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Exhibit 10.42
MANAGEMENT STOCK PURCHASE AGREEMENT
THIS MANAGEMENT STOCK PURCHASE AGREEMENT (this "Agreement") is made as
of December 30, 1999 (the "Effective Date") between Investcorp Werner Holdings
L.P., a Cayman Islands corporation ("IWH"), Xxxxxx Holding Co. (PA), Inc., a
Pennsylvania corporation (the "Company"), and the individual signatory hereto
("Buyer").
R E C I T A L S
A. Buyer is an employee of the Company or a Subsidiary (as defined
herein) and desires to acquire an equity interest in the Company.
B. The Company is willing to sell to Buyer shares of Class C Stock,
$0.01 par value, of the Company ("Class C Stock") subject to the terms and
conditions of this Agreement.
AGREEMENTS
1. DEFINITIONS. Capitalized terms used herein shall have the
following meanings:
"Act" means the Securities Act of 1933, as amended.
"Agreement" means this Management Stock Purchase Agreement.
"Approved Sale" means a transaction or a series of related
transactions which results in a BONA FIDE, unaffiliated change of economic
beneficial ownership of the Company or its business of greater than 50%
(disregarding for this purpose any disparate voting rights attributable to the
outstanding stock of the Company), whether pursuant to the sale of the stock of
the Company or a Subsidiary, the sale of the assets of the Company, or a merger
or consolidation (other than a sale of stock by an Initial Stockholder to
another Initial Stockholder, an affiliate thereof, or a non-U.S. entity with
respect to which an Initial Stockholder or an affiliate thereof has an
administrative relationship).
"Articles of Incorporation" means the Restated Articles of
Incorporation of the Company, as amended from time to time.
"Buyer" is defined in the preamble.
"Cause" has the meaning set forth in the Employment Agreement.
"Class C Stock" is defined in recital C.
"Closing Date" means November 24, 1997.
"Company" is defined in the preamble.
"Cost" means $2,421.29 per share.
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"Permanent Disability" has the meaning set forth in the
Employment Agreement.
"Effective Date" is defined in the preamble.
"Employment Agreement" means the Employment Agreement between
Buyer and Xxxxxx Co., a subsidiary of the Company dated as of May 26, 1999, as
amended from time to time.
"Endorsed Certificate" is defined in Section 4(a).
"Fair Market Value" means the value of a Share, as of the
Termination Date, determined pursuant to Section 4(d).
"Fiscal Year" means the fiscal year of the Company.
"Good Reason" has the meaning set forth in the Employment
Agreement.
"Initial Public Offering" means the sale of any of the common
stock of the Company pursuant to a registration statement that has been declared
effective under the Act, if as a result of such sale (i) the issuer becomes a
reporting company under Section 12(b) or 12(g) of the Securities Exchange Act of
1934, as amended, and (ii) such stock is traded on the New York Stock Exchange
or the American Stock Exchange, or is quoted on the NASDAQ National Market
System, or is traded or quoted on any other national stock exchange or national
securities system.
"Initial Stockholders" means the shareholders of the Company who
became shareholders as of the Closing Date (other than any such shareholders who
are also employees of the Company or were shareholders of the Company prior to
the Closing Date) and any transferees of such shareholders prior to an Approved
Sale or an Initial Public Offering.
"IWH" is defined in the preamble.
"permitted transferee" is defined in Section 3.
"person" means an individual, partnership, corporation, limited
liability company, trust, joint venture or other entity.
"Put Period" and "Put Right" are defined in Section 4(b).
"Repurchase Period" and "Repurchase Right" are defined in Section
4(a).
"Retirement" means age 65.
"Shares" is defined in Section 2.
"Subsidiary" means any joint venture, corporation, partnership or
other entity as to which the Company, whether directly or indirectly, has more
than 50% of the (i) voting rights
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or (ii) rights to capital or profits.
"Termination Date" means the date on which Buyer ceases to be
employed by the Company for any reason.
2. PURCHASE AND SALE OF SHARES. On the terms and subject to the
conditions hereof, the Company hereby issues and sells to Buyer 725 shares of
Class C Stock of the Company (the "Shares") against payment therefor of
$2,421.29 cash per share.
3. RESTRICTIONS ON TRANSFERS OF SHARES; PERMITTED TRANSFEREES.
Prior to 180 days following an Initial Public Offering, the Shares shall not be
transferable or transferred, assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) except that Buyer may transfer the
Shares (i) to his or her spouse, child, estate, personal representative, heir or
successor or to a trust for the benefit of Buyer or his or her spouse, child or
heir or to a partnership the partners of which consist solely of the Buyer
and/or his or her spouse, child, heir and/or successor (a "permitted
transferee"), or (ii) pursuant to Section 4 hereof or Sections 4, 5 or 6 of
Article IV of the Articles of Incorporation. Buyer and the Company agree that
the provisions of Section 4 of Article IV of the Articles of Incorporation shall
apply to the Shares even though such provisions by their terms apply only to
Class A and Class B shares. This Agreement shall be binding on and enforceable
against any person who is a permitted transferee of the Shares, and for purposes
of Sections 4, 5, and 6, the rights and obligations relating to Shares owned by
Buyer shall extend as well to Shares owned by permitted transferees of Buyer
and, unless the context otherwise requires, each reference to Buyer in said
Sections shall encompass also permitted transferees of Buyer. The stock
certificates issued to evidence Shares hereunder shall bear a legend referring
to this Agreement and the restrictions contained herein.
4. REPURCHASE OF SHARES.
(a) In the event that Buyer ceases to be employed by the
Company for any reason prior to an Initial Public Offering or Approved Sale, the
Company, during the sixty (60) days following the Termination Date (subject to
Section 4(e))the "Repurchase Period"), shall have the right to purchase all, but
not less than all, of the Shares which have been beneficially owned by Buyer for
a period of at least six (6) months (the Repurchase Right"). The purchase price
for each Share shall equal Fair Market Value, or, if Buyer resigns without Good
Reason prior to January 1, 2002 or is terminated for Cause at any time, the
lower of Fair Market Value or Cost. If the Company elects to purchase the
Shares, it shall notify Buyer at or before the end of the Repurchase Period of
such election and the purchase price shall be paid in cash at a time set by the
Company within thirty (30) days after the end of the Repurchase Period, provided
that Buyer has presented to the Company a stock certificate evidencing the
Shares duly endorsed for transfer (the "Endorsed Certificate"). If Buyer fails
to deliver the Endorsed Certificate, the Shares represented thereby shall be
deemed to have been purchased upon (i) the payment by the Company of the
purchase price to Buyer or his or her permitted transferee or (ii) notice to
Buyer or such permitted transferee that the Company is holding the purchase
price for the account of Buyer or such permitted transferee, and upon such
payment or notice Buyer and such permitted transferee will have no further
rights in or to such Shares. the Company may assign its rights
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under this Section 4(a) IWH or to an affiliate of the Company. If the Shares are
not purchased pursuant to Section 4(a) or 4(b), the restrictions on transfer
thereof contained in this Agreement shall terminate and be of no further force
and effect.
(b) If Buyer's employment by the Company is terminated prior
to an Initial Public Offering or an Approved Sale (i) by the Company without
Cause or by Buyer for any reason; (ii) due to Buyer's Retirement, death or
Permanent Disability; or (iii) by the Company with Cause after January 1, 2002,
Buyer or his or her representative, during the 120 days following the
Termination Date (subject to Section 4(e), the "Put Period"), shall have the
right (the "Put Right") to require IWH to purchase all, but not less than all,
of the Shares then owned by Buyer, unless, by the thirtieth (30th) day after IWH
and the Company have received notice of Buyer's election to exercise the Put
Right, the Company has notified Buyer and IWH of its election, exercisable in
the discretion of the Company, to purchase the Shares on the same terms as such
Shares were to be purchased by IWH, in which case the Shares will be acquired by
the Company. The purchase price shall be at Fair Market Value, unless the
employment of Buyer is terminated for any reason other than Cause, Good Reason,
Retirement, death, or Permanent Disability prior to January 1, 2002 and Buyer
exercises the Put Right prior to such date, in which case the purchase price
will be the lower of Fair Market Value or Cost. The purchase price shall be paid
in cash at a time set by the Company or IWH, as applicable, within thirty (30)
days after the end of the Put Period, provided that IWH or the Company, as the
case may be, need not pay the purchase price until such later time that Buyer
presents to the Company or IWH, as applicable, the Endorsed Certificate.
(c) The Fair Market Value of Shares to be purchased by the
Company or IWH, as the case may be, hereunder shall be determined in good faith
by the Company's Board of Directors. The Board of Directors shall make its
determination of Fair Market Value annually (the "Annual Valuation") promptly
after the completion of the Company's audited financial statements for the year
then completed and such determination shall remain in effect until the Board of
Directors makes the next Annual Valuation. Notwithstanding the foregoing, if the
Board of Directors or an investment banker or appraiser appointed by the Company
makes a determination of Fair Market Value subsequent to an Annual Valuation,
such subsequent determination shall supersede the Annual Valuation then in
effect and shall establish the Fair Market Value until the next Annual
Valuation. The Fair Market Value shall be based on an assumed sale of 100% of
the outstanding capital stock of the Company (without reduction for minority
interest or lack of liquidity of the Shares or similar discount). If such
determination of the Fair Market Value is challenged by Buyer, a mutually
acceptable investment banker or appraiser shall establish the Fair Market Value
as of the date of valuation referenced in the Annual Valuation or a subsequent
determination. The investment banker's or appraiser's determination shall be
conclusive and binding on the Company and Buyer. The Company shall bear all
costs incurred in connection with the services of such investment banker or
appraiser unless the Fair Market Value established by such investment banker or
appraiser is less than 115% of the determination challenged by the Buyer, in
which case Buyer shall promptly pay or reimburse the Company for half of such
costs. If Buyer and the Company cannot agree upon an investment banker or
appraiser, they shall each choose an investment banker or appraiser and the two
shall choose a third investment banker or appraiser who shall establish the Fair
Market
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Value. Notwithstanding the foregoing, the Company shall obtain valuation
of all of its common stock at least once annually for purposes of Buyer's estate
and gift planning; provided, however, that such valuation is not binding on the
Board of Directors for purposes of determining Fair Market Value.
(d) Buyer shall not be considered to have ceased to be
employed by the Company for purposes of this Agreement if he continues to be
employed by the Company or a Subsidiary, or by a company of which the Company is
a Subsidiary.
(e) In the event that, on the Termination Date, any Shares
held by Buyer have been owned by Buyer for less than six (6) months, the
Repurchase Period and the Put Period for such Shares the Shares will not
commence on the Termination Date but rather will commence on the first date on
which all Shares have been owned by Buyer for six (6) months.
5. REPRESENTATIONS OF THE COMPANY. The Company represents and
warrants to Buyer as follows:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania.
(b) Upon issuance to Buyer in accordance with the terms
hereof, the Shares will be duly and validly authorized, issued and outstanding,
fully paid and non-assessable (without limiting any rights the Company or its
Subsidiary have pursuant to any loan documents).
(c) The Shares shall not be subject to dilution upon (i) the
conversion, pursuant to the terms of the Articles of Incorporation, of (A) any
of the Company's Class D Stock or Class E Stock, each with a par value of $0.01,
or (B) any of the Class C Stock, or (ii) the exercise of those certain warrants
issued by the Company on November 24, 1997 entitling the holder thereof to
purchase shares of the Company's common stock, $0.01 par value.
6. Representations and Acknowledgments of Buyer.
(a) Buyer hereby represents and warrants to the Company
as follows:
(i) Buyer is acquiring the Shares for investment for
his or her own account and without a view to further
distribution of the Shares.
(ii) Buyer is an employee of the Company and has been
given access to all information that Buyer considers necessary to make
an investment decision as to the Shares.
(b) Buyer hereby acknowledges to the Company as follows:
(i) The Shares are being acquired by Buyer without
registration under the Act pursuant to exemptions from registration
thereunder. Buyer cannot transfer the Shares except pursuant to an
effective registration statement or an exemption from
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registration under the Act.
(ii) The Shares are nonvoting under the Articles of
Incorporation and are otherwise subject to the Articles of
Incorporation.
7. GOVERNING LAW. All terms of and rights under this Agreement
shall be governed by and construed in accordance with the internal law of the
Commonwealth of Pennsylvania, without giving effect to principles of conflicts
of law.
8. NOTICES. All notices, requests, demands and other communications
pursuant to this Agreement shall be in writing and shall be deemed to have been
duly given if personally delivered, telexed or telecopied to, or, if mailed,
when received by, the other party at the following addresses (or at such other
address as shall be given in writing by either party to the other):
If to IWH to:
Investcorp Xxxxxx Holdings L.P.
X.X. Xxx 0000, Xxxx Xxxx Xxxxxxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx B.W.I.
With a copy to:
Investcorp Management Services Limited
x/x Xxxxxxxxxx Xxxx X.X.
X.X. Xxx 0000
Xxxxxx, Xxxxxxx
Attention: H. Xxxxxxx Xxxxxx, III
If to the Company to:
Xxxxxx Holding Co. (PA), Inc.
00 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
General Counsel
With a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: E. Xxxxxxx Xxxxxxx, Esq.
If to Buyer, to the address set forth on the signature page hereof.
9. AMENDMENTS AND WAIVERS. This Agreement may be amended, and any
provision
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hereof may be waived, only by a writing signed by the party to be charged.
10. CAPITALIZATIONS, EXCHANGES, ETC. AFFECTING SHARES; ADJUSTMENT
OF COST.
(a) The provisions of this Agreement shall apply to any and
all shares of capital stock of the Company or any successor or assign of the
Company that may be issued in respect of, in exchange for, or in substitution
of, the Shares by reason of any stock dividend, stock split, stock issuance,
reverse stock split, combination, recapitalization, reclassification, merger,
consolidation or otherwise, other than an Approved Sale. Nothing herein shall
prohibit or restrict the Company from taking any corporate action or engaging in
any corporate transaction of any kind, including, without limitation, any
merger, consolidation, liquidation or sale of assets.
(b) In the event of any stock dividend, stock split, stock
issuance, reverse stock split, combination, recapitalization, reclassification,
merger, consolidation or similar event as a result of which Buyer holds a lesser
or greater number of Shares and/or other securities, the Cost of a Share or
other security shall be appropriately adjusted as determined in good faith by
the Board of Directors of the Company.
11. ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement and understanding between the parties as to the subject matter hereof
and supersedes all prior oral and written and all contemporaneous oral
discussions, agreements and understandings of any kind or nature.
12. SEPARABILITY. In the event that any provision of this
Agreement is declared to be illegal, invalid or otherwise unenforceable by a
court of competent jurisdiction, such provision shall be reformed, if possible,
to the extent necessary to render it legal, valid and enforceable, or otherwise
deleted, and the remainder of this Agreement shall not be affected except to
the extent necessary to reform or delete such illegal, invalid or unenforceable
provision.
13. HEADINGS. The headings preceding the text of the sections
hereof are inserted solely for convenience of reference, and shall not
constitute a part of this Agreement, nor shall they affect its meaning,
construction or effect.
14. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
15. FURTHER ASSURANCES. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out
the provisions and purposes of this Agreement.
16. REMEDIES. Consistent with section 18 herein, in the event of a
breach by any party to this Agreement of its obligations under this Agreement,
any party injured by such breach, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, shall be entitled to
specific performance of its rights under this Agreement. The parties
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agree that the provisions of this Agreement shall be specifically enforceable,
it being agreed by the parties that the remedy at law, including monetary
damages, for breach of any such provision will be inadequate compensation for
any loss and that any defense in any action for specific performance that a
remedy at law would be adequate is hereby waived.
17. NOT AN EMPLOYMENT CONTRACT. Nothing in this Agreement or any other
instrument executed pursuant hereto shall confer upon Buyer any right to
continue in the employ of the Company or any Subsidiary or shall affect the
right of the Company or any Subsidiary to terminate the employment of Buyer with
or without Cause.
18. ARBITRATION. Any dispute, claim or controversy arising out of or
relating to this Agreement, or the breach, termination or validity hereof, shall
be finally settled by arbitration in accordance with the then-prevailing
Commercial Arbitration Rules of the American Arbitration Association, as
modified herein ("Rules"). There shall be one arbitrator who shall be jointly
selected by the parties. If the parties have not jointly agreed upon an
arbitrator within twenty days of respondent's receipt of claimant's notice of
intention to arbitrate, either party may request the American Arbitration
Association to furnish the parties with a list of names from which the parties
shall jointly select an arbitrator. If the parties have not agreed upon an
arbitrator within ten days of the transmittal date of the list, then each party
shall have an additional five days in which to strike any names objected to,
number the remaining names in order of preference, and return the list to the
American Arbitration Association, which shall then select an arbitrator in
accordance with Rule 13 of the Rules. The place of arbitration shall be
Pittsburgh, Pennsylvania. By agreeing to arbitration, the parties hereto do not
intend to deprive any court of its jurisdiction to issue a pre-arbitral
injunction, pre-arbitral attachment or other order in aid of arbitration. The
arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. secs.
1-16. Judgment upon the award of the arbitrator may be entered in any court of
competent jurisdiction. Each party shall bear its or his own costs and expenses
in any such arbitration and one-half of the arbitrator's fees and expenses
provided that the arbitrator may but need not award the prevailing party
reasonable fees and expenses.
19. BINDING EFFECT. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective permitted successors
and assigns.
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IN WITNESS WHEREOF, this Agreement is entered into as of the date first
above written.
XXXXXX HOLDING CO. (PA), INC.
By:_________________________________
Name:
Title:
INVESTCORP WERNER HOLDINGS L.P.
By:_______________________________
Name:
Title:
"BUYER"
___________________________________
Name: Xxxxxx Xxxxxx
Address: 000 Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
No. of Shares of Class C
Stock acquired by Buyer: 1,000
Amount paid by Buyer: $2,421,290.00
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