EXHIBIT 4.5
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made and entered
into as of the 27th day of August, 2003, by and between The Xxxxxxx-Xxxxxxxx
Company, an Ohio corporation (the "Corporation"), and The Xxxxxxx-Xxxxxxxx
Company Employee Stock Purchase and Savings Plan (the "Buyer"), acting by and
through GreatBanc Trust Company, an Illinois corporation (the "Trustee"), not in
its individual capacity (except as expressly specified in Sections 5, 10 and 16
hereof), but solely in its capacity as a trustee of the employee stock ownership
plan feature of the Buyer.
RECITALS:
A. The Corporation desires to issue an aggregate of 350,000 shares of
Convertible Participating Serial Preferred Stock, without par value (the "ESOP
Shares"), to the Buyer pursuant to the terms and conditions of this Agreement.
B. The Buyer desires to purchase the ESOP Shares from the Corporation
subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the representations, warranties,
agreements, recitals and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Definitions. For purposes of this Agreement, the following terms
shall have the meanings described:
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Acquisition Debt" is initially equal to Three Hundred Fifty Million
Dollars ($350,000,000). Upon payment in full of the Purchase Money Note, the
Acquisition Debt shall be zero.
"Adjusted Common Stock Value" means 350,000 shares, multiplied by One
Thousand Dollars ($1,000), divided by the Common Stock Price on the Original
Issue Date (adjusted to take into account any dividends or distributions payable
in Common Stock, or any stock split, recapitalization (including extraordinary
dividends), reclassification, subdivision or combination of, or similar
transaction involving, Common Stock), multiplied by the Common Stock Price
(which shall never be less than the Floor Price nor greater than the Cap
Amount).
"Agreement" has the meaning set forth in the first paragraph hereof.
"Articles of Incorporation" means the Corporation's Amended Articles of
Incorporation, as the same may be amended from time to time.
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"Base Value" shall, as of any specified date, be equal to the greater
of (a) 38.0% of the cumulative amount of principal paid or forgiven on the
Purchase Money Note, or (b) Eighty-Five Million Dollars ($85,000,000).
"Business Day" means any day other than a Saturday, Sunday or a day on
which banking institutions are authorized or obligated by law or executive order
to close in New York City.
"Buyer" has the meaning set forth in the first paragraph hereof.
"Cap Amount" shall be (a) 150% of the Floor Price during the first five
years following the Original Issue Date, and (b) 175% of the Floor Price at any
time after the fifth anniversary date of the Original Issue Date.
"Closing" has the meaning set forth in Section 2(c).
"Closing Date" has the meaning set forth in Section 2(c).
"Closing Price" of any security on any date means the closing sale
price (or, if no closing sale price is reported, the last reported sale price)
of such security on the NYSE on such date, as reported in the NYSE Consolidated
Transaction Reporting System, or, if such security is not listed for trading on
the NYSE on that date, as reported in the consolidated transaction reporting
system for the principal United States securities exchange on which such
security is so listed, or, if such security is not so listed, as reported on the
National Association of Securities Dealers, Inc. Automated Quotation System, or,
if not so reported, the last quoted bid price for such security in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of such
security on such date as determined by a nationally recognized independent
investment banking firm retained for the purpose.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission promulgated
under the 1933 Act.
"Common Stock" means the common stock, $1.00 par value per share, of
the Corporation.
"Common Stock Price" means, on any specified date, the Closing Price of
Common Stock on the last Trading Day before such date. The Common Stock Price
shall be appropriately adjusted to take into account any dividends or
distributions payable in Common Stock.
"Conversion Amount Per Share" is equal to the ESOP Shares Value Per
Share.
"Conversion Date" means the date specified in Section 7(c)(i).
"Conversion Notice" means a notice described in Section 7(c)(i).
"Corporation" has the meaning set forth in the first paragraph hereof.
"Corporation Reports" has the meaning set forth in Section 3(f).
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"Determination Date" means (a) when used with respect to any dividend
or other distribution, the date fixed for the determination of the holders of
the securities entitled to receive such dividend or distribution, or, if a
dividend or distribution is paid or made without fixing such a date, the date of
such dividend or distribution and (b) when used with respect to any subdivision,
combination or reclassification of securities, the date upon which such
subdivision, combination or reclassification becomes effective.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESOP" means the employee stock ownership plan feature of the Plan and
any other employee stock ownership plan and trust that is designated by the
Corporation and that assumes or becomes a transferee or a successor by merger,
spin-off or split-up, of any of the assets and liabilities of such employee
stock ownership plan feature.
"ESOP Loan Suspense Account" means a suspense account maintained by the
ESOP pursuant to Treasury Regulation Section 54.4975-11(c) (1979).
"ESOP Shares" has the meaning set forth in the Recitals.
"ESOP Shares Value Per Share" is equal to a fraction. The numerator is
the sum of (a) the Adjusted Common Stock Value plus (b) the Base Value less (c)
the Acquisition Debt. The denominator is 350,000 shares. If the ESOP Shares
Value Per Share is being calculated on a date on which principal is being paid
on the Purchase Money Note, the Base Value shall be calculated including the
principal payment made on that date.
"Floor Price" means the Common Stock Price on the Original Issue Date.
"Material Adverse Effect" means a material adverse effect on the
financial condition or results of operation of the Corporation and its
Subsidiaries taken as a whole.
"Number of Unallocated ESOP Shares" means the number of shares of ESOP
Shares held in the ESOP Loan Suspense Account as of the given date.
"NYSE" means the New York Stock Exchange.
"Original Issue Date" means the date of original issuance of the ESOP
Shares.
"Per-Share Redemption Amount" means, as of any specified date, the
Conversion Amount Per Share.
"Plan" means The Xxxxxxx-Xxxxxxxx Company Employee Stock Purchase and
Savings Plan, and any other plan and trust qualified under Code Section 401(a)
that is designated by the Corporation and that assumes or becomes a transferee
or a successor by merger, spin-off or split-up, of substantially all of the
assets and liabilities of such plan.
"Purchase Money Loan Agreement" means the loan agreement between the
Corporation and the Trust, acting by and through the Trustee, in the form
attached hereto as Exhibit A.
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"Purchase Money Note" means the purchase money note issued on the
Closing Date, in the principal amount of Three Hundred Fifty Million Dollars
($350,000,000), made in favor of the Corporation pursuant to the Purchase Money
Loan Agreement.
"Purchase Money Pledge Agreement" means the pledge agreement between
the Corporation and the Trust, acting by and through the Trustee, entered into
on the Closing Date to secure the obligations of the Trust under the Purchase
Money Loan Agreement and the Purchase Money Note.
"Redemption Date" means the Business Day that is the effective date of
a redemption pursuant to Section 8.
"Redemption Notice" means the notice described in Section 8(b).
"Redemption Price" means the sum of: (a) the product of (i) the number
of whole and fractional shares of ESOP Shares redeemed, multiplied by (ii) the
Per-Share Redemption Amount; plus (b) any accumulated and unpaid dividends on
the shares of ESOP Shares.
"Related Agreements" mean the Purchase Money Loan Agreement, the
Purchase Money Note and the Purchase Money Pledge Agreement.
"Subsidiary" or "Subsidiaries" means a consolidated subsidiary of the
Corporation that falls within the meaning of Rule 405 of the rules and
regulations of the Commission promulgated under the 1933 Act.
"Trading Day" means, with respect to any security, (a) if the principal
trading market for the applicable security is the NYSE or another national
securities exchange, a day on which the NYSE or such other national securities
exchange is open for business, (b) if the principal trading market for the
applicable security is the Nasdaq, a day on which a trade may be made on the
Nasdaq National Market, or (c) if the applicable security is not listed,
admitted for trading or quoted as provided in clause (a) or (b), any Business
Day. Any day for which there is no reported sales of Common Stock on the
applicable exchange or market shall not be treated as a Trading Day.
"Trustee" has the meaning set forth in the first paragraph hereof.
2. Closing.
(a) Purchase and Sale of ESOP Shares. Subject to the terms and
conditions of this Agreement, the Corporation shall sell to the Buyer, and the
Buyer shall purchase from the Corporation, 350,000 shares of ESOP Shares, at an
issue price of One Thousand Dollars ($1,000) per share, for an aggregate price
of Three Hundred Fifty Million Dollars ($350,000,000).
(b) Financing Arrangements. The Corporation hereby agrees to lend to
the Buyer, and the Buyer hereby agrees to borrow from the Corporation, Three
Hundred Fifty Million Dollars ($350,000,000) upon the terms and conditions set
forth in the Purchase Money Loan Agreement.
(c) The Closing. The transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of the Corporation at 000 Xxxxxxxx
Xxxxxx, X.X., Xxxxxxxxx, Xxxx on
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August 27, 2003, or at such other place or date as the parties may mutually
agree (the "Closing Date").
3. Representations and Warranties of Corporation. As of the Closing
Date, the Corporation hereby represents and warrants to the Buyer as follows:
(a) The Corporation and its Subsidiaries. The Corporation and each of
its Subsidiaries have been duly organized and are validly existing as
corporations (or limited liability companies) in good standing under the laws of
their respective jurisdictions of incorporation, are duly qualified to do
business and are in good standing as foreign corporations (or limited liability
companies) in each jurisdiction in which the conduct of their respective
businesses requires such qualification and in which the failure to so qualify
would have a Material Adverse Effect, and have all power and authority necessary
to conduct the businesses in which they are engaged.
(b) Authorization and Effect. This Agreement has been duly authorized,
executed and delivered by the Corporation and (assuming the due execution and
delivery thereof by the Buyer) constitutes the valid and legally binding
obligation of the Corporation, enforceable in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(c) No Conflicts. The execution, delivery and performance of this
Agreement by the Corporation and the consummation of the transactions
contemplated by this Agreement (i) will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other material
agreement or material instrument to which the Corporation or any of its
Subsidiaries is a party or by which the Corporation or any of its Subsidiaries
is bound, (ii) will not result in any violation of any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Corporation or any of its Subsidiaries, except for such
violations that would not result in a Material Adverse Effect, and (iii) will
not result in any violation of the provisions of the charter or by-laws (or
other organizational documents) of the Corporation or any of its Subsidiaries.
Except as otherwise provided herein, no consent, approval, authorization or
order of, or filing or registration with, any governmental agency or body is
required for the execution, delivery and performance of this Agreement by the
Corporation and the consummation of the transactions contemplated hereby.
(d) Capitalization. All of the issued shares of Common Stock have been
duly and validly authorized and issued and are fully paid and nonassessable. All
of the issued shares of capital stock of each subsidiary have been duly and
validly authorized and issued and are fully paid, nonassessable and are owned
directly or indirectly by the Corporation, free and clear of all liens,
encumbrances, equities or claims, except for any liens, encumbrances, equities
or claims that would not, in the aggregate, have a Material Averse Effect.
(e) ESOP Shares. The ESOP Shares have been duly authorized, and, upon
issuance and delivery against receipt by the Corporation of the Purchase Money
Note, will be validly issued and outstanding. The issuance and sale of the ESOP
Shares is not subject to any preemptive or other
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similar rights arising by operation of law, under the charter or regulations of
the Corporation, under any agreement or instrument to which the Corporation or
any of its subsidiaries is a party or otherwise. The ESOP Shares constitute
"employer securities" within the meaning of Code Section 409(l) and "qualifying
employer securities" within the meaning of ERISA Section 407(d)(5).
(f) Corporation Reports. Since January 1, 2000, the Corporation has
timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the Commission pursuant to the reporting
requirements of Section 13 of the 1934 Act, and the applicable rules and
regulations of the Commission thereunder. All of the foregoing reports filed
prior to the date hereof are hereinafter referred to as the "Corporation
Reports". As of their respective dates, the Corporation Reports complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission promulgated thereunder applicable to such
Corporation Reports.
(g) Financial Statements. The financial statements (including the
related notes and supporting schedules) filed as part of the Corporation Reports
present fairly in all material respects the financial condition and results of
operations of the entities purported to be shown thereby, at the dates and for
the periods indicated, and (except to the extent, if any, otherwise disclosed
therein) have been prepared in conformity with generally accepted accounting
principles.
(h) Material Adverse Effect. Except as otherwise disclosed in the
Corporation Reports, neither the Corporation nor any of its Subsidiaries has
sustained, since the date of the latest audited financial statements included in
the Corporation Reports, any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, which has
had a Material Adverse Effect.
(i) Litigation. Except as described in the Corporation Reports, to the
knowledge of the Corporation, there are no legal or governmental proceedings
pending to which the Corporation or any of its Subsidiaries is a party which
would have a Material Adverse Effect; and to the knowledge of the Corporation,
no such proceedings are threatened by governmental authorities or by others.
(j) No Violation. Neither the Corporation nor any of its Subsidiaries
(i) is in violation of its charter or by-laws (or other organizational
documents), (ii) to the knowledge of the Corporation, is in default in any
material respect, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement or other material agreement or material instrument to
which it is a party or by which it is bound or (iii) to the knowledge of the
Corporation, is in violation of any law, ordinance, governmental rule,
regulation or court decree to which it may be subject or has failed to obtain
any license, permit, certificate, franchise or other governmental authorization
or permit necessary to the conduct of its business except, in the case of
clauses (ii) and (iii), for those defaults, violations or failures which, either
individually or in the aggregate, would not have a Material Adverse Effect.
(k) Tax Shelter. The execution, delivery and performance of this
Agreement by the Corporation and the consummation of the transactions
contemplated hereunder will not create a Potentially Abusive Tax Shelter as
defined in 26 C.F.R. ss. 301.6112-1.
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(l) Statement of Position 93-6. The ESOP Shares have been accounted for
in accordance with Statement of Position 93-6.
(m) The Buyer. The Buyer has been duly organized and established by all
necessary corporate action on the part of the Corporation. The Buyer includes a
legal and valid employee stock ownership plan within the meaning of Code Section
4975(e)(7) and ERISA Section 407(d)(6), and constitutes a qualified trust under
Code Section 401(a) which is exempt from taxation under Code Section 501(a). The
Corporation has received a favorable determination letter, dated October 16,
2002, from the Internal Revenue Service that confirms the status of the Buyer
under the Code.
4. Representations and Warranties of the Buyer. As of the Closing Date,
the Buyer hereby represents and warrants to the Corporation as follows:
(a) Power of the Buyer. The Buyer has the power, authority and legal
right to execute and deliver this Agreement and the other agreements and
instruments for which provision is made herein to be executed and delivered by
the Buyer and to perform its obligations under this Agreement and the other
agreements and instruments to which the Buyer will be a party.
(b) Authorization and Effect. This Agreement has been duly authorized,
executed and delivered by the Buyer and (assuming the due execution and delivery
thereof by the Corporation) constitutes the valid and legally binding obligation
of the Buyer, enforceable in accordance with its terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
(c) No Conflicts. The execution, delivery and performance of this
Agreement by the Buyer and the consummation of the transactions contemplated by
this Agreement (i) will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other material agreement or material
instrument to which the Buyer is a party or by which the Buyer is bound, (ii)
will not result in any violation of any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the Buyer
(other than with respect to any such violation related to the prohibited
transaction provisions of ERISA, for which the Corporation acknowledges and
agrees that Buyer shall make no representation or warranty hereunder related to
such prohibited transaction provisions), and (iii) will not result in any
violation of the provisions of the organizational documents of the Buyer.
(d) Brokers. The Buyer has not, directly or indirectly, in connection
with this Agreement or the transactions contemplated hereby (i) employed any
broker, finder or agent or (ii) agreed to pay or incurred any obligation to pay
any broker's or finder's fee, any commission or any other similar form of
compensation.
(e) Investment Intent. The Buyer acknowledges that it is aware that the
ESOP Shares have not been registered under the 1933 Act and that, other than as
set forth in the Registration
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Rights Agreement, the Corporation has no obligation to register or cause the
registration of the sale of such shares by the Buyer under the 1933 Act. Except
as otherwise required by ERISA, the Buyer is acquiring the ESOP Shares for
investment and not with a view to, or for sale in connection with, any
distribution thereof.
5. Representations and Warranties of the Trustee. As of the Closing
Date, the Trustee, in its individual capacity, hereby represents and warrants to
the Corporation and the Buyer as follows:
(a) Power of the Trustee. The Trustee is duly organized and validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation (or organization) and has full authority to act as trustee of the
employee stock ownership features of the Buyer and exercise trust powers.
(b) No Conflicts. The execution, delivery and performance of this
Agreement by the Trustee, in its capacity as trustee of the employee stock
ownership plan feature of the Buyer, and the consummation of the transactions
contemplated by this Agreement (i) will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other material
agreement or material instrument to which the Trustee is a party or by which the
Trustee is bound, (ii) will not result in any violation of any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Trustee (other than with respect to any such violation
related to the prohibited transaction provisions of ERISA, for which the
Corporation and Buyer acknowledge and agree that the Trustee shall make no
representation or warranty hereunder related to such prohibited transaction
provisions), and (iii) will not result in any violation of the provisions of the
charter or by-laws of the Trustee.
(c) Knowledge and Experience. The Trustee has such knowledge and
experience in financial and business matters in general and in investments in
particular so as to be capable of evaluating the merits and risks of the
proposed investment, and the Trustee has retained independent counsel and an
independent financial adviser in connection with the transactions contemplated
by this Agreement.
6. Issuance and Transfer Restrictions.
Shares of ESOP Shares shall be issued and sold by the Corporation to
the Buyer to be held in the ESOP Loan Suspense Account. Shares of ESOP Shares
shall be uncertificated shares. Transfers of shares of ESOP Shares may only be
effected by applicable entry or entries in the stock transfer books of the
Corporation.
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7. Conversion.
(a) Conversion Right. All or any portion of the outstanding shares of
ESOP Shares held in the ESOP Loan Suspense Account shall be convertible, at the
option of the Trustee, at any time and from time to time and without the payment
of additional consideration by the Trustee, into such number of shares of Common
Stock as is determined under the following conversion formula. Each share of
ESOP Shares will be converted into a number of shares of Common Stock equal to
(i) the Conversion Amount Per Share divided by (ii) the Common Stock Price.
(b) Alternative Conversion Right. All, but not less than all, of the
outstanding shares of ESOP Shares held in the ESOP Loan Suspense Account shall
be convertible, at the option of the Trustee, at any time and from time to time,
and without payment of additional consideration by the Trustee, into such number
of shares of Common Stock as is determined under the following conversion
formula. Each share of ESOP Shares will be converted into a number of shares of
Common Stock equal to (i) the Adjusted Common Stock Value divided by (ii)
350,000 shares divided by (iii) the Common Stock Price. In the event the ESOP
Shares are converted pursuant to the Alternative Conversion Right set forth in
this Section 7(b), the entire unpaid principal balance and any and all interest
accrued on such unpaid principal balance owing under the Purchase Money Note
shall immediately become due and payable.
(c) Conversion Procedures.
(i) In order to convert shares of ESOP Shares into shares of
Common Stock pursuant to this Section 7, the Trustee shall deliver to the
Corporation at its principal executive offices or another place designated by
the Corporation in a written notice sent to the Trustee, a Conversion Notice, in
form satisfactory to the Corporation, duly executed by the Trustee. Each
Conversion Notice shall specify (1) the number of shares of ESOP Shares to be
converted and (2) whether the ESOP Shares are being converted pursuant to the
Conversion Right set forth in Section 7(a) or the Alternative Conversion Right
set forth in Section 7(b). In the event the ESOP Shares are converted pursuant
to this Section 7, the Corporation shall deliver Common Stock which is readily
tradable on an established securities market (A) as soon as practicable after
receipt of the Conversion Notice, if such Conversion Notice is received prior to
the effectiveness of any registration statement filed with the Commission
regarding the registration of such Common Stock, or (B) as soon as reasonably
practicable, but not later than five (5) Business Days, after receipt of the
Conversion Notice, if such Conversion Notice is received after the effectiveness
of any registration statement filed with the Commission regarding the
registration of such Common Stock. Any conversion pursuant to this Section 7
shall be deemed to have been effected at the close of business on the Business
Day on which the Conversion Notice has been received by the Corporation (a
"Conversion Date").
(ii) The Corporation shall, as soon as practicable after the
Conversion Date, cause to be issued and delivered to the person specified in the
Conversion Notice a certificate or certificates evidencing the number of full
shares of Common Stock to which such person shall be entitled, together with a
cash payment in respect of any fractional shares of Common Stock otherwise
issuable. The person or persons entitled to receive the shares of Common Stock
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deliverable upon conversion of such shares of ESOP Shares shall be treated for
all purposes as the record holder or holders of such shares of Common Stock on
the relevant Conversion Date, unless the stock transfer books of the Corporation
shall be closed on such Conversion Date, in which event such person or persons
shall be deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which such stock transfer books are open.
(d) Fractional Shares. No fractional shares or scrip representing
fractional shares of Common Stock shall be issued upon conversion of any shares
of ESOP Shares. If more than one share of ESOP Shares shall be surrendered for
conversion at one time by the same record holder, the number of full shares of
Common Stock issuable upon conversion thereof shall be computed on the basis of
the aggregate number of shares of ESOP Shares which are converted. In lieu of
any fractional share of Common Stock that would otherwise be issuable upon
conversion of any shares of ESOP Shares, the Corporation shall pay a cash
adjustment in respect of such fractional share in lieu thereof, calculated to
the nearer cent, with one-half cent or more rounded upward.
(e) Reservation and Authorization of Shares. The Corporation shall at
all times when the ESOP Shares shall be outstanding, reserve and keep available
out of its authorized but unissued Common Stock or treasury shares of Common
Stock, for the purpose of effecting the conversion of the ESOP Shares, such
number of its duly authorized shares of Common Stock as shall from time to time
be sufficient to effect the conversion of all outstanding shares of ESOP Shares.
(f) Converted Shares. After the Conversion Date with respect to any
shares of ESOP Shares, such shares shall no longer be deemed to be outstanding
and all rights with respect to such shares, including but not limited to the
rights, if any, to receive notices or distributions and to vote, shall
immediately cease and terminate on the Conversion Date, except only the right of
the holders thereof to receive shares of Common Stock (and cash in lieu of
fractional shares) in exchange therefor.
8. Redemption.
(a) Redemption Right and Shares Released from the ESOP Loan Suspense
Account. All or any portion (including fractions of a share) of the outstanding
shares of Convertible Participating Preferred Stock shall be redeemable, at the
option of the Trustee at any time and from time to time. In addition, all or any
portion (including fractions of a share) of Convertible Participating Preferred
Stock shall be redeemed without notice as and when such shares are released from
the ESOP Loan Suspense Account, unless the Trustee exercises its conversion
rights with respect to such shares by delivering a Conversion Notice to the
Corporation prior to such release. The amount paid by the Corporation for shares
so redeemed shall be equal to the Redemption Price.
(b) Notice of Redemption. In the event of a redemption pursuant to the
first sentence of Section 8(a), the Trustee shall give notice (a "Redemption
Notice") to the Corporation. Each Redemption Notice shall specify (i) the
Redemption Date (which may be the date the Redemption Notice is given), (ii) the
number of shares of ESOP Shares to be redeemed or the aggregate Redemption Price
for all shares of ESOP Shares to be redeemed as of the applicable Redemption
Date, (iii) the place or places for payment of the Redemption Price, (iv) that
payment will be made upon surrender of shares of ESOP Shares, and (v) that the
right of holders to convert such redeemed
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ESOP Shares shall terminate at the close of business on the Redemption Date
(unless the Corporation defaults in the payment of the Redemption Price). In the
event of a redemption pursuant to the second sentence of Section 8(a), the
Trustee is not required to provide a Redemption Notice to the Corporation and
the Redemption Date shall be the date on which the shares of the Convertible
Participating Preferred Stock are released from the ESOP Loan Suspense Account.
(c) Redemption Procedures. On the Redemption Date, the Trustee shall
surrender the shares of ESOP Shares to the Corporation and shall thereupon be
entitled to receive payment of the applicable Redemption Price for each such
share. If a Redemption Notice shall have been given, as aforesaid, and if, on
the Redemption Date, assets necessary for the redemption shall be legally
available therefor and shall have been irrevocably deposited, set aside for or
paid (including, payment in the form of debt forgiveness) to the Plan, then,
notwithstanding that the redeemed shares of ESOP Shares shall not have been
surrendered, (i) such shares shall no longer be deemed outstanding, (ii) the
Trustee shall cease to be a stockholder of the Corporation to the extent of its
interest in such shares, and (iii) all rights whatsoever with respect to such
shares of ESOP Shares shall terminate, except the right to receive the
Redemption Price for each such share, without interest or any sum of money in
lieu of interest thereon. Redemptions of ESOP Shares shall be effected as of the
close of business on the Redemption Date before effecting any conversion for
which the Conversion Date corresponds with the Redemption Date.
(d) No Sinking Fund. The shares of ESOP Shares shall not be subject to
the operation of any retirement or sinking fund.
(e) Redeemed Shares. After the Redemption Date with respect to any
shares of ESOP Shares, such shares shall no longer be deemed to be outstanding
and all rights with respect to such shares, including but not limited to the
rights, if any, to receive notices or distributions and to vote, shall
immediately cease and terminate on the Redemption Date, except only the right of
the holders thereof to receive the Redemption Price therefor, without interest
or any sum of money in lieu of interest thereon. Any shares of ESOP Shares
redeemed pursuant to this Section 8 shall be retired and canceled after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Serial Preferred Stock and may be reissued as
part of a new series of Serial Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions set forth herein.
(f) Payment of Redemption Price. The Corporation, at its option, may
make payment of the Redemption Price (i) in cash, (ii) in shares of Common Stock
which are readily tradable on an established securities market, or (iii) in any
combination of any of the foregoing. For purposes of determining the number of
shares of Common Stock to be delivered by the Corporation in satisfaction, in
whole or in part, of any Redemption Price, shares of Common Stock shall be
valued at the Common Stock Price as of the Redemption Date.
11
9. Covenants of the Corporation.
(a) Status of Buyer. The Corporation will use its reasonable best
efforts to cause the Buyer to maintain its qualifications as an employee stock
ownership plan within the meaning of Code Section 4975(e)(7) and ERISA Section
407(d)(6) and as a qualified trust under Code Section 401(a) which is exempt
from taxation under Code Section 501(a).
(b) Contributions. Subject to Code Sections 404 and 415, the
Corporation will make contributions to the ESOP which, together with dividends
on the ESOP Shares, are in amounts sufficient to enable the ESOP to timely
amortize the indebtedness created under the Purchase Money Loan Agreement.
10. Survival of Covenants and Representations and Warranties. All
covenants contained in this Agreement shall survive the Closing or the earlier
termination of this Agreement. Notwithstanding the Closing or sooner termination
of this Agreement or any investigation at any time made by or on behalf of any
of the parties, the Corporation and the Buyer shall be liable for damages solely
arising from any of their respective breaches of representations or warranties
set forth in Sections 3 and 4 of this Agreement (including in any certificates
delivered hereunder) which breaches shall not be considered waived by
consummation of the transactions contemplated hereby, provided that, except with
respect to breaches of the representations and warranties contained in Section
3(e) of this Agreement to which no limitations apply, such parties shall be
liable for any such breach only to the extent that notice of such breach is
asserted in writing and delivered to the breaching party prior to the one year
anniversary of the Closing Date. The Trustee shall be liable for damages arising
solely from and in respect of its breaches of representations or warranties set
forth in Section 5 of this Agreement, which breaches shall not be considered
waived by consummation of the transactions contemplated hereby, provided,
however, that the Trustee shall have no liability hereunder respecting breaches
of such representations and warranties if the Trustee followed generally
accepted industry practices and procedures and relied upon reasoned opinions
from its financial advisor and legal counsel in making such representations and
warranties.
11. Conditions to Closing; Obligation of the Buyer. The obligation of
the Buyer to proceed with the Closing is subject to the satisfaction on or prior
to the Closing Date of all the following conditions, any one or more of which
may be waived, in whole or in part, by the Buyer:
(a) The Corporation shall have complied in all material respects with
its covenants and agreements contained herein.
(b) The Buyer shall have received the following documents, in each case
in form and substance reasonably satisfactory to the Buyer:
(i) Copies of the Purchase Money Loan Agreement, Purchase
Money Note and Purchase Money Pledge Agreement, each dated as of the
Closing Date and executed and delivered by the Corporation and the
other parties thereto.
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(ii) A copy of the Registration Rights Agreement between the
Corporation and the Buyer, dated as of the Closing Date and in the form
of Exhibit B, executed and delivered by the Corporation.
(iii) A certificate, signed by the secretary or an assistant
secretary of the Corporation, (A) to the effect that an Amendment to
the Amended Articles of Incorporation of Corporation as to the ESOP
Shares in the form of Exhibit C has been filed with the Secretary of
State of the State of Ohio, (B) as to the Amended Articles of
Incorporation and Regulations of the Corporation and resolutions of the
Corporation's board of directors relating to the transactions
contemplated by this Agreement; and (C) as to the names, offices and
signatures of officers of the Corporation who execute any documents in
connection with the transactions contemplated by this Agreement.
(iv) An officer's certificate, signed by the president or the
chief financial officer of the Corporation, which certifies that the
conditions specified in Section 11(a) and applicable to the Corporation
have been satisfied.
(v) The Corporation's Legal Department, as counsel to the
Corporation, shall have furnished to the Buyer a written opinion signed
on behalf of the Legal Department by the Corporation's general counsel,
subject to customary additional qualifications, assumptions and
exclusions, in form and substance reasonably satisfactory to the Buyer
to the effect that:
(A) The Corporation and each of its subsidiaries have
been duly organized and are validly existing as corporations
(or limited liability companies) in good standing under the
laws of their respective jurisdictions of incorporation and
have all power and authority necessary to conduct the
businesses in which they are engaged as described in the
Corporation Reports except, in each case, where the failure to
so qualify would not result in a Material Adverse Effect.
(B) All of the issued shares of Common Stock of the
Corporation have been duly and validly authorized and issued
and are fully paid and nonassessable. All of the issued shares
of capital stock of each subsidiary have been duly and validly
authorized and issued and are fully paid, nonassessable and
are owned directly or indirectly by the Corporation, free and
clear of all liens, encumbrances, equities or claims, except
for any liens, encumbrances, equities or claims that would
not, in the aggregate, have a Material Adverse Effect.
(C) This Agreement has been duly authorized, executed
and delivered by the Corporation and (assuming the due
execution and delivery thereof by the Buyer) constitutes the
valid and legally binding obligation of the Corporation,
enforceable in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.
Each of the Related Agreements has been duly authorized by the
13
Corporation and, when executed and delivered by the
Corporation (assuming the due execution and delivery thereof
by the Buyer), will constitute the valid and legally binding
obligation of the Corporation, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing. The Corporation has requisite
power and authority to execute this Agreement and perform the
obligations thereunder.
(D) The ESOP Shares have been duly authorized, and,
upon issuance and delivery against receipt by the Corporation
of the Purchase Money Note, will be validly issued and
outstanding. The ESOP Shares rank, with respect to the
distribution of assets upon liquidation, dissolution and
winding up of the Corporation, senior to the Common Stock, for
the payment of One Thousand Dollars ($1,000) per share plus
accrued and unpaid dividends.
(vi) The Corporation's Tax Department, as tax counsel to the
Corporation, shall have furnished to the Buyer a written opinion signed
on behalf of the Tax Department by the Corporation's vice
president-taxes, subject to customary additional qualifications,
assumptions and exclusions, in form and substance reasonably
satisfactory to the Buyer to the effect that ESOP Shares constitute
"employer securities" within the meaning of Code Section 409(l) and
"qualifying employer securities" within the meaning of ERISA Section
407(d)(5).
(c) In the reasonable judgment of the Buyer, (i) there shall have been
no material adverse change affecting the basis for the Buyer's preliminary
determination to proceed with the purchase of the ESOP Shares from the
Corporation and the transactions contemplated by this Agreement and (ii) the
Buyer's purchase of the ESOP Shares and the transactions contemplated by this
Agreement will not result in (A) a prohibited transaction under Code Section
4975 or ERISA Section 406, which is not exempt pursuant to Code Section 4975 or
ERISA Section 408 or (B) a violation of ERISA.
(d) No litigation shall be pending or threatened which seeks to
restrain or prohibit the consummation of the transactions contemplated by this
Agreement or which, in the reasonable judgment of the Buyer, could result in
substantial financial liability to the Buyer.
(e) No order, injunction or decree shall have been entered by any
governmental authority which prohibits, restricts or delays consummation of the
transactions contemplated by this Agreement or the right of the Buyer to
consummate such transactions.
12. Conditions to Closing; Obligation of the Corporation. The
obligation of the Corporation to proceed with the Closing is subject to the
satisfaction on or prior to the Closing Date of all the following conditions,
any one or more of which may be waived, in whole or in part, by the Corporation:
14
(a) The Corporation shall have received the following documents, in
each case in form and substance reasonably satisfactory to the Corporation:
(i) Copies of the Purchase Money Loan Agreement, Purchase
Money Note and Purchase Money Pledge Agreement, each dated as of the
Closing Date and executed and delivered by the Buyer and the other
parties thereto.
(ii) A certificate, signed by an authorized officer of the
Trustee, and in a form satisfactory to the Corporation, to the effect
that:
(A) The Trustee has conducted a diligent review of
the transactions contemplated by this Agreement.
(B) In the reasonable judgment of the Trustee, the
Buyer's purchase of the ESOP Shares and the transactions
contemplated by this Agreement will not result in (I) a
prohibited transaction under Code Section 4975 or ERISA
Section 406, which is not exempt pursuant to Code Section 4975
or ERISA Section 408, respectively (a "non-exempt prohibited
transaction"), or (II) a violation of ERISA.
(iii) Xxxxxxxxxxx & Xxxxxxxx LLP, as counsel to the Trustee,
shall have furnished to the Corporation a written opinion, subject to
customary qualifications, assumptions and exclusions, in form and
substance reasonably satisfactory to the Corporation to the effect
that:
(A) The Trustee is a duly organized and validly
existing corporation in good standing under the laws of its
jurisdiction of incorporation (or organization) and has all
power and authority necessary to serve as a trustee (as
defined in ERISA Section 402(a)(2)) for the Buyer.
(B) This Agreement has been duly authorized, executed
and delivered by the Buyer and (assuming the due execution and
delivery thereof by the Corporation) constitutes the valid and
legally binding obligation of the Corporation, enforceable in
accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing. Each of
the Related Agreements has been duly authorized by the Trustee
on behalf of the Buyer and, when executed and delivered by the
Buyer (assuming the due execution and delivery thereof by the
Corporation) will constitute the valid and legally binding
obligation of the Buyer, enforceable in accordance with its
terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar
laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of
good faith and fair dealing). The Trustee has requisite power
and authority to execute this Agreement and the Related
Agreements on behalf of the Buyer and perform the obligations
thereunder.
15
(b) No litigation shall be pending or threatened which seeks to
restrain or prohibit the consummation of the transactions contemplated by this
Agreement or which, in the reasonable judgment of the Corporation, could result
in substantial financial liability to the Corporation.
(c) No order, injunction or decree shall have been entered by any
governmental authority which prohibits, restricts or delays consummation of the
transactions contemplated by this Agreement or the right of the Corporation to
consummate such transactions.
13. Validity of ESOP Shares. If a court of competent jurisdiction shall
finally determine that a final sale and purchase of the ESOP Shares has not been
consummated on the Closing Date as a result of the ESOP Shares not being fully
paid and nonassessable immediately following the consummation of the transaction
and which results in the Buyer not being entitled to all of the rights,
privileges and benefits of the ESOP Shares set forth in the Corporation's
Amended Articles of Incorporation, then the Buyer shall deliver to the
Corporation that number of ESOP Shares then held by the Buyer with an aggregate
value up to and equal to the aggregate amount, including principal and interest,
outstanding under the Purchase Money Note and the Purchase Money Note shall be
cancelled and no further obligations shall thereafter become due and payable
under the Purchase Money Note.
14. Notices. Any notice required or permitted by or in connection with
this Agreement shall be in writing and shall be made by facsimile, or by hand
delivery, or by overnight delivery service, or by certified mail, return receipt
requested, postage prepaid, addressed to the parties at the appropriate address
set forth below or to such other address as may be hereafter specified by
written notice by the parties to each other. Notice shall be considered given as
of the earlier of the date of actual receipt, or the date of the facsimile or
hand delivery, one (1) calendar day after delivery to an overnight delivery
service, or three (3) calendar days after the date of mailing, independent of
the date of actual delivery or whether delivery is ever in fact made, as the
case may be, provided the giver of notice can establish that notice was given as
provided herein. Notwithstanding the aforesaid procedures, any written notice
upon any party, in fact received by such party, shall be sufficient notice as of
the date so received.
(a) In the case of the Buyer, to:
The Xxxxxxx-Xxxxxxxx Company Employee
Stock Purchase and Savings Plan
c/o GreatBanc Trust Company
00 Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile No.: 000-000-0000
Attn: Xx. Xxxxxxx X. Xxxxxxx, Xx.
Senior Vice President
16
With a copy to:
The Xxxxxxx-Xxxxxxxx Company
000 Xxxxxxxx Xxxxxx, X.X.
Xxxxxxxxx, Xxxx 00000
Facsimile No. 000-000-0000
Attn: Vice President - Human Resources
(b) In the case of the Corporation to:
The Xxxxxxx-Xxxxxxxx Company
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Facsimile No.: 000-000-0000
Attn: Vice President and Treasurer
With a copy to:
The Xxxxxxx-Xxxxxxxx Company
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Facsimile No.: 000-000-0000
Attn: Vice President, General Counsel and Secretary
(c) In the case of the Trustee to:
GreatBanc Trust Company
00 Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile No.: 000-000-0000
Attn: Xx. Xxxxxxx X. Xxxxxxx, Xx.
Senior Vice President
With a copy to:
Xxxxxxxxxxx & Xxxxxxxx, LLP
Xxxxx X. Xxxxxx Building
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: 412-355-6501
Attn: Xx. Xxxxxxx X. Xxxxx
15. Further Assurances. The Buyer shall execute and deliver to the
Corporation such further assurances of this Agreement and the matters
contemplated by this Agreement and the Related Agreements promptly from time to
time upon the Corporation's written request.
17
16. Public Announcements and Releases. Except to the extent required by
applicable law, no disclosure or public announcement of (a) this Agreement, the
other agreements and instruments to be executed in connection herewith, any of
the provisions hereof or thereof, or any of the transactions contemplated hereby
or thereby, or (b) any confidential information concerning the Corporation or
the Buyer, shall be made by the Buyer or the Trustee. Notwithstanding the
foregoing, the parties (and each employee, representative or other agent of any
party) may disclose to any and all persons, without limitation of any kind, the
tax treatment and tax structure of the transaction contemplated by this
Agreement and all materials of any kind (including opinions and other tax
analyses) that may have been provided to such disclosing party relating to such
tax treatment and tax structure.
17. Governing Law. This Agreement and the Related Agreements and the
rights and obligations of the parties hereunder and thereunder shall be governed
by and construed and interpreted in accordance with the laws of the State of
Ohio, including all matters of construction, validity and performance,
regardless of the location of the parties or any Property.
18. Jurisdiction; Venue; Service. The Buyer irrevocably consents to the
non-exclusive personal jurisdiction of the courts of the State of Ohio and, if a
basis for federal jurisdiction exists, the non-exclusive jurisdiction of the
United States District Court for the Northern District of Ohio. The Buyer agrees
that venue shall be proper in any common pleas court of the State of Ohio
selected by the Corporation or, if a basis for federal jurisdiction exists, in
any Division of the United States District Court for the Northern District of
Ohio. The Buyer waives any right to object to the maintenance of any suit or
claim in any of the state or federal courts of the State of Ohio on the basis of
improper venue or of inconvenience of forum.
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19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall constitute one and the same instrument. It shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
20. Headings; Gender; References. The headings, subheadings and
captions in this Agreement and in any appendix, exhibit or schedule hereto are
for reference purposes only and are not intended to affect the meaning or
interpretation of this Agreement. For purposes of this Agreement, the use of
masculine pronouns shall be deemed to include feminine and neuter pronouns, as
appropriate. References in this Agreement to sections, subsections, schedules or
exhibits are to sections, subsections, schedules or exhibits in or to this
Agreement unless otherwise stated.
21. Exhibits. The exhibits attached hereto are hereby made a part of
this Agreement as if set forth in full herein.
22. Entire Agreement; Amendments, etc. This Agreement, along with that
certain Retention Letter between the Trustee and the Corporation, dated April
30, 2003 and accepted by the Corporation on May 2, 2003, and that certain
Indemnification Agreement between the Trustee and the Corporation, dated April
30, 2003, contains the entire agreement between the parties hereto with respect
to their subject matter and supersedes all prior negotiations, discussions,
agreements, arrangements and understandings, written or oral, relating to the
subject matter of this Agreement. No amendment or modification of, or any waiver
of any provision of, this Agreement shall be effective against a party unless
set forth in a writing signed by such party.
23. Successors and Assigns; Assignment; No Third Party Beneficiaries.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. No party shall assign any of
its rights or obligations hereunder without the prior written consent of the
other parties. This Agreement is not intended to, and shall not be construed to,
create any rights as a third-party beneficiary or otherwise in favor of any
person or entity who is not a party to this Agreement.
19
24. Severability. Any provision of this Agreement prohibited by the
laws of any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition, or modified to conform with such laws, without
invalidating the remaining provisions of this Agreement, and any such
prohibition in any jurisdiction shall not invalidate such provisions in any
other jurisdiction.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed and delivered as of the day and year first above written.
"Corporation" THE XXXXXXX-XXXXXXXX COMPANY
By: /S/
--------------------------------------
Xxxxxxx X. Xxxxxx
Vice President and Treasurer
"Buyer" THE XXXXXXX-XXXXXXXX COMPANY
EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
By: GreatBanc Trust Company, not in its
individual capacity, but solely in its
capacity as trustee of the employee
stock ownership plan feature of The
Xxxxxxx-Xxxxxxxx Company Employee
Stock Purchase and Savings Plan
By: /S/
----------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
Senior Vice President
"Trustee " GreatBanc Trust Company, in its individual
capacity, but only as to Sections 5, 10
and 16 hereof
By: /S/
--------------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
Senior Vice President
20
