Exhibit 1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is entered into as of
May 7, 1998 among those persons listed on Schedule A attached hereto
(individually a "Seller" and collectively the "Sellers") and those persons
identified on Schedule B attached hereto (individually a "Buyer" and
collectively the "Buyers").
BACKGROUND
A. The Sellers are the owners of a total of approximately 176,113
shares of Class A Common Stock and 1,155,933 shares of Class B Common Stock
(collectively, the "Shares") of Figgie International, Inc., a Delaware
corporation (the "Company"), as more specifically set forth on Schedule A.
B. Xxxxxxx X. Xxxx & Associates, L.P., a California limited partnership
("RCBA"), is the general partner or investment adviser of each of the Buyers.
C. The Sellers desire to sell, and the Buyers desire to purchase, all
of the Shares upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Basic Transaction.
(a) Purchase of Shares. Pursuant to the terms and conditions
set forth below, each Seller shall sell that number of Shares set forth opposite
such Seller's name on Schedule A (with the possible exception of 32,204 shares
as contemplated by Section 2(b) below), and each Buyer shall purchase that
number of Shares set forth opposite such Buyer's name on Schedule B (adjusted in
Buyer's sole discretion to reflect the possible exception of 32,204 shares
referenced above).
(b) Purchase Price. The purchase price is $15.63 net per
Share, for a total purchase price of $20,819,878.98 for the 1,332,046 Shares,
plus additional contingent consideration as set forth in Section 3 below.
2. Conditions; Closing.
(a) Buyers' Conditions. The Buyers' obligations under this
Agreement are conditioned upon (i) by 11:59 p.m., San Francisco time, May 4,
1998, one designee of RCBA being appointed a director of the Company, and (ii)
all of the Shares being sold to the Buyers (with the possible exception of
32,204 shares as contemplated by Section 2(b) below). Buyers covenant that the
condition in Section 2(a)(i) has been satisfied.
(b) Settlement Date. If the conditions in Section 2(a) are
satisfied or waived, there shall be one or more settlement dates at the election
of Sellers. The first settlement date shall be May 11, 1998 for the transfer of
all Shares, except for a maximum of 32,204 shares of the Company for which
settlement may occur within forty-five (45) days from the date of this
Agreement. If there is a second settlement date, Buyers shall receive at least
two (2) business days' prior notice of all material terms of that settlement
(including the settlement date and the number of shares being transferred by
each Seller). In exchange for the Sellers' good delivery of the shares being
transferred on a settlement date, the Buyers will wire transfer immediately
available funds into each Seller's account an amount equal to the purchase price
of the shares being transferred, pursuant to wire transfer instructions to be
provided by each Seller to RCBA. Sellers shall not be in breach of their
obligations hereunder if the second settlement does not occur for any reason.
3. Contingent Consideration.
(a) Triggering Events. The Buyers will pay additional
contingent consideration to the Sellers pursuant to this Section 3 if but only
if all of the following conditions occur:
(i) Within nine months of the date hereof, an offer is
made to all holders of a class of the Company's common stock to purchase all or
a portion of such shares.
(ii) Such offer is made either:
(A) By any Buyer or any of its "Affiliates" (as defined below) pursuant to
a merger proposal, tender offer or other comparable transaction. (An "Affiliate"
means, with respect to any specified person, any person that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with such specified person.); or
(B) By the Company or its successor pursuant to an "issuer tender offer"
governed by Rule 13e-4 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") for more than 5% of the outstanding shares of such class of
shares. Notwithstanding the foregoing but subject to Section 3(a)(iv) below, if
the Company makes any offer to acquire any of its common shares as part of a
transaction to effect the acquisition, merger or recapitalization of the Company
by another party that is neither a Buyer nor an Affiliate of any Buyer, this
Section will have no effect.
(iii) The net amount to be received by such holders is in
excess of $15.63 per share.
(iv) The transaction is consummated thereafter, including a
transaction initiated by a Buyer or any of its Affiliates but consummated or
topped by a transaction initiated and consummated by a third party unaffiliated
with Buyers or any of its Affiliates (the "Subsequent Transaction").
(b) Additional Consideration. If all of the conditions of
Section 3(a) are satisfied, then within three days after the consummation of the
Subsequent Transaction, the Buyers will pay the Sellers additional consideration
for their Shares computed as follows:
(i) Each Seller's number of Shares being sold pursuant to
this Agreement will be multiplied by one-half of the amount by which (A) the
lesser of (1) $17.00, or (2) the net amount received by the Company's
shareholders for each share sold pursuant to the Subsequent Transaction,
exceeds (B) $15.63 per share.
(ii) If the Subsequent Transaction is an offer covered by
Section 3(a)(ii)(B) for a portion, but not all, of a class of the outstanding
common shares of the Company, the amount derived in Section 3(b)(i) above will
be reduced to reflect the number of Shares such Seller could have sold and the
Company would have purchased pursuant to the Subsequent Transaction if such
Seller were a shareholder of the Company.
4. Representations of Sellers. Each Seller, as to itself but as to no
other Seller, hereby represents, warrants and covenants to the Buyers that:
(a) Ownership. Such Seller owns his Shares free and clear of
any pledge, lien, charge, claim, security interest or other encumbrance of any
kind, nature or description. Such Seller's Shares are validly issued, fully paid
and non-assessable.
(b) Authority and Compliance. Such Seller has full power and
authority to transfer his Shares and has complied with or will comply with all
legal requirements, if any, in connection with the sale of his Shares. Such
transfer will not violate the rights of any third party.
(c) No Restrictions. The Shares being transferred by such
Seller are either free of any transfer restrictions applicable to such Seller
or, if there are any transfer restrictions, such Seller has received assurances
from the Company and/or its counsel that such restrictions will not prevent the
transfer of such Shares pursuant to the terms set forth in this Agreement.
5. Representations of Buyers. Each Buyer, as to itself but as to no
other Buyer, hereby represents, warrants and covenants to the Sellers that:
(a) Accredited. Such Buyer is an accredited investor as
defined in Regulation D under The Securities Act of 1933, as amended (the
"Securities Act").
(b) Investment Intent. The Shares being acquired by such Buyer
are being acquired for investment for Buyer's own account, and not with a view
to a distribution of any part thereof.
(c) Transfer. Such Buyer understands that it must bear the
economic risk of this investment in the Shares for an indefinite period of time
because the sale to the Buyers of such Shares has not been registered under the
Securities Act and such Shares cannot be transferred by such Buyer unless such
transfer is registered under the Act or an exemption from such registration is
available, and such share certificates may bear a legend to such effect.
(d) Authority and Compliance. Such Buyer has full power and
authority to purchase its Shares and has complied with or will comply with all
legal requirements, if any, in connection with the purchase of its Shares.
6. Miscellaneous.
(a) Further Action. Each party agrees to use reasonable
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make effective
the transactions contemplated by this Agreement.
(b) Entire Agreement; Successors and Assigns. This Agreement
constitutes the entire understanding among the parties with regard to the
subjects hereof, superseding all prior understandings, agreements,
representations and negotiations, whether oral or written. The terms and
conditions of this Agreement will inure to the benefit of, and be binding upon,
the respective executors, administrators, heirs, successors and assigns of the
parties.
(c) Choice of Law. This Agreement will be interpreted and
enforced in accordance with the laws of the State of Delaware as applied to
contracts executed and performed entirely therein.
(d) Counterparts. This Agreement may be signed in any number
of counterparts and by facsimile, and when so signed and delivered will have the
same effect as if all signatures appeared on the same document.
(e) Notices. All notices required or permitted under this
Agreement must be given in writing (which may include facsimile). All notices
will be effective upon the earlier of (i) receipt (including confirmation that a
facsimile has been received) or (ii) five business days after being deposited in
the U.S. mail or two business days after being delivered to an overnight
courier, in each case properly addressed as set forth on Schedule A or B (as the
case may be), as such address may be changed by proper notice to the other
parties.
(f) Interpretation. All parties have been assisted by counsel
in connection with this Agreement. The normal rule of construction that any
ambiguity will be resolved against the drafting party will not be used in the
interpretation of this Agreement.
(g) Gender and Number. As the context so requires, (i) the
masculine gender will include the feminine and neuter, and vice versa, and (ii)
the singular will include the plural, and vice versa.
(h) [reserved]
(i) Amendment of Agreement. This Agreement may be amended only
by a written instrument signed by all of the parties.
(j) Severability. If any provision of this Agreement or the
application of any such provision to any party is held by a court of competent
jurisdiction to be contrary to law, such provision will be deemed amended to the
minimum extent possible to comply with such law, and the remaining provisions of
this Agreement will remain in full force and effect.
(k) Attorneys' Fees. If it becomes necessary for any party to
initiate legal action or any other proceeding to enforce, defend or construe
such party's rights or obligations under this Agreement, the prevailing party
will be entitled to reasonable costs and expenses, including attorneys' fees and
costs, incurred and paid in connection with such action or proceeding.
(l) Fees and Expenses. The Sellers, on the one hand, and the
Buyers, on the other, shall each bear their own respective fees and costs in
connection with the negotiation and execution of this Agreement and the
consummation of the transactions contemplated hereby, including the payment of
any commission, finder's fee or similar payment because of any act or omission
by such party.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.
THE SELLERS:
_______________________________
XXXXX XXXXXX, XX.
_______________________________
XXXXX X. XXXXXX
_______________________________
XXXXX X. XXXXXX, III
XXXX X. XXXXXX INTER VIVOS
TRUST U/A 6/19/86
BY: __________________________
XXXX X. XXXXXX, TRUSTEE
` _______________________________
XXXXXXX XXXXX FIGGIE
THE XXXXX X. XXXXXX, XX.
IRREVOCABLE TRUST DATED 11/17/65
FOR THE BENEFIT OF
XXXXXXX X. XXXXXX
BY: WILMINGTON TRUST COMPANY, TRUSTEE
BY: ________________________________
THE XXXXX X. XXXXXX, XX.
IRREVOCABLE TRUST DATED 11/17/65
FOR THE BENEFIT OF XXXX X. XXXXXX
BY: WILMINGTON TRUST COMPANY, TRUSTEE
BY: ________________________________
THE XXXXX X. XXXXXX, XX.
IRREVOCABLE TRUST DATED 11/17/65
FOR THE BENEFIT OF XXXXX X.
XXXXXX III
BY: WILMINGTON TRUST COMPANY, TRUSTEE
BY: _________________________________
THE XXXXX X. XXXXXX, XX.
IRREVOCABLE TRUST AGREEMENT DATED
FEBRUARY 16, 1972
BY: __________________________________
XXXXX X. XXXXXX, III, TRUSTEE
XXXXX X. XXXXXX, XX. AND XXXXX X. XXXXXX
IRREVOCABLE TRUST AGREEMENT DATED
SEPTEMBER 13, 1991
BY: _________________________________
XXXXX X. XXXXXX, III, TRUSTEE
BY: _________________________________
XXXXX X. XXXXXXXXX, TRUSTEE
XXXXX X. XXXXXX, XX. IRREVOCABLE TRUST
AGREEMENT DATED APRIL 21, 1989 FBO
BY: WILMINGTON TRUST COMPANY, TRUSTEE
BY: _________________________________
TRUST AGREEMENT DATED JULY 15, 1976, OF
XXXXX X. XXXXXX, XX.
BY: _________________________________
XXXXX X. XXXXXX, XX., TRUSTEE
XXXXX-RELIANCE CORPORATION
BY: __________________________________
TRUST AGREEMENT DATED SEPTEMBER 7, 1976
OF XXXXX X. XXXXXX
BY: _________________________________
XXXXX X. XXXXXX, TRUSTEE
F.E.F. & CO.
BY: __________________________________
XXXXX X. XXXXXX, XX
BY: __________________________________
XXXXX X. XXXXXX, III
HUNTINGTON NATIONAL BANK,TRUSTEE
UNDER THE XXXXX-RELIANCE CORP.
EMPLOYEES' PROFIT SHARING AND SAVINGS
TRUST AND PLAN
BY: __________________________________
SCHEDULE A
SELLERS
Shares Being Sold
Purchase
Sellers Class A Class B Total Price
------- -------- ------- ----- ---------
Xxxxx X. Xxxxxx,
Xx. 2,916 670 3,586 $56,049.18
Xxxxx X. Xxxxxx 58 58 116 $1,813.08
Xxxxx X. Xxxxxx,
III 9,305 58,347 67,652 $l,057,400.76
Xxxx X. Xxxxxx
Inter Vivos Trust
U/A 6/19/86 58,189 58,189 $909,494.07
Xxxxxxx Xxxxx
Figgie 465 465 $7,267.95
The Xxxxx X. Xxxxxx,
Xx. Irrevocable
Trust dated
11/17/65 for the
Benefit of
Xxxxxxx X. Xxxxxx 732 2,499 3,231 $50,500.53
The Xxxxx X. Xxxxxx,
Xx. Irrevocable
Trust dated
11/17/65 for the
Benefit of
Xxxx X. Xxxxxx 733 2,499 3,232 $50,516.16
The Xxxxx X. Xxxxxx,
Xx. Irrevocable
Trust dated
11/17/65 for the
Benefit of
Xxxxx X. Xxxxxx, III 732 2,499 3,231 $50,500.53
Xxxxx X. Xxxxxx,
Xx. Irrevocable
Trust Agreement
Dated February 16,
1972 47,493 47,493 $742,315.59
Xxxxx X. Xxxxxx,
Xx. and Xxxxx X.
Xxxxxx Irreovo-
cable Trust Agree-
ment dated
September 13, 1991 10,000 10,000 $156,300.00
Xxxxx X. Xxxxxx,
Xx. Irrevocable
Trust Agreement
dated April 21,
1989 FBO 209,504 209,504 $3,274,547.52
Trust Agreement
dated July 15, 1976
of Xxxxx X.
Xxxxxx, Xx. 112,141 565,527 677,668 $10,591,950.84
Xxxxx Reliance
Corporation 37,844 134,564 172,408 $2,694,737.04
Trust Agreement dated
September 7, 1976
of Xxxxx X. Xxxxxx 57,823 57,823 $903,773.49
FEF & Co. 1,500 2,112 3,612 $56,455.56
Huntington National
Bank, Trustee Under
The Xxxxx-Reliance
Corp. Profit Sharing
and Savings Trust
and Plan 152 13,684 13,836 $216,256.68
------- --------- --------- --------------
176,113 1,155,933 1,332,046 $20,819,878.98
SCHEDULE B
BUYERS
Buyer's Name and Address1 Shares Being Purchased Purchase
Price
Class A Class B Total
Xxxxxxx Capital Partners, L.P. 46,606 305,900 352,506 $5,509,668.78
Xxxxxxx Capital Partners II, L.P. 9,765 64,096 73,861 1,154,447.43
BK Capital Partners IV, L.P. 3,011 19,760 22,771 355,910.73
Xxxxxxx Capital Fund (Cayman), 3,583 23,515 27,098 423,541.74
Ltd.
Insurance Company Supported 23,655 155,262 178,917 2,796,472.71
Organizations Pension Plan
United Brotherhood of Carpenters 2,641 17,338 19,979 312,271.77
and Joiners of America Local
Unions and Councils Pension Fund
Xxx Xxxxxxxxxx Pension Trust for 69,082 453,427 522,509 8,166,815.67
Southern California
The Common Fund 17,770 116,635 134,405 2,100,750.15
TOTAL 176,113 1,155,933 1,332,046 $20,819,878.98
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