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EXHIBIT 10.6
INTERIM STOCK REDEMPTION AGREEMENT
THIS AGREEMENT ("Agreement"), effective April 22, 1996, is by and among LDM
INDUSTRIES INC., a Michigan corporation ("LDM"), and XXXXXXX X. XXXX, TRUSTEE;
XXXXXXX XXXXXXXX, TRUSTEE; and XXX XXXXXX, TRUSTEE (individually a
"Shareholder", and collectively the "Shareholders").
RECITALS:
A. The Shareholders are presently the owners of all of the issued and
outstanding stock of LDM and may acquire additional shares of such
stock in the future.
B. LDM and the Shareholders believe that it is in their best interests to
create a market for the disposition of the stock of LDM upon the death of
a Shareholder.
C. LDM and the Shareholders currently are negotiating the terms of a
comprehensive stock redemption agreement ("SRA"), to be executed in the
near future.
D. LDM has purchased, and is purchasing additional, insurance on the lives of
the individual Shareholders. All such policies are owned by LDM and name
LDM as the beneficiary. The purpose of such policies is to provide
liquidity to allow LDM to redeem the stock of LDM owned by any Shareholder
upon his death.
E. Until the comprehensive SRA is executed by LDM and the Shareholders, the
parties desire to provide a mechanism for the payment of any such
insurance proceeds to the legal representative of a Shareholder upon his
death in exchange for his LDM stock.
NOW, THEREFORE, in consideration of the mutual agreements herein recited
and for other valuable consideration, the parties agree as follows:
1. PURCHASE AND MAINTENANCE OF LIFE INSURANCE POLICIES. LDM will purchase,
maintain, and pay the premiums as they become due for the life
insurance policies listed in Schedule A, attached hereto and incorporated
herein by reference ("Insurance Policies"). LDM shall not assign, encumber,
borrow against or otherwise diminish or dispose of any of the Insurance
Policies, whether before or after the termination of this Agreement, without
the prior written consent of the insured Shareholder(s), which consent may be
withheld for any reason. However, in the event that any Shareholder ceases to
own any LDM stock during his lifetime, then LDM may borrow against or terminate
any of the Insurance Policies owned on the life of such former Shareholder;
provided, that prior to termination of any such Policies, LDM shall notify such
former Shareholder of LDM's intent to terminate such Policies. Upon receipt of
such notice, the former Shareholder shall have sixty (60) days to elect in
writing to purchase all or any of such Policies from LDM for an amount equal to
their respective cash surrender values, net of any loans outstanding to LDM.
Each Shareholder agrees that LDM may borrow against the cash values of all
currently issued Policies to help fund the first premium payments for the new
Policies to be issued by Prudential, as
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described in Schedule A. LDM shall be the sole owner and beneficiary of
all Insurance Policies, and all proceeds of the Insurance Policies shall be
payable to LDM.
2. MANDATORY SALE UPON DEATH. Each Shareholder agrees for himself, his
heirs, personal and legal representatives, to sell to LDM in the event
of his death all of the stock of LDM then owned by him, at a purchase
price as set forth in Schedule B. LDM agrees to purchase all such stock in
accordance with the terms of this Agreement.
3. CLOSING AND PAYMENT OF PURCHASE PRICE. Immediately upon receipt by
LDM of the proceeds of the Insurance Policies owned on the life of a
deceased Shareholder, the legal representative of the deceased Shareholder and
LDM shall close the sale and purchase of such stock (the "Closing"). The
Closing shall take place at the principal office of LDM as follows. The
Closing date shall be established by LDM, which shall provide written notice to
the legal representative of the deceased Shareholder at least seven (7) days
prior to the Closing. At the Closing, LDM will pay for the LDM stock by
certified or bank cashiers check, and the legal representative of the deceased
Shareholder will deliver the certificates representing such stock to be sold,
duly endorsed for transfer, free and clear of all liens, encumbrances and
claims whatsoever. If the legal representative of the deceased Shareholder
protests the Closing, does not attend the Closing, or otherwise does not
deliver the appropriate stock certificates and/or stock assignments at the
Closing, then the purchase price of the stock shall be segregated by LDM in a
separate interest-bearing account, and LDM will adjust its transfer books to
reflect that the shares of stock being sold have been canceled. Each
Shareholder hereby irrevocably appoints the Secretary, Assistant Secretary and
any other officer of LDM as his true and lawful attorney-in-fact to execute and
deliver in his place and stead all stock certificates, instruments and
documents necessary or incidental to the conveyance and transfer of the stock
sold at the Closing. This power of attorney is irrevocable and is coupled with
an interest and does not terminate on the disability or death of any
Shareholder, but continues for so long as this Agreement is in effect. If a
Shareholder's LDM stock is owned in a trust at the date of his death, then, for
purposes of this Agreement, the term "legal representative" shall mean the
trustee or successor trustee of such trust.
4. TERMINATION OF AGREEMENT. This Agreement shall terminate upon the
written agreement of all parties who have executed this Agreement. In
addition, if a comprehensive SRA is not executed by LDM and the Shareholders
within six (6) months after the effective date hereof, then, upon written
notice to the other parties hereto, any Shareholder may terminate this
Agreement, but only with respect to the shares of LDM owned by such terminating
Shareholder.
5. NOTICE. Any notices or other communications required or permitted
hereunder shall be sufficiently given if delivered personally or sent
by registered or certified mail, postage prepaid, and addressed to LDM at its
registered office in the State of Michigan, or to any Shareholder at his
address as reflected in LDM's records. Such notice shall be deemed to have
been given as of the date so delivered or deposited in the United States mail,
as the case may be.
6. ADVICE OF COUNSEL. The parties hereto each agree, stipulate and
acknowledge that LDM's counsel, Xxxx, Xxxxxxx and Xxxxx, P.L.C., has
prepared this Agreement on behalf of and in the course of its representation of
LDM as directed by its Board of Directors; that Xxxx, Xxxxxxx and Xxxxx, P.L.C.
has not represented the interests of any individual Shareholder in connection
with
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this Agreement; that each Shareholder has been advised that a conflict
of interest may exist between his or her interests and those of LDM and/or the
other Shareholders; that each Shareholder has been advised to seek the advice
of his or her own independent legal counsel, and that each Shareholder has had
the opportunity to seek the advice of his or her own independent legal counsel.
7. SUCCESSORS BOUND BY AGREEMENT. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
personal and legal representatives, including any trustee or successor trustee.
The parties agree for themselves and their personal and legal representatives
to do all acts necessary to carry out the intents and purposes of this
Agreement.
8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan, notwithstanding the
fact that one or more of the parties is or may hereafter become domiciled in a
different state.
9. AMENDMENT OF AGREEMENT. This Agreement may be altered or amended only
by the mutual written agreement of all parties who have executed this
Agreement.
10. COUNTERPARTS. This Agreement may be executed in any number of separate
counterparts by the parties hereto, each of which shall be an original
but all of which taken together shall constitute one and the same instrument.
It shall not be necessary that all of the parties sign any one counterpart.
This Agreement shall bind each of the Shareholders hereto as and when they
execute this Agreement, and the failure of any Shareholder to execute this
Agreement shall not affect the binding nature of this Agreement as between LDM
and the Shareholders who have executed this Agreement.
11. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties and supersedes any and all other agreements, negotiations
and discussions, either oral or written, between or among any of the parties
hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement, effective
the date set forth above.
LDM INDUSTRIES INC. Xxxxxxx X. Xxxx
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XXXXXXX X. XXXX, TRUSTEE, SHAREHOLDER
By: Xxxxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx
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Treasurer XXXXXXX XXXXXXXX, TRUSTEE, SHAREHOLDER
Xxx Xxxxxx
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XXX XXXXXX, TRUSTEE, SHAREHOLDER
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SCHEDULE A TO
INTERIM STOCK REDEMPTION AGREEMENT
POLICIES OF INSURANCE
A. XXXXXXX X. XXXX
1. Midland Mutual
Policy No. U72358 $ 2,000,000
2. Xxxxxxxxx Xxxxxxxx
Policy No. 8537038 1,000,000
3. Prudential
Policy No. 77805409 30,000,000
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XXXX TOTAL INSURANCE AMOUNT: $33,000,000
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B. XXX XXXXXX
1. Xxxxxxxxx Xxxxxxxx
Policy Xx. 0000000 $ 3,000,000
2. Prudential
Policy No. 77805402 25,000,000
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BALOUS TOTAL INSURANCE AMOUNT: $28,000,000
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C. XXXXXXX XXXXXXXX
1. Xxxxxxxxx Xxxxxxxx
Policy Xx. 0000000 $ 1,000,000
2. Prudential
Policy No. 77805407 10,000,000
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XXXXXXXX TOTAL INSURANCE AMOUNT: $11,000,000
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SCHEDULE B TO
INTERIM STOCK REDEMPTION AGREEMENT
STOCK PURCHASE PRICE
A. Xxxxxxx X. Xxxx, Trustee
300 Shares
Purchase Price = $33,000,000
B. Xxx Xxxxxx, Trustee
300 Shares
Purchase Price = $33,000,000
C. Xxxxxxx Xxxxxxxx, Trustee
100 Shares
Purchase Price = $11,000,000
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