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EXHIBIT 4.10
STOCK SUBSCRIPTION AGREEMENT
This Stock Subscription Agreement is made as of January 18, 1996 (the
"Effective Date") by and between Mercury Air Group, Inc., a New York corporation
("Mercury"), and Xxxx Xxxxxxxxxxx (the "Purchaser"), with reference to the
following:
R E C I T A L S
A. Purchaser is Vice President--Mercury Air Cargo, Inc.
B. Mercury desires to sell to Purchaser on the Effective Date and
Purchaser desires to subscribe for the purchase from Mercury at such time of
certain shares of the capital stock of Mercury as set forth in this Agreement.
C. In order to induce Mercury to sell such shares, Purchaser
desires to have such shares subject to the restrictions and interests created by
this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and mutual
covenants and conditions contained herein, the parties agree as follows:
8. Sale and Purchase of Stock. Mercury hereby agrees to sell to
Purchaser, subject to the conditions and restrictions contained in this
Agreement, and Purchaser hereby agrees to purchase from Mercury, Fifty Thousand
(50,000) shares (the "Shares") of the common stock, par value $.01 ("Common
Stock"), of Mercury, at a price of $8.125 per share for an aggregate purchase
price of Four Hundred Six Thousand Two Hundred Fifty Dollars ($406,250) (the
"Purchase Price"). Purchaser shall pay Forty Thousand Dollars ($40,000) of the
Purchase Price by check payable to Mercury and shall issue a secured promissory
note in the form attached hereto as Exhibit A (the "Note") to Mercury for Three
Hundred Sixty-Six Thousand Two Hundred Fifty Dollars ($366,250), the balance of
the Purchase Price. The Note shall be secured by a pledge of the Shares, the
terms and conditions of which are expressed in this Agreement.
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9. Restriction on Transfer of the Shares. Except as otherwise
provided herein, Purchaser may not sell, transfer, assign, pledge, hypothecate
or otherwise dispose of any of the Shares, or any right or interest therein,
during the term of this Agreement. Any purported sale, transfer (including
involuntary transfers initiated by operation of legal process), hypothecation or
disposition of any of the Shares or any right or interest therein, except in
strict compliance with the terms and conditions of this Agreement, shall be null
and void.
10. Repurchase Option Upon Termination.
(a) Vesting of Shares. For purposes of this Agreement, and
subject to Section 3(b) hereof, the Shares shall vest concurrent with any
payment made or deemed made under the Note such that at all times the percentage
of the total Shares vested shall equal the percentage which the total principle
amount of the Note repaid plus Forty Thousand Dollars ($40,000) is of the
Purchase Price. Notwithstanding the foregoing, no vesting of Shares shall be
deemed to occur prior to August 24, 1996.
(b) Mercury's Repurchase Option. In the event that Purchaser's
employment by Mercury terminates for any reason (including, without limitation,
voluntary resignation or dismissal by Mercury, with or without cause), prior to
the vesting of all of the Shares, Mercury shall purchase from Purchaser all of
the non-vested Shares (the "Repurchase"). The purchase price for any Shares to
be purchased pursuant to the Repurchase shall equal the price per share
originally paid for the Shares. The Shares shall be escrowed pursuant to this
Agreement to ensure Mercury's Repurchase.
(c) Adjustments of Repurchase Option. The purchase price for
any Shares to be purchased pursuant to the Repurchase shall be increased or
decreased appropriately to reflect any subdivision or combination of such Shares
or any dividend or distribution with respect to such Shares which has been paid
in additional shares of Common Stock. The Repurchase shall also apply to any
property or other securities issued with respect to unvested Shares; provided,
however, that such property or securities shall be deemed vested upon vesting of
the Shares with respect to which such property or securities were issued or when
the Shares with respect to which such property or securities were issued would
have vested. The number of Shares vested shall be
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increased or decreased appropriately to maintain the ratio between vested shares
and the paid portion of the Purchase Price set forth in paragraph (a) hereof in
connection with any subdivision or combination of such Shares or any dividend or
distribution with respect to such Shares which has been paid in additional
shares of Common Stock.
(d) Exercise of Repurchase Option. The Repurchase Option shall
be exercised by Mercury by delivering to Purchaser the canceled Note and on or
before January 18, 1997 (the vesting of the first installment of the Shares) a
check for an additional Forty-Thousand Dollars ($40,000).
11. Permitted Transfers. Purchaser may, at any time or times,
transfer any or all of the Shares: inter vivos to Purchaser's spouse or issue,
or to a trust for their benefit; provided, however, that such Shares shall not
be transferred until the Permitted Transferee executes a valid undertaking to
Mercury to the effect that the Shares so transferred shall thereafter remain
subject to all of the provisions of this Agreement (including the Repurchase in
the event Purchaser's employment by Mercury is terminated for any reason prior
to the vesting of the Shares) as though the Permitted Transferee were a party to
this Agreement, bound in every respect in the same way as Purchaser. The
restrictions on transfer set forth in this Agreement shall lapse upon vesting
with respect to all vested Shares.
12. Rights as Shareholder. Subject to compliance with the
provisions of this Agreement, Purchaser shall be entitled to vote the Shares and
receive all cash dividends while the Shares are held by Mercury's Corporate
Secretary pursuant to Section 9 of this Agreement; provided, however, that any
dividends or distributions with respect to the Shares in a form other than cash
shall be held by the Corporate Secretary of Mercury.
13. Investment Representations. Purchaser represents and warrants
to Mercury as follows:
(a) Purchaser is acquiring the Shares for his own account and
not with a view to or for sale in connection with any distribution of the
Shares.
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(b) Purchaser (I) is familiar with the business of Mercury,
(II) has had an opportunity to discuss with representatives of Mercury the
condition of any prospects for the continued operation and financing of Mercury
and such other matters as Purchaser has deemed appropriate in considering
whether to invest in the Shares, and (III) has been provided access to all
available information about Mercury requested by Purchaser.
(c) Purchaser understands that the Shares have not been
registered under the Securities Act of 1933, as amended (the "Act") or
registered or qualified under the securities laws of any state and that
Purchaser may not sell or otherwise transfer the Shares unless they are
subsequently registered under the Act and registered or qualified under
applicable state securities laws, or unless an exemption is available which
permits sale or other transfer without such registration and qualification.
(d) Mercury agrees to register the Shares for resale under the
Act on Form S-3 in connection with the next Form S-8 registration statement
filed by Mercury.
14. No Contract of Employment or Bonus. Purchaser acknowledges and
agrees that this Agreement shall not be construed to give the Purchaser any
right to be retained in the employ of Mercury or any subsidiary of Mercury, and
that the right and power of Mercury or any subsidiary to dismiss or discharge
Purchaser (with or without cause) is strictly reserved. Mercury also reserves
the right from time-to-time to modify the bonus plan which applies to Purchaser
and to set bonus goals and targets in the sole discretion of the Compensation
Committee of the Board of Directors of Mercury.
8. Mercury Undertakings. Mercury hereby undertakes to forgive the
remaining unpaid balance of principal and interest on the Note in the event that
Purchaser remains continuously employed by Mercury or any subsidiary of Mercury
through January 18, 2006.
9. Pledge and Escrow.
A. Pledge and Escrow of Shares. Purchaser hereby grants to
Mercury a security interest in the Shares, pledges and hypothecates the Shares
to Mercury, and deposits the certificates evidencing the Shares (the
"Certificates") with Mercury's
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Corporate Secretary as collateral security for the payment by Purchaser of the
Note and the full, faithful and timely performance by Purchaser of all of its
other obligations under the Note and this Agreement. The Shares are also
delivered to Mercury's Corporate Secretary pursuant to the terms of this
Agreement to be held in escrow in order to ensure performance of the Repurchase
as and when such right becomes exercisable. The Certificates, together with a
stock assignment duly executed in blank with signatures appropriately guaranteed
or witnessed, are being retained by Mercury's Corporate Secretary, as the
pledgeholder and escrow holder for the Shares.
B. Partial Release. Any shares which vest in accordance with
Section 3 of this Agreement shall be released to Purchaser and shall no longer
be subject to the terms of the pledge and escrow provided in this Agreement.
Shares shall also be transferred to the extent necessary to effect a transfer
permitted pursuant to Section 4 of this Agreement; provided, however, that the
transferee shall execute an agreement comparable to this Agreement with respect
to the transferred Shares.
C. Rights on Default. Upon the occurrence of any a Default as
provided in the Note or following any event which gives rise to the Repurchase,
Mercury shall have the right to repurchase the Shares and cancel the Note in
accordance with the Note and this Agreement. Mercury shall not be entitled to
collect any deficiency with respect to the Note. Purchaser shall have no right
to redeem the Shares by paying amounts otherwise due under the Note.
D. Termination. The pledge and escrow created by this Agreement
shall terminate upon the payment in full of the principal amount and all accrued
interest thereon under the Note. Upon termination of the pledge and escrow
created by this Agreement, Purchaser shall be entitled to the return of the
Certificates and any other collateral security then held by the Corporate
Secretary of Mercury pursuant to this Agreement.
10. Miscellaneous.
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(a) Legends on Certificates. Any and all certificates now or
hereafter issued evidencing Shares which have not vested shall have endorsed
upon them a legend substantially as follows:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS UPON TRANSFER AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT IN ACCORDANCE
WITH THE TERMS AND CONDITIONS OF THAT CERTAIN STOCK SUBSCRIPTION
AGREEMENT DATED AS OF JANUARY 18, 1996 BETWEEN MERCURY AIR GROUP, INC.,
A NEW YORK CORPORATION, AND XXXX XXXXXXXXXXX, A COPY OF WHICH AGREEMENT
IS ON FILE AT THE PRINCIPAL OFFICE OF MERCURY AIR GROUP, INC.
Such certificates shall also bear such legends and shall be subject to such
restrictions on transfer as may be necessary to comply with all applicable
federal and state securities laws and regulations.
(b) Further Assurances. Each party hereto agrees to perform
any further acts and execute and deliver any document which may be reasonably
necessary to carry out the intent of this Agreement.
(c) Binding Agreement. This Agreement shall bind and inure to
the benefit of the successors and assigns of Mercury and the personal
representatives, heirs and legatees of Purchaser.
(d) Other Restrictions on Transfers. The restrictions on
transfer set forth in this Agreement are in addition to any and all restrictions
imposed pursuant to any applicable state or federal law or regulation.
(e) Notices. Any notice required or permitted to be given
pursuant to this Agreement shall be in writing and shall be deemed given upon
personal delivery or, if mailed, upon the expiration of 48 hours after mailing
by any form of United States mail requiring a return receipt, addressed (I) to
Purchaser at the address set forth on the signature page hereof and (II) to
Mercury Air Group, Inc., 0000 XxXxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000. A
party may change its address by giving written notice to the other parties
setting forth the new address for the giving of notices pursuant to this
Agreement.
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(f) Amendments. This Agreement may be amended at any time by
the written agreement and consent of the parties hereof.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
(h) Disputes. In the event of any dispute among the parties
arising out of this Agreement, the prevailing party shall be entitled to recover
from the nonprevailing party the reasonable expenses of the prevailing party,
including, without limitation, reasonable attorneys' fees.
(i) Entire Agreement. This Agreement, including the agreements
referred to herein, constitute the entire agreement and understanding among the
parties pertaining to the subject matter hereof and supersedes any and all prior
agreements, whether written or oral, relating thereto.
(j) Recapitalizations or Exchanges Affecting Mercury's Capital
Stock. The provisions of this Agreement, including the pledge and escrow
arrangement contained in Section 9 hereof, shall apply, to the full extent set
forth herein with respect to the Shares, to any and all shares of capital stock
or other securities or property of Mercury or any successor or assign of Mercury
(whether by merger, consolidation, sale of assets, or otherwise) which may be
issued in respect of, in exchange for, or in substitution of, the Shares
originally issued to Purchaser, by reason of any stock dividend, split, reverse
split, combination, recapitalization, reclassification, merger, consolidation or
otherwise.
(k) Headings. Introductory headings at the beginning of each
section of this Agreement are solely for the convenience of the parties and
shall not be deemed to be a limitation upon or description of the contents of
any such section.
(l) Term. This Agreement commences on the date hereof and
terminates upon the earlier of vesting of all Shares or Repurchase of all
Shares.
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(m) Counterparts. This Agreement may be executed in two or
more counterparts, all of which, when taken together, shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
MERCURY AIR GROUP, INC.
By: ______________________________
Its: _____________________________
PURCHASER
Xxxx Xxxxxxxxxxx
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Signature
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Name
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Xxxxxx Xxxxxxx
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Xxxx Xxxxx Zip Code
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