Subject to the terms and
conditions set forth herein, the Seller will sell to the Pur-
chaser, and the Purchaser will purchase from the Seller, at
the Closing (as hereinafter defined), the Common Shares, and,
in consideration for the Common Shares, the Purchaser will
deliver to the Seller the note in the form of Appendix I to
this Agreement in the principal amount of $564,750,000 (the
"Note").
1.2. Closing. The closing of the sale and pur-
chase of the Common Shares hereunder (the "Closing") will be
held at the offices of the Seller at 10:00 a.m., Pasadena,
California time, on the date of execution and delivery of
this Agreement by the Seller and the Purchaser, or at such
other time, date and place as may be mutually agreed upon by
the Seller and the Purchaser.
1.3. Delivery and Payment. At the Closing, the
Seller will deliver to the Purchaser a certificate represent-
ing the Common Shares, which certificate shall be registered
in the name of the Trustee, or the name of its nominee,
against payment by the Purchaser to the Seller of the aggre-
gate consideration set forth in Section 1.1 therefor. The
Seller will pay all stamp and other transfer taxes, if any,
that may be payable in respect of the sale and delivery of
the Common Shares.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Purchaser
as follows:
2.1. Corporate Existence and Authority. The
Seller (a) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware,
(b) has all requisite corporate power to execute, deliver and
perform this Agreement and (c) has taken all necessary corpo-
rate action to authorize the execution, delivery and perfor-
xxxxx of this Agreement.
2.2. No Conflict. The execution and delivery of
this Agreement does not, and the consummation of the transac-
tions contemplated hereby will not, violate, conflict with or
constitute a default under (a) the Seller's certificate of
incorporation or bylaws, (b) any agreement, indenture or
other instrument to which the Seller is a party or by which
the Seller or its assets may be bound or (c) any law, regula-
tion, order, arbitration, award, judgment or decree appli-
cable to the Seller.
2.3. Validity. This Agreement has been duly exe-
cuted and delivered by the Seller and is a valid and binding
agreement of the Seller enforceable against the Seller in ac-
cordance with its terms, except as the enforceability thereof
may be limited by any applicable bankruptcy, insolvency, re-
organization, moratorium, fraudulent conveyance or other laws
affecting the enforcement of creditors' rights generally, and
by general principles of equity.
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2.4. The Common Shares. The Common Shares have
been duly authorized and issued and are held by the Seller as
treasury stock and when sold as contemplated hereby will be
validly issued, fully-paid and non-assessable shares of the
Seller. No stockholder of the Seller has any preemptive or
other subscription right to acquire any shares of Common
Stock. The Seller will convey to the Purchaser, on the date
of Closing, good and valid title to the Common Shares free
and clear of any liens, claims, security interests and encum-
brances.
2.5. Litigation. There are no actions, suits,
proceedings, arbitrations or investigations pending, or to
the Seller's best knowledge, threatened in any court or be-
fore any governmental agency or instrumentality or arbitra-
tion panel or otherwise against or by the Seller which seek
to or could restrain, prohibit, rescind or declare unlawful,
or result in substantial damages in respect of, this Agree-
ment or the performance hereof by the Seller (including,
without limitation, the delivery of the Common Shares).
2.6. Business and Financial Information. Seller
has heretofore delivered to the Purchaser copies of the au-
dited consolidated balance sheets, statements of stockhold-
ers' equity, statements of income and statements of cash
flows of Seller and its subsidiaries as of and for the fiscal
years ending December 31, 1995 and December 31, 1994 and the
unaudited consolidated balance sheet, statement of stockhold-
ers' equity, statement of income and statement of cash flows
of Seller and its subsidiaries as of and for the six months
ending June 30, 1996 (including the related notes and sched-
ules, the "Seller Financial Statements"). The Seller Xxxxx-
cial Statements fairly present the consolidated results of
operations, changes in stockholders' equity and cash flows
for the periods set forth therein and the consolidated xxxxx-
cial position as at the dates thereof of Seller and its sub-
sidiaries, in accordance with generally accepted accounting
principles consistently applied throughout the periods in-
volved, except as set forth in the notes thereto and subject,
in the case of unaudited financial statements, to the omis-
sion of certain notes not ordinarily accompanying such un-
audited financial statements and to normal year-end audit ad-
justments which in each case will not be material to Seller
and its subsidiaries taken as a whole. Since December 31,
1995, Seller has filed with the Securities and Exchange Com-
mission all forms, reports and documents required pursuant to
the Securities Act of 1933, as amended (the "1933 Act"), and
the Securities Exchange Act of 1934, as amended (the "1934
Act"), to be filed by it (the "Disclosure Documents"). At
the time filed, all of the Disclosure Documents complied as
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to form in all material respects with all applicable require-
ments of such Acts. None of the Disclosure Documents, at the
time filed, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the
Seller as follows:
3.1. Authority; Validity. The Purchaser has full
power and authority under the Trust to execute and deliver
this Agreement and the Note and to consummate the transac-
tions contemplated hereby. This Agreement has been duly au-
thorized, executed and delivered by the Trustee on behalf of
the Trust and is a valid and binding agreement of the Pur-
chaser enforceable in accordance with its terms, except as
the enforceability thereof may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium, fraudu-
lent conveyance or other laws affecting the enforcement of
creditors' rights generally, and by general principles of eq-
uity. The Note has been duly authorized by the Trustee on
behalf of the Trust and, upon the execution and delivery by
the Trustee on behalf of the Trust, the Note will be a valid
and binding agreement of the Purchaser enforceable in accor-
dance with its terms, except as the enforceability thereof
may be limited by any applicable bankruptcy, insolvency, re-
organization, moratorium, fraudulent conveyance or other laws
affecting the enforcement of creditors' rights generally, and
by general principles of equity.
3.2. No Conflict. The execution and delivery of
this Agreement do not, and the execution and delivery of the
Note, and the consummation of the transactions contemplated
hereby and thereby will not, violate, conflict with or con-
stitute a default under (a) the terms of the Trust, (b) any
agreement, indenture or other instrument to which the Trust
is a party or by which the Trust or its assets may be bound
or subject or (c) any law, regulation, order, arbitration
award, judgment or decree applicable to the Trust.
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ARTICLE IV
RESTRICTIONS ON DISPOSITION OF THE COMMON SHARES
4.1. Restricted Securities. The Purchaser ac-
knowledges that the Purchaser is acquiring the Common Shares
pursuant to a transaction exempt from registration under the
1933 Act. The Purchaser represents, warrants and agrees that
all Common Shares acquired by the Purchaser pursuant to this
Agreement are being acquired for investment without any in-
tention of making a distribution thereof, or of making any
sale or other disposition thereof which would be in violation
of the 1933 Act or any applicable state securities law, and
that the Purchaser will not dispose of any of the Common
Shares, except that the Trustee will, from time to time, con-
vey a portion of the Common Shares to the participants in the
Company's stock incentive plans to satisfy the obligations of
the Seller thereunder; convey a portion of the Common Shares
to the trustee of the Company's 401(k) Plan; and may convey
or sell a portion of the Common Shares to fund the obliga-
tions of the Seller under certain other plans as may be set
forth in Schedule A to the Trust Agreement, and upon termina-
tion of the Trust to the extent that the Trust then holds any
Common Shares, all in compliance with all provisions of ap-
plicable federal and state law regulating the issuance, sale
and distribution of securities.
4.2. Legend. Until such time as the Common Shares
are registered pursuant to the provisions of the 1933 Act,
any certificate or certificates representing the Common
Shares delivered pursuant to Section 1.3 will bear a legend
in substantially the following form:
"The shares represented by this certificate
have not been registered under the Securities Act
of 1933, as amended, and may not be sold, trans-
ferred or otherwise disposed of unless they have
first been registered under such Act or unless an
exemption from registration is available."
The Seller may place stop transfer orders against the regis-
tration of transfer of any share evidenced by such a certifi-
cate or certificates until such time as the requirements of
the foregoing are satisfied.
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ARTICLE V
COVENANTS OF SELLER
The Seller agrees that:
5.1. Financial Statements, Reports and Documents.
Subsequent to the Closing, and for as long as the Common
Shares are held by the Trust (unless the Trustee shall other-
wise consent in writing), the Seller shall deliver to the
Trustee each of the following:
(a) Annual Statements. As soon as available
and in any event within one hundred twenty (120) days
after the close of each fiscal year of the Seller, cop-
ies of the consolidated balance sheet of the Seller and
its subsidiaries as of the close of such fiscal year and
consolidated statements of income, statements of stock-
holders' equity and statements of cash flow of the
Seller and its subsidiaries for such fiscal year, in
each case setting forth in comparative form the figures
for the preceding fiscal year, all in reasonable detail
and accompanied by an opinion thereon of Coopers & Ly-
brand LLP, or of other independent public accountants of
recognized national standing, to the effect that such
financial statements have been prepared in accordance
with generally accepted accounting principles consis-
tently applied (except for changes in which such accoun-
tants concur) and that the examination of such accoun-
tants in connection with such financial statements has
been made in accordance with generally accepted auditing
standards and, accordingly, includes such tests of the
accounting records and such other auditing procedures as
were considered necessary in the circumstances;
(b) SEC and Other Reports. Promptly upon
their becoming available, one copy of each financial
statement, report, notice or proxy statement sent by the
Seller to stockholders generally and of each regular or
periodic report, registration statement or prospectus
(other than any registration statement on Form S-8 and
its related prospectus) filed by the Seller with the Se-
curities and Exchange Commission or any successor
agency; and
(c) Other Information. Such other informa-
tion concerning the business, properties or financial
condition of the Seller as the Trustee shall reasonably
request.
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The Seller will comply with all federal, state, local and
foreign laws, regulations or orders, and all the rules of any
stock exchange or similar entity which are applicable to it
or to the conduct of its business, and, without limiting the
generality of the foregoing, shall make such filings, distri-
butions and disclosures as are required by the 1933 Act, the
1934 Act or any of the regulations, rules or orders promul-
gated thereunder, insofar as the failure to comply would ma-
terially and adversely affect the Seller and its subsidiaries
taken as a whole. The Seller will maintain complete and ac-
curate books, records and accounts in accordance with the re-
quirements of Section 13(b)(2) under the 1934 Act.
5.2. Registration; Listing. If so requested by
the Trustee, the Seller shall cause the Common Shares to be
listed on the New York Stock Exchange, Inc. The Seller will,
as promptly as practicable (but in any event within 75 days)
after a request by the Trustee, prepare for filing at the
Seller's expense a registration statement with the Securities
and Exchange Commission sufficient to permit the public of-
fering of such Common Shares in accordance with the terms of
this Agreement, and the Seller will use its best efforts in
all matters necessary or advisable to cause such registration
statement to become effective as promptly as practicable and
to remain effective for a reasonable period, all to the ex-
tent requisite to permit the sale or other disposition of
such Common Shares. The Seller shall also use its best ef-
forts to register or qualify the Common Shares so registered
under the securities blue sky laws of such jurisdictions
within the United States as the Trustee may reasonably re-
quest; provided, however, that the Seller shall not be re-
quired to consent to general service of process for all pur-
poses in any jurisdiction where it is not then qualified.
ARTICLE VI
CONDITIONS TO CLOSING
6.1. Conditions to Obligations of the Purchaser.
The obligation of the Purchaser to purchase the Common Shares
is subject to the satisfaction of the following conditions on
the date of Closing:
(a) The representations and warranties of the
Seller set forth in Article II hereof shall be true and
correct; and if the Closing shall occur on a date other
than the date of this Agreement, the Purchaser shall
have been furnished with a certificate, dated the date
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of the Closing, to such effect, signed by an authorized
officer of the Seller; and
(b) All permits, approvals, authorizations
and consents of third parties necessary for the consum-
mation of the transactions herein shall have been ob-
tained, and no order of any court or administrative
agency shall be in effect which restrains or prohibits
the transactions contemplated by this Agreement, and no
suit, action or other proceeding by any governmental
body or other person shall have been instituted which
questions the validity or legality of the transactions
contemplated by this Agreement.
6.2. Conditions to Obligations of the Seller. The
obligation of the Seller to issue, sell and deliver the Com-
mon Shares to the Purchaser is subject to the satisfaction of
the following conditions on the date of Closing:
(a) The representations and warranties of the
Purchaser set forth in Article III hereof shall be true
and correct; and if the Closing shall occur on a date
other than the date of this Agreement, the Seller shall
have been furnished with a certificate dated the date of
the Closing, to such effect, signed by an authorized of-
ficer of the Trustee; and
(b) No order of any court or administrative
agency shall be in effect which restrains or prohibits
the transactions contemplated by this Agreement, and no
suit, action or other proceeding by any governmental
body or other person shall have been instituted which
questions the validity or legality of the transactions
contemplated by this Agreement.
ARTICLE VII
MISCELLANEOUS
7.1. Expenses. The Seller shall pay all of its
expenses, and it shall pay the Purchaser's expenses, in con-
nection with the authorization, preparation, execution and
performance of this Agreement, including without limitation
the reasonable fees and expenses of the Trustee, its agents,
representatives, counsel, financial advisors and consultants.
7.2. Survival of Seller's Representations and War-
ranties. All representations and warranties made by the
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Seller to the Purchaser in this Agreement shall survive the
Closing.
7.3. Notices. All notices, requests, or other
communications required or permitted to be delivered here-
under shall be in writing, delivered by registered or certi-
fied mail, return receipt requested, as follows:
(a) To the Seller:
000 Xxxxx Xxxxxx Xxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
(b) To the Purchaser:
Xxxx Xxxxxx Xxx 0000
Xxxxxxx Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx, III
Any party hereto may from time to time, by written notice
given as aforesaid, designate any other address to which no-
tices, requests or other communications addressed to it shall
be sent.
7.4. Specific Performance. The parties hereto ac-
knowledge that damages would be an inadequate remedy for any
breach of the provisions of this Agreement and agree that the
obligations of the parties hereunder shall be specifically
enforceable, and neither party will take any action to impede
the other from seeking to enforce such rights of specific
performance.
7.5. Successors and Assigns; Integration; Assign-
ment. This Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties hereto and their
respective legal representatives, successors and assigns.
This Agreement (a) constitutes, together with the Note, the
Trust Agreement and any other written agreements between the
Purchaser and the Seller executed and delivered on the date
hereof, the entire agreement between the parties hereto and
supersedes all other prior agreements and understandings,
both written and oral, among the parties, with respect to the
subject matter hereof, (b) shall not confer upon any person
other than the parties hereto any rights or remedies here-
under and (a) shall not be assignable by operation of law or
otherwise, except that the Trustee may assign all its rights
hereunder to any corporation or other institution exercising
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trust powers in connection with any such institution assuming
the duties of a trustee under the Trust.
7.6. Governing Law. This Agreement shall be gov-
erned by and construed in accordance with the laws of the
State of Delaware.
7.7. Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto agrees
to use all reasonable efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things neces-
sary, proper or advisable to consummate and make effective
the transactions contemplated by this Agreement.
7.8. Amendment and Waiver. No amendment or waiver
of any provision of this Agreement or consent to departure
therefrom shall be effective unless in writing and signed by
the Purchaser and the Seller.
7.9. Counterparts. This Agreement may be executed
in any number of counterparts with the same effect as if the
signatures thereto were upon one instrument.
7.10. Certain Limitations. The execution, deliv-
ery and performance by the Trustee of this Agreement have
been, and will be, effected by the Trustee solely in its ca-
pacity as Trustee under the terms of the Trust and not in its
individual or corporate capacity. Nothing in this Agreement
shall be interpreted to increase, decrease or modify in any
manner any liability of the Trustee to the Seller or to any
trustee, representative or other claimant by right of the
Seller resulting from the Trustee's performance of its duties
under the constituent instruments of the Trust, and no per-
xxxxx or corporate liability shall be asserted or enforceable
against the Trustee by reason of any of the covenants, state-
ments or representations contained in this Agreement.
7.11. Incorporation. The terms and conditions of
the Trust Agreement relating to the nature of the responsi-
bilities of the Trustee and the indemnification of the
Trustee by the Seller are incorporated herein by reference
and made applicable to this Agreement.
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IN WITNESS WHEREOF, the undersigned have duly exe-
cuted this Agreement on the date and year first above writ-
ten.
XXXXX XXXXXXXX CORPORATION
By: /s/ X.X. Xxxxxxx
Name: X.X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
WACHOVIA BANK OF NORTH CAROLINA N.A.
By: /s/ Xxxx X. Xxxxx III
Name: Xxxx X. Xxxxx, III
Title: Vice President
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Appendix I
PROMISSORY NOTE
$564,750,000 October 24, 0000
Xxxxxxxx, Xxxxxxxxxx
FOR VALUE RECEIVED, the undersigned, Wachovia Bank
of North Carolina N.A., not in its individual or corporate
capacity but solely in its capacity as Trustee of The Xxxxx
Xxxxxxxx Corporation Employee Stock Benefit Trust (the
"Trust") hereby promises on behalf of the Trust to pay to the
order of Xxxxx Xxxxxxxx Corporation, a Delaware corporation
(the "Company"), at the principal offices of the Company in
Pasadena, California, or at such other place as the Company
shall designate in writing, the aggregate principal amount of
FIVE HUNDRED AND SIXTY-FOUR MILLION SEVEN HUNDRED THOUSAND
DOLLARS ($564,750,000), as shown on Schedule A attached
hereto as such may be amended from time to time, with inter-
est in arrears thereon, as hereinafter provided.
Principal shall be paid in installments in the
amounts and on the dates set forth on the Maturity Schedule
attached hereto as Schedule A, the last such installment due
on January 1, 2011; provided, however, that this Note may be
prepaid in whole or in part at any time without penalty; and
provided further that the principal amount of this Note (1)
shall be forgiven in the event that the Trust shall have been
terminated in accordance with Section 8.2 thereof and the
Trustee shall have complied with the requirements of such
Section or (2) shall be deemed forgiven, if applicable, in
accordance with Section 2.1 of the Trust. Interest on the
unpaid principal balance, at an annual interest rate (the
"Interest Rate") equal to 8.0%, shall be paid quarterly, in
arrears, on each January 1, April 1, July 1 and October 1,
commencing January 1, 1997, and shall be calculated on the
basis of a 360-day year of 30-day months. Whenever any pay-
ment falls due on a Saturday, Sunday or public holiday, such
payment shall be made on the next succeeding business day.
This Note shall be construed under the laws of the
State of Delaware.
The undersigned represents and warrants that the
indebtedness represented by this Note was incurred for the
purpose of purchasing shares of Common Stock, $1.00 par
value, of the Company.
This Note may not be assigned by the Company, other
than by operation of law, without the prior express written
consent of the undersigned.
The Company shall have no recourse whatsoever to
any assets of the Trustee in its individual or corporate ca-
pacity for repayment. The Trustee is entering into this
Agreement not in its individual or corporate capacity but
solely as Trustee, and no personal or corporate liability or
personal or corporate responsibilities are assumed by, or
shall at any time be asserted or enforceable against, the
Trustee in its individual or corporate capacity under, or
with respect to, this Agreement.
WACHOVIA BANK OF NORTH CAROLINA N.A.,
on behalf of THE XXXXX XXXXXXXX COR-
PORATION EMPLOYEE STOCK BENEFIT TRUST
By:
Name:
Title:
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Schedule A
PRINCIPAL PAYMENT DATES
Date Amount
January 1, 1997 $ 26,892,860
January 1, 1998 $ 26,892,860
January 1, 1999 $ 26,892,860
January 1, 2000 $ 26,892,860
January 1, 2001 $ 26,892,860
January 1, 2002 $ 26,892,860
January 1, 2003 $ 26,892,860
January 1, 2004 $ 26,892,860
January 1, 2005 $ 26,892,860
January 1, 2006 $ 26,892,860
January 1, 2007 $ 26,892,860
January 1, 2008 $ 26,892,860
January 1, 2009 $ 26,892,860
January 1, 2010 $ 26,892,860
January 1, 2011 $188,249,960
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