EXHIBIT 10n
STOCK PURCHASE AGREEMENT
THIS AGREEMENT, dated October 20, 1994, is between
DETECTION SYSTEMS, INC. ("Company"), a New York corporation,
and the "Shareholder" who has signed below [Xxxx X. Xxxxxxxxx].
The Shareholder is an executive officer and director of
the Company and owns a substantial block of the issued and
outstanding shares of its Common Stock, par value $0.05 per
share ("Shares").
Believing it in their mutual best interests to provide for
the purchase and sale of some of the Shares owned by the
Shareholder upon his death, the parties hereby agree as
follows:
1. Death of Shareholder
(a) Option on Death. Upon the death of the Shareholder,
his estate shall have the option to sell Shares to the Company
pursuant to the terms of this Agreement. This option may be
exercised by the executor or administrator of his estate at any
time within twelve months of the date of death (or, if later,
three months of the date of the executor's or administrator's
appointment) by giving written notice of exercise to the
Company personally or by registered or certified mail, postage
prepaid. The option may be exercised with respect to any
number of the Shares owned by the Shareholder at his death, up
to the maximum number calculated as provided in Subsection 1(c)
below. The purchase price for the Shares shall be as provided
in Section 2 below and shall be tendered within 30 days after
the notice of exercise is given or, if later, 20 days after the
Company receives the proceeds of the life insurance described
below.
(b) Life Insurance. The Company agrees to maintain life
insurance on the life of the Shareholder to provide proceeds
for the purpose of paying the purchase price under Section 2
for the Shareholder's Shares. That life insurance is listed on
Exhibit A attached hereto, and the Company agrees to execute a
new Exhibit A if at any time the facts stated thereon should
change. The Company agrees to hold the proceeds of such life
insurance in trust for use in paying the purchase price for the
deceased Shareholder's Shares, and, except as provided in
Section 3 below, those proceeds shall not be an asset of the
Company for use for any purpose other than repurchasing Shares
under this Section 1. If the Company breaches the foregoing
agreement to maintain life insurance, that breach shall not
give rise to any liability of the Company hereunder unless:
(1) the Shareholder ceases to be an executive officer of the
Company, or ceases to be a director of the Company, and the
breach occurs thereafter or (2) the breach is made pursuant to
a directive of the Company's board of directors. The Company
additionally agrees that it will promptly pay the premiums on
the policies, will not transfer the policies or any interest
therein except as provided in this Agreement, and will not
borrow against the policies.
(c) Shares to be Purchased. Promptly upon the
Shareholder's death, the board of directors of the Company
shall value the Company's Shares as provided in Section 2
below. The per Share value thus determined shall be divided
into the amount of the total life insurance proceeds received;
and the result thus obtained (rounded down to the nearest whole
Share) shall be the maximum number of Shares that the Company
shall be obligated to purchase pursuant to this Section 1.
(d) Right of First Refusal. If the Shareholder's estate
receives a "Third Party Offer" at any time within 12 months of
the date of the Shareholder's death, then the Shareholder's
estate shall first offer to sell the Shares involved to the
Company as provided in this Subsection. For these purposes, a
Third Party Offer shall be a bona fide written offer made by
another person to purchase Shares. Upon receipt of the Third
Party Offer, the Shareholder's estate shall send a copy of it
to the Company, along with a statement that the estate offers
the Shares to the Company and that, unless purchased by the
Company pursuant to this Subsection, the estate intends to
transfer the Shares pursuant to that Third Party Offer. Upon
receipt of those items, the Company shall have 30 days to
accept the offer. Acceptance shall be made in a writing
delivered personally or sent registered or certified mail,
postage prepaid, to the estate within the required acceptance
period. The Company may accept the offer for some or all of
the Shares involved and may use the proceeds from life
insurance provided for in this Section. Any shares not sold to
the Company pursuant to this Subsection may be sold pursuant to
the Third Party Offer, provided that the sale is completed
within 20 days after expiration of the 30 day period described
above, and provided that the sale is made pursuant to the same
price and terms as those set forth in the Third Party offer.
(e) During the 12 month period after the Shareholder's
death, the Shareholder's estate and his heirs and legatees
shall not sell any Shares except that: (i) Shares may be sold
as provided in this Section 1, (ii) this Section 1 shall no
longer bind any party after the maximum number of Shares
described in Subsection (c) above have been sold to the Company
under this Section 1, and (iii) the Shareholder's estate may
sell Shares to or through others during any six month period up
to 1% of the outstanding shares of the Company's Common Stock.
2. Price
The purchase price to be paid for each Share purchased
pursuant to Section 1 shall be the fair market value as
provided in this Section, calculated as of the date of death
(without consideration of the proceeds of the life insurance to
be received as provided in Section 1). The fair market value
per Share for these purposes shall be 95% of the closing sale
price of the stock as reported on NASDAQ for the last day
immediately preceding the day of death for which trades are
reported, provided, however, that the fair market value (i)
shall not be less than 95% of the book value per Share
calculated in accordance with generally accepted accounting
principles as of the end of the Company's fiscal quarter ended
most recently prior to the death and (ii) shall not be less
than the weighted market price per Share calculated as follows:
(a) Mean Sale Price. The "Mean Sale Price" for trading
reported on NASDAQ for a given day shall be the midpoint
between the reported high and low trade prices for the
day, calculated to the nearest tenth of a cent.
(b) Dollar Volume Per Day. The "Dollar Volume" for a
given trading day shall be the Mean Sale Price thus
calculated for each day multiplied by the reported total
number of shares traded that day.
(c) Calculation Periods. The Dollar Volume for each
trading day shall be calculated for the five years
preceding the date of death and then the Total Dollar
Volume (defined below) shall be calculated for each of
three time periods, namely the one year preceding the date
of death, the three years preceding that date, and the
five years preceding that date (each such time period
being a "Calculation Period").
(d) Total Dollar Volumes. The Dollar Volumes for all
days for which trades are reported during each Calculation
Period shall be added together to reach "Total Dollar
Volume" for that Calculation Period.
(e) Total Shares Traded. The reported number of shares
traded each day during each Calculation Period shall be
added to the same number for each such other day to reach
the "Total Shares Traded" during that Calculation Period.
(f) Weighted Fair Market Value. The Total Dollar Volume
for each Calculation Period shall be divided by the Total
Shares Traded during that Calculation Period to reach a
weighted market price for that Calculation Period. The
weighted market price for purposes of this Agreement shall
be the highest price calculated with respect to the three
Calculation Periods.
For purposes of this Agreement: (1) "NASDAQ" shall mean the
National Association of Securities Dealers Automated Quotation
System for each day during the Calculation Period on which that
System is the principal United States market for the Shares,
and for any day when it is not, then whatever established
public trading market may be the principal United States
market, and (2) reported trading volume and prices shall be
based on the most reliable sources from which that information
is received regularly by the Company.
3. Proceeds Available to Company.
To the extent that the proceeds of life insurance received
by the Company pursuant to Section 1 above are not used to
purchase Shares owned by the Shareholder on his death, the
proceeds may be retained and used by the Company for its own
business purposes.
4. Delivery of Shares
Upon tender of the purchase price pursuant to this
Agreement, the Shareholder's estate shall deliver certificates
representing the Shares to be sold, duly endorsed in blank or
accompanied by duly executed stock transfer powers in blank,
with signatures guaranteed and with any necessary stock
transfer stamps attached, and accompanied by an incumbency
certificate of the person or persons who signed the
endorsements or powers and by necessary inheritance tax waivers
or affidavits.
5. Notice
Any notice or other writing mailed pursuant to this
Agreement shall be sent (a) to the Company at its principal
place of business, to the attention of the Company's Secretary,
and (b) to the Shareholder or his estate at his latest address
as set forth in the Company's records. The Company agrees to
use its reasonable efforts to keep its records current for
these purposes. Any such writing is sent or given when
delivered personally or when deposited in the U.S. mail with
proper postage thereon.
6. Termination of Agreement
This Agreement shall terminate in its entirety upon the
happening of the following event: the written consent of the
Shareholder and the Company.
7. Transfer of Policies
If as a result of a bankruptcy proceeding, sheriff's levy,
or for any other reason, the Company is required by law to sell
or transfer the life insurance policies called for in Section 1
above, or if the Company (contrary to its obligations
hereunder) determines to sell the policies or to cease making
premium payments thereon or takes any other action contrary to
the terms of this Agreement, the Shareholder shall have the
first option to acquire those policies while they remain in
force. The purchase price for the policies shall be equal to
85% of their respective cash surrender values at the time of
purchase, and that price may be paid by delivery to the Company
of the Shareholder's promissory note for that amount, bearing
interest at the Applicable Federal Rate as of the date of
transfer, with principal and all interest becoming due 60 days
after the death of the Shareholder. The Company agrees that,
upon request by the Shareholder, the Shareholder (or some other
person or entity designated by the Shareholder to be the
Shareholder's agent for these purposes) shall be granted a
security interest in or a contingent assignment of the
policies, with at least 30 days prior notice of any transfer,
cancellation, or borrowing, so as to assure that the
Shareholder's option will be enforced. Nothing in this Section
7 shall relieve the Company from its obligations to secure and
maintain those life insurance policies as provided in Section 1
above and nothing in this Section or consequent to its
provisions shall limit the liability of the Company resulting
from a breach of this Agreement by the Company.
8. Miscellaneous
(a) Law Applicable. This Agreement shall be governed
and construed under the laws of the State of New York without
regard to its principles of conflict of laws.
(b) Amendment. This Agreement may not be amended except
by a writing signed by the parties.
(c) Rights of Others. Except as expressly provided
herein, neither the Company, nor any holder or beneficial owner
of Shares, nor any other person, shall acquire or enforce any
rights under this Agreement.
(d) Heirs, Successors and Assigns. The provisions of
this Agreement shall be binding upon and inure to the benefit
of the parties and their respective heirs, legatees, executors,
administrators, successors and assigns, but the rights and
obligations under this Agreement shall not be assignable.
(e) Mergers, Etc. In case of any merger, consolidation
or other reorganization of the Company or any recapitalization
of the capital stock of the Company, the "Shares" as used
herein shall include the securities received by the Shareholder
in respect of or in exchange for his existing Shares.
(f) Additional Actions. Each party agrees to execute
and deliver all such documents and to take such further action
as may be necessary to carry out the purposes and provisions of
this Agreement. Without limiting the preceding sentence, (i)
the Company agrees that, upon written request of the
Shareholder, the Company will transfer ownership in the life
insurance policies to a grantor trust or will arrange for the
proceeds of the policies to be paid directly to a trust, so as
to better assure the attainment of the purposes and provisions
of this Agreement and (ii) the Shareholder agrees that, upon
written request of the Company, the Shareholder will submit
Share certificates for placement thereon of a restrictive
legend referring to the provisions of this Agreement.
IN WITNESS WHEREOF the Company and the Shareholder have
executed this Agreement.
Company: DETECTION SYSTEMS INC.
By: /s/ Xxxxxx X. Xxxxx, Director
Shareholder:
/s/ Xxxx X. Xxxxxxxxx
EXHIBIT A
To Stock Purchase Agreement
LIST OF INSURANCE POLICIES
In connection with Section 1 of the Stock Purchase
Agreement, the Company maintains life insurance (with the
Company as the beneficiary and with the proceeds to be
received, held and paid out as provided in Section 1 of the
Agreement) as follows:
Death
Policy Company Insured Benefit
9 626 691 Massachusetts Mutual Xxxx X. Xxxxxxxxx
$1,000,000
2 660 835 Phoenix Home Mutual Xxxx X. Xxxxxxxxx
$1,000,000
DETECTION SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxx
Its: Chairman, Compensation Committee
STOCK PURCHASE AGREEMENT
THIS AGREEMENT, dated October 20, 1994, is between
DETECTION SYSTEMS, INC. ("Company"), a New York corporation,
and the "Shareholder" who has signed below [Xxxxx X. Xxxxxxx].
The Shareholder is an executive officer and director of
the Company and owns a substantial block of the issued and
outstanding shares of its Common Stock, par value $0.05 per
share ("Shares").
Believing it in their mutual best interests to provide for
the purchase and sale of some of the Shares owned by the
Shareholder upon his death, the parties hereby agree as
follows:
1. Death of Shareholder
(a) Option on Death. Upon the death of the Shareholder,
his estate shall have the option to sell Shares to the Company
pursuant to the terms of this Agreement. This option may be
exercised by the executor or administrator of his estate at any
time within twelve months of the date of death (or, if later,
three months of the date of the executor's or administrator's
appointment) by giving written notice of exercise to the
Company personally or by registered or certified mail, postage
prepaid. The option may be exercised with respect to any
number of the Shares owned by the Shareholder at his death, up
to the maximum number calculated as provided in Subsection 1(c)
below. The purchase price for the Shares shall be as provided
in Section 2 below and shall be tendered within 30 days after
the notice of exercise is given or, if later, 20 days after the
Company receives the proceeds of the life insurance described
below.
(b) Life Insurance. The Company agrees to maintain life
insurance on the life of the Shareholder to provide proceeds
for the purpose of paying the purchase price under Section 2
for the Shareholder's Shares. That life insurance is listed on
Exhibit A attached hereto, and the Company agrees to execute a
new Exhibit A if at any time the facts stated thereon should
change. The Company agrees to hold the proceeds of such life
insurance in trust for use in paying the purchase price for the
deceased Shareholder's Shares, and, except as provided in
Section 3 below, those proceeds shall not be an asset of the
Company for use for any purpose other than repurchasing Shares
under this Section 1. If the Company breaches the foregoing
agreement to maintain life insurance, that breach shall not
give rise to any liability of the Company hereunder unless:
(1) the Shareholder ceases to be an executive officer of the
Company, or ceases to be a director of the Company, and the
breach occurs thereafter or (2) the breach is made pursuant to
a directive of the Company's board of directors. The Company
additionally agrees that it will promptly pay the premiums on
the policies, will not transfer the policies or any interest
therein except as provided in this Agreement, and will not
borrow against the policies.
(c) Shares to be Purchased. Promptly upon the
Shareholder's death, the board of directors of the Company
shall value the Company's Shares as provided in Section 2
below. The per Share value thus determined shall be divided
into the amount of the total life insurance proceeds received;
and the result thus obtained (rounded down to the nearest whole
Share) shall be the maximum number of Shares that the Company
shall be obligated to purchase pursuant to this Section 1.
(d) Right of First Refusal. If the Shareholder's estate
receives a "Third Party Offer" at any time within 12 months of
the date of the Shareholder's death, then the Shareholder's
estate shall first offer to sell the Shares involved to the
Company as provided in this Subsection. For these purposes, a
Third Party Offer shall be a bona fide written offer made by
another person to purchase Shares. Upon receipt of the Third
Party Offer, the Shareholder's estate shall send a copy of it
to the Company, along with a statement that the estate offers
the Shares to the Company and that, unless purchased by the
Company pursuant to this Subsection, the estate intends to
transfer the Shares pursuant to that Third Party Offer. Upon
receipt of those items, the Company shall have 30 days to
accept the offer. Acceptance shall be made in a writing
delivered personally or sent registered or certified mail,
postage prepaid, to the estate within the required acceptance
period. The Company may accept the offer for some or all of
the Shares involved and may use the proceeds from life
insurance provided for in this Section. Any shares not sold to
the Company pursuant to this Subsection may be sold pursuant to
the Third Party Offer, provided that the sale is completed
within 20 days after expiration of the 30 day period described
above, and provided that the sale is made pursuant to the same
price and terms as those set forth in the Third Party offer.
(e) During the 12 month period after the Shareholder's
death, the Shareholder's estate and his heirs and legatees
shall not sell any Shares except that: (i) Shares may be sold
as provided in this Section 1, (ii) this Section 1 shall no
longer bind any party after the maximum number of Shares
described in Subsection (c) above have been sold to the Company
under this Section 1, and (iii) the Shareholder's estate may
sell Shares to or through others during any six month period up
to 1% of the outstanding shares of the Company's Common Stock.
2. Price
The purchase price to be paid for each Share purchased
pursuant to Section 1 shall be the fair market value as
provided in this Section, calculated as of the date of death
(without consideration of the proceeds of the life insurance to
be received as provided in Section 1). The fair market value
per Share for these purposes shall be 95% of the closing sale
price of the stock as reported on NASDAQ for the last day
immediately preceding the day of death for which trades are
reported, provided, however, that the fair market value (i)
shall not be less than 95% of the book value per Share
calculated in accordance with generally accepted accounting
principles as of the end of the Company's fiscal quarter ended
most recently prior to the death and (ii) shall not be less
than the weighted market price per Share calculated as follows:
(a) Mean Sale Price. The "Mean Sale Price" for trading
reported on NASDAQ for a given day shall be the midpoint
between the reported high and low trade prices for the
day, calculated to the nearest tenth of a cent.
(b) Dollar Volume Per Day. The "Dollar Volume" for a
given trading day shall be the Mean Sale Price thus
calculated for each day multiplied by the reported total
number of shares traded that day.
(c) Calculation Periods. The Dollar Volume for each
trading day shall be calculated for the five years
preceding the date of death and then the Total Dollar
Volume (defined below) shall be calculated for each of
three time periods, namely the one year preceding the date
of death, the three years preceding that date, and the
five years preceding that date (each such time period
being a "Calculation Period").
(d) Total Dollar Volumes. The Dollar Volumes for all
days for which trades are reported during each Calculation
Period shall be added together to reach "Total Dollar
Volume" for that Calculation Period.
(e) Total Shares Traded. The reported number of shares
traded each day during each Calculation Period shall be
added to the same number for each such other day to reach
the "Total Shares Traded" during that Calculation Period.
(f) Weighted Fair Market Value. The Total Dollar Volume
for each Calculation Period shall be divided by the Total
Shares Traded during that Calculation Period to reach a
weighted market price for that Calculation Period. The
weighted market price for purposes of this Agreement shall
be the highest price calculated with respect to the three
Calculation Periods.
For purposes of this Agreement: (1) "NASDAQ" shall mean the
National Association of Securities Dealers Automated Quotation
System for each day during the Calculation Period on which that
System is the principal United States market for the Shares,
and for any day when it is not, then whatever established
public trading market may be the principal United States
market, and (2) reported trading volume and prices shall be
based on the most reliable sources from which that information
is received regularly by the Company.
3. Proceeds Available to Company.
To the extent that the proceeds of life insurance received
by the Company pursuant to Section 1 above are not used to
purchase Shares owned by the Shareholder on his death, the
proceeds may be retained and used by the Company for its own
business purposes.
4. Delivery of Shares
Upon tender of the purchase price pursuant to this
Agreement, the Shareholder's estate shall deliver certificates
representing the Shares to be sold, duly endorsed in blank or
accompanied by duly executed stock transfer powers in blank,
with signatures guaranteed and with any necessary stock
transfer stamps attached, and accompanied by an incumbency
certificate of the person or persons who signed the
endorsements or powers and by necessary inheritance tax waivers
or affidavits.
5. Notice
Any notice or other writing mailed pursuant to this
Agreement shall be sent (a) to the Company at its principal
place of business, to the attention of the Company's Secretary,
and (b) to the Shareholder or his estate at his latest address
as set forth in the Company's records. The Company agrees to
use its reasonable efforts to keep its records current for
these purposes. Any such writing is sent or given when
delivered personally or when deposited in the U.S. mail with
proper postage thereon.
6. Termination of Agreement
This Agreement shall terminate in its entirety upon the
happening of the following event: the written consent of the
Shareholder and the Company.
7. Transfer of Policies
If as a result of a bankruptcy proceeding, sheriff's levy,
or for any other reason, the Company is required by law to sell
or transfer the life insurance policies called for in Section 1
above, or if the Company (contrary to its obligations
hereunder) determines to sell the policies or to cease making
premium payments thereon or takes any other action contrary to
the terms of this Agreement, the Shareholder shall have the
first option to acquire those policies while they remain in
force. The purchase price for the policies shall be equal to
85% of their respective cash surrender values at the time of
purchase, and that price may be paid by delivery to the Company
of the Shareholder's promissory note for that amount, bearing
interest at the Applicable Federal Rate as of the date of
transfer, with principal and all interest becoming due 60 days
after the death of the Shareholder. The Company agrees that,
upon request by the Shareholder, the Shareholder (or some other
person or entity designated by the Shareholder to be the
Shareholder's agent for these purposes) shall be granted a
security interest in or a contingent assignment of the
policies, with at least 30 days prior notice of any transfer,
cancellation, or borrowing, so as to assure that the
Shareholder's option will be enforced. Nothing in this Section
7 shall relieve the Company from its obligations to secure and
maintain those life insurance policies as provided in Section 1
above and nothing in this Section or consequent to its
provisions shall limit the liability of the Company resulting
from a breach of this Agreement by the Company.
8. Miscellaneous
(a) Law Applicable. This Agreement shall be governed
and construed under the laws of the State of New York without
regard to its principles of conflict of laws.
(b) Amendment. This Agreement may not be amended except
by a writing signed by the parties.
(c) Rights of Others. Except as expressly provided
herein, neither the Company, nor any holder or beneficial owner
of Shares, nor any other person, shall acquire or enforce any
rights under this Agreement.
(d) Heirs, Successors and Assigns. The provisions of
this Agreement shall be binding upon and inure to the benefit
of the parties and their respective heirs, legatees, executors,
administrators, successors and assigns, but the rights and
obligations under this Agreement shall not be assignable.
(e) Mergers, Etc. In case of any merger, consolidation
or other reorganization of the Company or any recapitalization
of the capital stock of the Company, the "Shares" as used
herein shall include the securities received by the Shareholder
in respect of or in exchange for his existing Shares.
(f) Additional Actions. Each party agrees to execute
and deliver all such documents and to take such further action
as may be necessary to carry out the purposes and provisions of
this Agreement. Without limiting the preceding sentence, (i)
the Company agrees that, upon written request of the
Shareholder, the Company will transfer ownership in the life
insurance policies to a grantor trust or will arrange for the
proceeds of the policies to be paid directly to a trust, so as
to better assure the attainment of the purposes and provisions
of this Agreement and (ii) the Shareholder agrees that, upon
written request of the Company, the Shareholder will submit
Share certificates for placement thereon of a restrictive
legend referring to the provisions of this Agreement.
IN WITNESS WHEREOF the Company and the Shareholder have
executed this Agreement.
Company: DETECTION SYSTEMS INC.
By: /s/ Xxxxxx X. Xxxxx, Director
Shareholder:
/s/ Xxxx X. Xxxxxxxxx
EXHIBIT A
To Stock Purchase Agreement
LIST OF INSURANCE POLICIES
In connection with Section 1 of the Stock Purchase
Agreement, the Company maintains life insurance (with the
Company as the beneficiary and with the proceeds to be
received, held and paid out as provided in Section 1 of the
Agreement) as follows:
Death
Policy Company Insured Benefit
9 626 691 Massachusetts Mutual Xxxx X. Xxxxxxxxx
$1,000,000
2 660 835 Phoenix Home Mutual Xxxx X. Xxxxxxxxx
$1,000,000
DETECTION SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxx
Its: Chairman, Compensation Committee
