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EXHIBIT 10.18
STOCK OPTION AGREEMENT
This Stock Option Agreement (this "Agreement") is made as of the 1st day of
May, 1992, by and between Transition Engineering, Inc., a Minnesota corporation
(the "Company"), and Xxxx X. Xxxx ("Xxxx").
WITNESSETH;
WHEREAS, contemporaneously with the execution of this Agreement, the
Company and Xxxx have entered into an Employment Agreement of even date
herewith;
WHEREAS, as an additional incentive to Xxxx, the Company wishes to enter
into this Agreement whereby Xxxx is awarded an option (the "Option") to
purchase up to 4.5% of the Company's common stock, $.01 par value per share
(the "Common Stock"); and
WHEREAS, as of the date hereof, the capitalization of the Company consists of
1,000 shares of Common Stock, all of which is issued to Americable, Inc., a
Minnesota Corporation ("Americable"), a wholly owned subsidiary of North Star
Universal, Inc., also a Minnesota corporation ("North Star").
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein set forth, the parties hereto agree as follows:
1. Purpose. This Agreement is intended to advance the interests of the
Company and its shareholder, Americable, by encouraging and enabling Xxxx, upon
whose judgment, initiative and effort the Company is largely dependent for the
successful conduct of its business, to acquire and retain a proprietary
interest in the Company by ownership of its Common Stock. The Option granted
under this Agreement is intended to be an option which does not meet the
requirements of Section 422A of the Internal Revenue Code of 1986 (the "Code").
2. Definitions: As used throughout this Agreement, the terms defined
below shall have the following meanings, respectively (such definitions to be
equally applicable to the singular and plural forms thereof):
(a) "Book Value" shall mean the assets of the Company, less its
liabilities (but excluding long term liabilities owed to Americable, North Star
or other Affiliates of the Company), all as determined by generally accepted
accounting principles.
(b) "Book Value Per Share" shall mean the Book Value, divided by
the then outstanding number of shares of Common Stock.
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(c) "Corporate Transaction" shall mean:
(i) a merger or acquisition in which the Company is not
the surviving entity, except for a transaction (i) the principal purpose of
which is to change the State of the Company's incorporation or (ii) with or
involving an Affiliate of the Company, Americable or North Star;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company except to an Affiliate of the
Company, Americable or North Star; or
(iii) any other corporate reorganization or business
combination in which more than fifty percent (50%) of the Company's outstanding
voting stock is transferred to different holders in a single transaction or a
series of related transactions (such a transfer of the voting stock of
Americable or North Star shall not, however, constitute a Corporate Transaction
for purposes of this Agreement), except (A) to an Affiliate of the Company,
Americable or North Star or (B) as part of a public offering of the Company's
Common Stock.
(d) "Employment Agreement" shall mean the Employment Agreement
between Xxxx and the Company of even date herewith.
(e) "Initial Public Offering" shall mean the first public offering
of the Company's Common Stock registered with the Securities and Exchange
Commission or the securities division of any state, or an offering made to the
public pursuant to an exemption from registration.
(f) "Shares" shall mean shares of Common Stock of the Company.
(g) "Subsidiary" or "Subsidiaries" means a subsidiary corporation
or corporations as defined in Section 425 of the Code.
(h) "Successor" means the legal representative of the estate of
Xxxx or the person or persons who acquire the right to exercise the Option by
bequest or inheritance or by reason of the of death of Xxxx.
(i) "Affiliate" shall include, with respect to any party, any
Person which directly or indirectly controls, is controlled by, or is under
common control with such party.
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(j) "Person" shall mean any natural person, corporation, firm,
association, partnership, joint venture, government, governmental agency or any
other entity, whether acting in an individual fiduciary or other capacity.
(k) "Disability" or "Disabled" shall have the same meaning as
defined in the "Employment Agreement".
3. Grant of Option. The Company hereby grants to Xxxx an option (the
"Option") to purchase up to Forty-seven (47) Shares of the Company's Common
Stock, which the Board of Directors of the Company has reserved for issuance
pursuant hereto (such Shares constituting, in the aggregate, approximately 4.5%
of the then outstanding Shares of the Company).
4. Exercise of Option.
(a) Exercise Dates. Except as otherwise provided in this
Section 4, this Option shall only be exercisable under the following schedule,
each date being hereinafter referred to as an "Exercise Date".
Exercise Date Number of Shares Exercisable
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May 1, 1992 27
December 31, 2001 20
(b) Exercise Price. The per Share exercise price of the
Option (the "Exercise Price") shall be the Book Value per Share as of March 31,
1992, which the Board of Directors of the Company has determined to be One
Thousand Four Dollars ($1,004.00) per Share, and which the Board of Directors
has determined to be the fair market value per share of Common Stock on the
date of grant.
(c) Full-time Employment Necessary. Except as provided in
Section 4(d), Xxxx must be a full-time employee of the Company (within the
terms of the Employment Agreement) from the effective date of this Agreement
through each of the Exercise Dates specified in subsection (a) above, in order
to exercise the Option with respect to the applicable Shares on each respective
Exercise Date.
(d) Duration of Options. Each portion of the Option herein
granted is exercisable on its respective Exercise Date as set forth in Section
4(a) (and subject to acceleration of the Exercise Date as provided in Section
4(e) hereof), and shall be exercisable until April 30, 2002, except as provided
in Section 5(a) and except that in the event of Xxxx'x termination of
employment (regardless of the reason for termination), death, or disability,
that portion of the Option which was otherwise exercisable as of the date of
termination, death, or permanent disability or which
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otherwise becomes exercisable within ninety (90) days of such date, may be
exercised for a period of ninety (90) days following the date of termination,
death or disability, or until May 31, 2002, whichever date first occurs.
(e) Acceleration of Portion of Option. In the event that the
Company achieves 100% of the financial target during 1992, as set forth on
Exhibit A to the Employment Agreement, then one-half (ten shares) of the Shares
subject to the portion of the Option which becomes exercisable December 31,
2001 shall become immediately exercisable March 15, 1993; subject, however, to
all of the terms and conditions set forth herein with respect to the Option.
In the event that the Company achieves 100% of the financial target during
1993, as set forth on Exhibit A to the Employment Agreement, then one-half (ten
shares) of the shares subject to the portion of the Option which becomes
exercisable December 31, 2001 shall become immediately exercisable March 15,
1994; subject, however, to all of the terms and conditions set forth herein
with respect to the Option.
(f) Adjustment. This Option and each separately exercisable
portion thereof shall be subject to adjustment as provided in Section 5(a).
(g) Vesting of Shareholder Rights. Neither Xxxx nor his
Successor shall have any of the rights of a shareholder of the Company
untilDoan or hisSuccessor exercises theOption or portionthereof as
providedherein and paysthe fullconsideration for allShares purchased.
(h) Nontransferability of Option. The Option shall not be
transferable or assignable by Xxxx, otherwise than by will or by laws of
descent and distribution and the Option and each portion thereof shall be
exercisable, during Xxxx'x lifetime, only by him. The Option shall not be
pledged or hypothecated in any way and the Option shall not be subject to
execution, attachment, or similar process.
5. Adjustments
(a) In the event that following a recapitalization,
reclassification, stock split-up, combination of shares, or dividend or other
distribution payable in capital stock, the outstanding Shares of Common Stock
of the Company are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares of other securities of the
Company or of another corporation, appropriate adjustment shall be made by the
Board of Directors of the Company in the number and kind of shares as to which
this Option, or portions thereof then unexercised, shall be exercisable, to the
end that the proportionate interest of the holder of the Option shall, to the
extent practicable, be maintained as before the occurrence of such event. Such
adjustment in outstanding options shall be made without change
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in the total price applicable to the unexercised portion of the Option but with
a corresponding adjustment in the Exercise Price per share.
(b) In the event of the dissolution or liquidation of the
Company or a Corporate Transaction, the Option granted under this Agreement
shall terminate as of the effective date of such dissolution, liquidation or
Corporate Transaction as determined by the Board of Directors of the Company
(the "Option Termination Date"), provided that not less than 30 days' written
notice of the Option Termination Date so fixed shall be given to Xxxx, and Xxxx
shall have the right prior to the Option Termination Date to exercise the
Option granted hereunder to the extent such Option is then, or will become
prior to the Option Termination Date exercisable, but less any Shares
previously purchased pursuant to the Option, subject to adjustments.
(c) If the Company is a party to any merger or other business
combination, which does not constitute a Corporate Transaction, then this
Option, if outstanding immediately after such merger or other business
combination, shall be appropriately adjusted, by the Board of Directors of the
surviving entity, to apply and pertain to the number and class of securities
that would be issuable to Xxxx in the consummation of such merger or business
combination if the Option were exercised immediately prior to such merger or
business combination, and appropriate adjustments shall also be made to the
Option Exercise Price, provided the aggregate Exercise Price payable hereunder
shall remain the same.
(d) This Agreement shall not in any way affect the right of
the Company to adjust, reclassify, reorganize or otherwise make changes in its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
6. Method of Exercising Option.
(a) In order to exercise the Option or any part thereof Xxxx
(or, in the case of exercise after his death, his Successor) must take the
following actions:
(i) Execute and deliver to the Company a Stock Purchase
Agreement in the form of Exhibit A to this Agreement (the "Stock Purchase and
Shareholder's Agreement," hereinafter the "Purchase Agreement," which Purchase
Agreement the Company also agrees to execute and deliver to Xxxx.
(ii) Pay the aggregate Option Exercise Price for the purchased
Shares in cash.
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(iii) Furnish to the Company appropriate documentation
that the person or persons exercising the Option, if other than Xxxx, have the
right to exercise the Option.
(b) This Option shall be deemed to have been exercised with
respect to the number of Shares specified in the Purchase Agreement at such
time as the executed Purchase Agreement for such Shares shall have been
delivered to the Company. Payment of the Option Exercise Price for the Shares
shall immediately become due and shall accompany the Purchase Agreement. As
soon thereafter as practical, the Company shall mail or deliver to Xxxx or to
the other person or persons exercising the Option a certificate or certificates
representing the Shares so purchased and paid for, with the appropriate legends
affixed thereto.
(c) In no event may the Option be exercised for any
fractional Shares.
7. Compliance with Laws and Regulations.
(a) The exercise of the Option and the issuance of Shares
upon such exercise shall be subject to compliance by the Company and Xxxx with
all applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange on which shares of the Company's Common Stock
may be listed at the time of such exercise and issuance.
(b) In connection with the exercise of the Option Xxxx shall
execute and deliver to the Company such representations in writing as may be
reasonably requested by the Company in order for it to comply with the
applicable requirements of federal and state securities laws.
8. Waivers, Amendments. etc. No amendment to or waiver of any
provision of this Agreement shall be binding unless in writing and executed by
the Company (with the approval of the Board of Directors of the Company) and
Xxxx. No failure or delay on the part of any party in exercising any power or
right under this Agreement or any instrument executed pursuant hereto shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power or right preclude any other or further exercise of any such power or
right.
9. Notices. All communications and notices provided under this
Agreement or any instrument executed pursuant hereto shall be in writing and
sent by first class certified mail, and if to the Company, addressed and
delivered to it at:
Transition Engineering, Inc.
0000 Xxxx 00xx Xxxxxx
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Xxxxxxxxxxx, XX 00000
With a copy to:
North Star Universal, Inc.
610 Park National Bank Building
0000 Xxxxxxx Xxxxxxxxx
Xx. Xxxxx Xxxx, Xxxxxxxxx 00000
Attention: President
and if addressed or delivered to Xxxx at:
Xxxx X. Xxxx
0000 Xxxx Xxxxxx, Xx. 000
Xxxxx, XX 00000
or to any party at such other address as may be designated by such party in a
notice to the other parties. Any notice, if mailed properly addressed, shall
be deemed given on the third business day after mailing postage prepaid.
10. Severability. Any provision of this Agreement or any
instrument executed pursuant hereto which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability of such provision in any other
jurisdiction.
11. Cross References. References in this Agreement or in any
instrument executed pursuant hereto to any section or article are, unless
otherwise specified, to such section or article of this Agreement or such
instrument, as the case may be.
12. Headings. The various headings of this Agreement and of any
Instrument executed pursuant hereto are inserted for convenience only and shall
not affect the meaning or interpretation of this Agreement of such Instrument
or any provisions hereof or thereof.
13. Counterparts. This Agreement may be executed by the parties
hereto in counterparts, each of which shall be deemed to be an original and all
of which shall constitute together but one and the same agreement.
14. Governing Law. This Agreement, and each other instrument
executed pursuant hereto shall each be governed by and construed in accordance
with, the laws of the State of Minnesota, and Xxxx submits to the personal
jurisdiction of the
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federal and state courts located in such state in connection with all actions,
matters and disputes in any way related hereto.
15. Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors, heirs and assigns except that Xxxx may not assign or transfer his
rights hereunder without the prior written consent of the Company.
16. Prior Agreements. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof and supersedes
all prior agreements and understandings, whether oral or written, with respect
to any right of Xxxx to acquire an interest in the Company, specifically
including that certain Transition Engineering, Inc. Employment Agreement, dated
January 29, 1988, that may or may not have been executed by Xxxx and the
Company, but which Xxxx and the Company agree is hereby terminated, void and of
no further force or effect. Except for that certain Employment Agreement, of
even date herewith, between the Company and Xxxx, the parties hereto have made
no agreements, representations or warranties relating to the subject matter of
this Agreement that are not set forth herein.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date above first written.
TRANSITION ENGINEERING, INC.
By: /s/
--------------------------------
/s/ Xxxx X. Xxxx
--------------------------------
Xxxx X. Xxxx
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EXHIBIT A
STOCK PURCHASE AND SHAREHOLDERS' AGREEMENT
This Agreement (this "Agreement') is made as of the _______ day of
____________, 199__, by and between Transition Engineering, Inc., a Minnesota
corporation (the "Company"), and Xxxx X. Xxxx ("Xxxx").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Stock Option Agreement, dated as of May
1, 1992, the Company granted to Xxxx an option to purchase up to Forty-seven
(47) Shares of the Company's common stock, no par value (the "Common Stock"),
subject to certain adjustments as provided therein;
WHEREAS, with the execution of this Agreement Xxxx has purchased
___________ Shares of Common Stock pursuant to said Option; and
WHEREAS, the Company, Americable, Inc., a Minnesota corporation
("Americable"), the Company's shareholder, and North Star Universal, Inc., also
a Minnesota corporation ("North Star"), the ultimate parent company of
Americable, and the Company, wish to prevent other persons who may be either
unwilling or unable to contribute to the success of the Company from owning its
Shares, by restricting the ownership thereof in the manner herein provided.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other valuable consideration, the parties agree as follows:
1. Definitions: As used throughout this Agreement, the terms defined
below shall have the following respective meanings (such definitions to be
equally applicable to the singular and plural forms thereof):
(a) "Americable" shall mean Americable, Inc., a Minnesota
corporation, which is a wholly owned subsidiary of North Star and
presently the sole shareholder of the Company.
(b) "Employment Agreement" shall mean the Employment Agreement
between Xxxx and the Company, dated as of June 1, 1992.
(c) "Instrument" shall mean any document or writing (whether a
formal agreement, letter or otherwise) under which any obligation is
evidenced, assumed or undertaken.
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(d) The term "Involuntary Transfer" means any transfer or
disposition of shares under judicial order, legal process, execution,
attachment, or enforcement of a pledge, trust, or other security interest.
(e) The term "Involuntary Transferee" means any one who acquires
an interest in or title to any Shares by virtue of any Involuntary
Transfer.
(f) The term "Successor" means the legal representative of the
estate of Xxxx or the person or persons who acquire the right to exercise
an option by bequest or inheritance or by reason of the death of Xxxx.
(g) The term "Shares" means shares of Common Stock of the Company,
no par value per share and includes the shares presently outstanding and
all common shares which may hereafter be issued by it.
(h) The term "Shareholders" means Americable and Xxxx, or any
successors.
(i) "Stock Option Agreement" shall refer to the Stock Option
Agreement, dated June 1, 1992, between Xxxx and the Company.
(j) The terms "Transfer," "Dispose," or any similar term shall
mean any sale, exchange, gift, bequest, pledge, security interest, or
other alienation or disposition of any shares of the Company or any
interest therein, including any distribution by an executor,
administrator, or trustee.
(k) The term "Book Value" shall refer to the assets of the
Company, less its liabilities (but excluding long term liabilities owed to
Americable, North Star or other Affiliates of the Company), all as
determined by generally accepted accounting principals.
(l) The term "Book Value Per Share" shall mean the Book Value of
the Company divided by its then outstanding number of Shares.
(m) The terms "Disability" and "Disabled" shall have the same
meaning as defined in the Employment Agreement.
(n) The term "Initial Public Offering" shall mean the first public
offering of the Company's Shares registered with the Securities and
Exchange Commission or the securities division of any state, or an
offering made to the public pursuant to an exemption from registration.
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(o) The term "Affiliate" shall include, with respect to any party,
any Person which directly or indirectly controls, is controlled by, or is
under common control with such party.
(p) The term "Person" shall mean any natural person, corporation,
firm, association, partnership, joint venture, government, governmental
agency or any other entity, whether acting in an individual, fiduciary or
other capacity.
(q) The term "Corporate Transaction" shall have the same meaning
as defined in Section 2(c) of the Stock Option Agreement.
2. Exercise of Option.
(a) Exercise. Xxxx hereby purchases ____________ Shares (the
"Purchased Shares") at an exercise price of $______________ per Share,
(the "Exercise Price") pursuant to the Stock Option Agreement.
(b) Payment. Concurrently with the delivery of this Agreement to
the Company, Xxxx shall pay the Exercise Price for the Purchased Shares in
accordance with the provisions of the Stock Option Agreement and shall
deliver whatever additional documents may be required by the Stock Option
Agreement as a condition for exercise.
3. Investment Representations.
(a) Investment Intent. Xxxx hereby warrants and represents that
he is acquiring the Purchased Shares for his own account and not with a
view to their resale or distribution and that he is prepared to hold the
Purchased Shares for an indefinite period and has no present intention to
sell, distribute or grant any participating interests in the Purchased
Shares. Xxxx hereby acknowledges the fact that the Purchased Shares have
not been registered under the Securities Act of 1933, as amended (the
"1933 Act"), and that the Company is issuing the Purchased Shares to him
in reliance on the representations made by him herein.
(b) Restricted Securities. Xxxx hereby confirms that he has been
informed that the Purchased Shares may not be resold or transferred unless
the Purchased Shares are first registered under the Federal securities
laws or unless an exemption from such registration is available.
Accordingly, Xxxx hereby acknowledges that he is prepared to hold the
Purchased Shares for an
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indefinite period and that he is aware that Rule 144, as promulgated under
the 1933 Act, is not presently available to exempt the sale of the
Purchased Shares from the registration requirements of the 1933 Act.
Should Rule 144 subsequently become available, Xxxx is aware that any sale
of the Purchased Shares effected pursuant to Rule 144 may, depending upon
the status of Xxxx as an "affiliate" or "non-affiliate" under the rule, be
made only in limited amounts in accordance with the provisions of the
rule, and that in no event may any Purchased Shares be sold pursuant to
Rule 144 until Xxxx has held the Purchased Shares for the requisite
holding period following payment of the Option Price for the Purchased
Shares.
4. Restrictions on Sale or Transfer.
(a) General Prohibition on Transfer. Until such time as the
Company has successfully completed an Initial Public Offering, neither
Xxxx, his Successor, or his Involuntary Transferee shall dispose of,
encumber, or transfer any of the Company's Shares now owned or in the
future acquired, without the Company's prior written consent and the
Shares must be transferred as set forth in subparagraph (b) below. Any
purported transfer or disposition of Shares in violation of the terms of
this Agreement shall be void, and the Company shall not recognize or give
any effect to such transaction.
(b) Granting of Certain Purchase and Sale Rights Regarding the
Shares.
(i) Type A Events - Procedures.
(A) Type A Events. Upon the occurrence of any of the
following ("Type A Events"):
(1) death of Xxxx;
(2) disability of Xxxx;
(3) any termination of Xxxx'x employment with the
Company after December 31, 1994, except for termination
by the Company pursuant to Section 9.01(b)(ii), (iii) or
(iv) of the Employment Agreement;
(4) any termination of Xxxx'x employment with the
Company on or before December 31, 1994, if such
termination
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is made by the Company pursuant to Section 9.01(c) of the
Employment Agreement; and
(5) delivery to Xxxx of written notice from the
Company of an impending Corporate Transaction, which
shall be provided not later than thirty (30) days prior
to the good faith estimated effective date thereof;
provided, however, that the Put sale right granted to
Xxxx and his Successor and the Call purchase right
granted to the Company shall be exercised not later than
5 days prior to the effective date of the Corporate
Transaction as set forth in the written notice to Xxxx
and shall be closed and payment in full received by the
appropriate party on or before the effective date of the
Corporate Transaction referred to in such notice,
then (y) Xxxx or his Successor will have the right to sell
(hereinafter referred to as "Put") to the Company, all of the
Shares then held or purchasable by Xxxx or his Successor in
which case the Company will be obligated to purchase such
Shares, and (z) the Company shall have the right to purchase
(hereinafter referred to as "Call") from Xxxx or his Successor
all of the Shares then held or purchasable by Xxxx or his
Successor, in which case Xxxx or his Successor will be
obligated to sell such Shares.
(B) Price. The per Share price of the Put and Call
rights of the parties upon the occurrence of a Type A Event
(the "Type A Event Price") shall be the Book Value Per Share
as of the last day of the month prior to the occurrence of the
Type A Event.
(C) Exercise of Put. Xxxx, or his Successor shall
have ninety days following the occurrence of a Type A Event,
except as otherwise provided in Section 3(b)(i)(A)(5), to
exercise the Put by forwarding written notice to the Company.
(D) Exercise of Call. The Company shall have ninety
days following the occurrence of a Type A Event, except as
otherwise provided in Section 3(b)(i)(A)(5) (the "Call
Period") to exercise the Call by forwarding written notice to
Xxxx or his Successor. Pursuant to the Call purchase right of
the Company, the Company shall have the right at any time
during the Call Period to purchase the Shares held by Xxxx or
his Successor, and the portion of the Option then exercisable
but which is unexercised. The purchase
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price for the Option shall be the product of (i) the number of
Shares that may be purchased pursuant to that portion of the
Option that is then exercisable (less any Shares previously
purchased pursuant to the exercise of the Option) times (ii)
the difference of (A) the per Share Purchase Price of the Call
purchase right minus (B) the per Share Exercise Price (or
weighted average thereof) of the portion of the Option then
exercisable but unexercised.
(E) Payment and Closing. Subject to the requirements
of Section 3(b)(i)(A)(5), the parties shall close the purchase
within 60 days of the exercise of the Put or Call, and the
Company shall pay the full purchase price at the closing.
(F) Lapse. The Put sale right and Call purchase right
shall terminate whether or not it has then become exercisable,
on the date of closing of the Initial Public Offering.
(ii) Type B Events - Procedures.
(A) Type B Events. Upon the occurrence of any of the
following ("Type B Events"):
(1) any termination of Xxxx'x employment with the
Company on or before December 31, 1994, except for any
termination which constitutes a Type A Event;
(2) any termination of Xxxx'x employment with the
Company, after December 31, 1994, if such termination is
made by the Company pursuant to Section 9.01(b)(ii),
(iii) or (iv) of the Employment Agreement,
then (i) Xxxx or his Successor will have the right to sell
(hereinafter referred to as "Put") to the Company, all of the
Shares then held or purchasable by Xxxx or his Successor in
which case the Company will be obligated to purchase such
Shares, and (ii) the Company shall have the right to purchase
(hereinafter referred to as the "Call") from Xxxx or his
Successor all of the Shares then held or purchasable by Xxxx
or his Successor, in which case Xxxx or his Successor will be
obligated to sell such Shares.
(B) Price. The price per Share of the Put and Call
rights of the parties upon the occurrence of a Type B Event
shall be the applicable
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Exercise Price, as defined in the Stock Option Agreement, paid
by Xxxx with respect to the Shares.
(C) Exercise of Put. Xxxx, or his Successor shall
have ninety days following the occurrence of a Type B Event to
exercise the Put sale right by forwarding written notice to
the Company.
(D) Exercise of Call. The Company shall have ninety
days following the occurrence of a Type B Event to exercise
the Call purchase right by forwarding written notice to Xxxx
or his Successor. Pursuant to the Call purchase right of the
Company, the Company shall have the right at any time during
the Call Period to purchase the Shares held by Xxxx or his
Successor and the portion of the Option then exercisable but
which is unexercised. The purchase price for the portion of
the Option then exercisable but unexercised shall be $1.00.
(E) Payment and Closing. The Company and Xxxx shall
close the purchase within 60 days of the exercise of the Put
or Call, and the Company shall pay the full purchase price at
closing.
(F) Lapse. The Put and Call shall, terminate whether
or not it has then become exercisable, on the date of closing
of the Initial Public Offering.
(iii) Involuntary Transfer. In the case of an
Involuntary Transfer from Xxxx at any time prior to the completion
of an Initial Public Offering, the Involuntary Transferee, shall,
within thirty days of the Involuntary Transfer, offer to sell all of
the Shares acquired to the Company. The offer shall be at the
applicable Exercise Price per Share. The Company shall close the
purchase within 60 days of the offer, and shall pay the full
purchase price at the closing.
5. Delivery of Shares and Documents. At the closing of any sale,
hereunder, the seller shall deliver to the Company, in exchange for the
Company's payment, the certificates for the transferred Shares endorsed for
transfer. In addition, the seller shall deliver to the Company all documents
reasonably required by the Company's counsel including, without limitation,
assignments, certificates of authority, tax releases, consents to transfer
instruments, and evidence of the seller's title and of his compliance with this
Agreement.
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6. Specific Performance. The Shareholder(s) then holding Shares may
institute and maintain a proceeding to compel specific performance against an
Involuntary Transferee or any other person who fails, after 30 days' notice, to
comply with the terms of this Agreement. For purposes of this provision, such
default shall occur in any of the following cases: the person fails to give a
notice, make an offer, sell Shares, or close a sale; an Involuntary Transferee
fails to disclose that Shares were acquired; the person fails to disclose to
the Shareholder(s) then holding Shares the name of anyone to whom and terms on
which he has transferred or disposed of the Shares.
7. Endorsement on Certificates of Terms of this Agreement. Each
certificate for Shares now held or hereafter issued shall be endorsed as
follows:
"Any transfer or disposition of the Shares evidenced by this
certificate is subject to the restrictions and option stated in, and
such Shares are transferable only upon compliance with, the
provisions of an agreement dated as of April 1, 1992, between the
Company and all of its shareholders. A copy of such agreement is on
file at the office of the Company and the provisions thereof are
incorporated herein by reference."
"The shares represented by this certificate have not been registered
under the Securities Act of 1933. The shares have been acquired for
investment and may not be sold or offered for sale in the absence of
(a) an effective registration statement for the shares under such
Act, (b) a 'no action' letter of the Securities and Exchange
Commission with respect to such sale or offer, or (c) satisfactory
assurances to the Company that registration under such Act is not
required with respect to such sale or offer."
8. Terms of Agreement. This Agreement shall remain in force until
terminated in writing by all of the Shareholders then holding shares.
9. Waivers, Amendments, etc. No amendment to or waiver of any
provision of this Agreement shall be binding unless in writing and executed by
the Company and Xxxx. No failure or delay on the part of any party in
exercising any power or right under this Agreement or any Instrument executed
pursuant hereto shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise of any such power or right.
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10. Notices. All communications and notices provided under this
Agreement or any Instrument executed pursuant hereto shall be in writing and
sent by first class certified mail and if to the Company addressed or delivered
to it at:
Transition Engineering, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxx, XX 00000
With copy to:
North Star Universal, Inc.
610 Park National Bank Building
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
Attention: President
and if addressed or delivered to Xxxx at:
Xxxx X. Xxxx
0000 Xxxx Xxxxxx, Xx. 000
Xxxxx, XX 00000
or to any party at such other address as may be designated by such party in a
notice to the other parties. Any notice, if mailed properly addressed, shall
be deemed given on the third business day after mailing postage prepaid.
11. Severability. Any provision of this Agreement or any Instrument
executed pursuant hereto which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability of such provision in any other
jurisdiction.
12. Cross-References. References in this Agreement or in any Instrument
executed pursuant hereto to any section or article are, unless otherwise
specified, to such section or article of this Agreement or such Instrument, as
the case may be.
13. Headings. The various headings of this Agreement and of any
Instrument executed pursuant hereto are inserted for convenience only and shall
not affect the meaning or interpretation of this Agreement of such Instrument
or any provisions hereof or thereof.
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14. Counterparts, Effectiveness, etc. This Agreement may be executed
by the parties hereto in counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
15. Governing Law. This Agreement, and each other instrument executed
pursuant hereto shall each be governed by and construed in accordance with, the
laws of the State of Minnesota and Xxxx submits to the personal jurisdiction of
the federal and state courts located in such state in connection with all
actions, matters and disputes in any way related hereto.
16. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors, heirs and assigns. Xxxx hereby expressly acknowledges that the
Company may assign any of its rights or obligations hereunder to Americable or
North Star.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date above first written.
TRANSITION ENGINEERING, INC.
By: __________________________________
Its: _____________________________
______________________________________
Xxxx X. Xxxx
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