FORM OF STOCK PURCHASE AGREEMENT
THIS AGREEMENT, made as of the _____ day of ______ , between NACO, Inc., a
Delaware corporation, having its principal place of business in Lisle, Illinois
("Corporation"), and _________, an individual, residing at ________,
_________,______________, ("Stockholder").
Whereas, concurrent with the execution of this Agreement, the Corporation
sold ______________ (_____________) shares of its common stock to Stockholder;
Whereas, Stockholder represents to the Corporation that he has conducted a
diligent investigation and has obtained all desired information and has
otherwise satisfied himself with respect to the business and financial condition
of the Corporation, the tax and other legal considerations relating to this
transaction or to the shares of stock being purchased, the present fair market
value of such shares and all other matters which Stockholder considers to be
relevant in connection with this transaction.
It is deemed by the parties hereto to be in the best interests of the
Corporation, and all of its stockholders, to enter into this Agreement so that
the number of persons owning stock in the Corporation might be limited.
NOW, THEREFORE, in consideration of the premises, which are incorporated
into and made an integral part of this Agreement, the issuance and sale of stock
of the Corporation to the Stockholder and the mutual promises and covenants
herein contained, it is hereby agreed as follows:
1. DEFINITIONS
(a) "Stock" - the term "Stock" shall mean the shares of common stock of
the Corporation identified herein including any securities issued in exchange
therefor or received on account of any stock dividend, reclassification or
recapitalization thereof.
(b) "Stockholder" - the term "Stockholder" shall mean the individual
stockholder executing this Agreement and the permitted assigns of such
Stockholder.
(c) "Employed" or "Employment" - the term "Employed" or "Employment" shall
mean the actual service as an Officer, Director or other employee of the
Corporation or any subsidiary or affiliate of the Corporation and its
subsidiaries.
2. REQUIREMENT OF OFFER TO SELL BY STOCKHOLDER. Except as otherwise
provided in Sections 11 and 13 hereof, if (i) the Stockholder shall cease for
any reason to be actively employed by the Corporation or (ii) the Stockholder
shall make any attempt to sell, pledge, donate or dispose of the stock in any
manner, Stockholder agrees to immediately deliver to the Corporation a written
offer (which offer shall state that it is irrevocable for a period of 30 days
after receipt by the Corporation) offering to sell the Stock for the price and
upon the terms set forth in this Agreement. Simultaneously with the offer,
Stockholder shall deliver to the Corporation (in the event the Corporation does
not then already have custody thereof) the certificates representing the Stock
together with stock transfer powers duly executed in blank. The Stockholder's
offer may be accepted by written notice to that effect given to the Stockholder
within such 30-day period. If the Stockholder shall fail to deliver the written
offer of sale as well as the stock certificates and stock transfer powers (if
the Corporation does not already have custody thereof), the Corporation shall be
deemed to have an exclusive assignable option to purchase the Stock at the price
and on the terms set forth in this Agreement for six (6) months after the last
to occur of (i) the date when such offer was required to have been delivered to
the Corporation, (ii) the date upon which the Corporation was informed of the
cessation of Stockholder's employment, (iii) the date upon which the Corporation
was informed of an attempted disposition of the Stock by Stockholder, or (iv)
the date upon which the Corporation makes demand upon the Stockholder as herein
provided. This option may be exercised by the Corporation by written notice
within such six-month period.
3. PRICE. The price to be paid for any Stock being sold by the
Stockholder pursuant to this Agreement shall be determined as soon as
practicable in the manner hereinafter provided and shall, subject to the
provisions of this Section 3, be an amount (without interest) equal to the fair
market value of such Stock as of the close of the last day (the "valuation
date") preceding the earliest to occur of the following dates:
(a) The date upon which the written offer of sale to the Corporation
pursuant to Section 2 was required to be delivered to the Corporation;
(b) The date upon which the Stockholder ceases to be actively employed by
the Corporation;
(c) The date upon which the Corporation makes written demand upon the
Stockholder to offer his stock for sale to the Corporation;
(d) The date upon which the Corporation exercises its option
to purchase the Stockholder's stock; or
(e) The date of the Stockholder's death.
In no event, however, shall the price for any portion of the Stock sold
pursuant to this Agreement exceed the Stockholder's cost if (i) Stockholder and
the Corporation cannot agree on the fair market value of such Stock and
Stockholder neglects or refuses to take any action required of Stockholder
within the time prescribed or pursuant to the procedure for determination of
fair market value set forth in Section 4 below; (ii) if Stockholder fails to use
his best efforts (including, but not limited to, prompt execution and delivery
to any appraiser of appropriate instructions to proceed with the appraisal,
guarantees of expenses, releases of appraiser's liabilities to Stockholder,
etc.) to cause
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a prompt determination of fair market value to be made in the manner
contemplated herein; (iii) if a determination of fair market value in
accordance with the procedure set forth herein is not in fact made within six
(6) months of the applicable valuation date; and (iv) with respect to the
percentage of the Stock set forth below, if Stockholder's continuous
employment ceased for any reason other than Stockholder's death or, at
the discretion of the Corporation, Stockholder's disability during the
applicable employment period set forth below:
Period of Continuous Percent of Stock To
EMPLOYMENT OF STOCKHOLDER BE RESOLD AT COST
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Less than one year 100%
One year or more but less than two years 80%
Two years or more but less than three years 60%
Three years or more but less than four years 40%
Four years or more but less than five years 20%
Five years or more 0
4. APPRAISAL OF STOCK. For purposes of this Agreement, the fair market
value of the Stock as of any valuation date shall be determined by agreement
between the Corporation and the Stockholder. In the event the Corporation
and the Stockholder cannot agree on the fair market value of such Stock within
thirty (30) days of the date on which the Corporation gives written notice
accepting an offer of sale or the date on which the Corporation gives notice of
the election to exercise the option as provided in Section 2 hereof, then the
fair market value of the Stock shall be determined by the following procedure:
(a) The Stockholder and the Corporation shall promptly indicate their
opinions in writing as to the fair market value of the Stock as of the
applicable valuation date.
(b) The Stockholder and the Corporation shall, within ten (10) days after
the expiration of the 30-day period referred to above, jointly appoint a
recognized investment banking firm or firm specializing in the appraisal of
shares of stock of private companies to act as an appraiser hereunder. If the
parties are unable to agree upon an appraisal firm, then each party shall
promptly appoint a recognized firm willing to act under these provisions and the
two firms so selected shall select another recognized firm which is willing and
shall act as the sole appraiser. In selecting the sole appraiser, the firms
appointed by Stockholder and the Corporation may consult with the parties hereto
but shall be entitled to make an independent selection of the appraiser and
shall have no
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liability to either party as a result of such selection.
(c) Following its selection, the appraiser shall promptly determine the
fair market value of the Stock as of the valuation date. In determining such
value, the appraiser shall apply such principles of valuation as it, in its
sole discretion, deems appropriate under all the circumstances. For this
purpose, fair market value shall mean the price at which the Stock would change
hands between a willing buyer and a willing seller, neither being under any
compulsion to buy or sell, but assuming, if the Stock was purchased by such a
buyer, that such a buyer would be subject to the same transfer and other
restrictions which are applicable to Stockholder.
(d) All costs incident to the selection of an appraiser and an appraisal
hereunder, including the fees of the appraiser, shall be borne by (i) the
Corporation if the difference between the fair market value determined by the
appraiser and the fair market value asserted in writing by the Corporation prior
to submission to the appraiser is greater than the difference between the fair
market value determined by the appraiser and the fair market value asserted by
the Stockholder in writing prior to submission to the appraiser, or (ii) the
Stockholder if the difference between the fair market value determined by the
appraiser and the fair market value asserted in writing by the Stockholder prior
to submission to the appraiser is greater than the difference between the fair
market value determined by the appraiser and the fair market value asserted by
the Corporation in writing prior to submission to the appraiser.
5. PAYMENT. If the Stockholder and the Corporation agree on the fair
market value of the Stock, the amount required to be paid for such Stock shall
be paid within sixty (60) days thereafter. In the event no agreement is
reached as to the fair market value of such Stock, the amount required to be
paid for such Stock shall be paid sixty (60) days after the determination of its
fair market value pursuant to the provisions of Section 3.
6. EFFECTING THE SALE. A sale by Stockholder hereunder shall be
effected by the delivery to the Corporation of a written offer to sell the
Stockholder's Stock together with certificates evidencing the Stock, duly
endorsed and stamped for transfer, (unless the Corporation already has custody
thereof) together with duly executed stock powers, and delivery by the
Corporation to the Stockholder of written notice to the effect that the
Corporation has elected to accept the Stockholder's offer of sale. In the event
the option provisions of Section 2 become effective, a sale hereunder shall be
effected by delivery by the Corporation to the Stockholder of a written notice
during the option period to the effect that the Corporation has elected to
exercise its rights thereunder. Any damages (including but not limited to
lost opportunities and out-of-pocket costs such as attorneys' fees) suffered by
the Corporation as the result of any delay in the delivery of any written offer,
notice, stock certificate or other document required to be delivered under this
Agreement shall be charged against the Stockholder and may be offset against any
amount or amounts otherwise payable to the Stockholder.
7. ELECTION NOT TO PURCHASE. Subject to the terms of Section 15, in the
event the Corporation elects not to accept an offer of sale by the Stockholder
or not to exercise its option rights
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as provided in Section 2 hereof, the Corporation shall then promptly deliver
to the Stockholder the certificate or certificates for the Stock of the
Stockholder so offered or subject to such option.
8. ACKNOWLEDGMENT OF DELIVERY. Stockholder is herewith delivering to
Corporation certificates representing the Stock together with stock transfer
powers subject to the terms of this Agreement. The Corporation shall have the
authority to transfer such Stock in accordance with the provisions hereof.
9. RESTRICTIONS ON TRANSFER. While this Agreement is in effect, the
Stockholder shall not sell, assign, encumber, pledge, or give or otherwise
dispose of any of the Stock of the Corporation now, or hereafter owned by
the Stockholder (except to the Corporation) without the prior written
consent of the Corporation. Stockholder agrees that the Corporation shall not
effect any transfer of Stock on its books except pursuant to the terms of
this Agreement. The Corporation agrees not to unreasonably withhold consent
to any proposed action by the Stockholder provided Stockholder shall
provide the Corporation with the undertaking and agreement of any proposed
transferee, in form and substance satisfactory to the Corporation's counsel,
that the terms and conditions of this Agreement shall bind the transferee in
the same fashion as if such transfer had not occurred.
10. CHANGE IN CAPITALIZATION. If, at any time while this Agreement
shall remain in effect, the common stock of the Corporation shall be
increased or changed, such increased or changed capital stock (as the case
may be) shall be subject to each and all of the terms, conditions and
provisions hereof.
11. PUBLIC MARKET FOR STOCK. If at any time prior to the applicable
valuation date under Section 3, there shall be created a public market for the
voting securities of the Corporation with the consent of the Corporation, then
all the rights and obligations of the Corporation and the Stockholder hereunder,
insofar as the same relate to the Stock subject to this Agreement, shall cease
and terminate except that the provisions of Section 11 of this Agreement shall
not apply to that percentage of the Stock which, upon the happening of certain
events, the Corporation is entitled to repurchase at cost pursuant to Section 3
(iv) above.
12. LEGEND ON STOCK. The certificates representing the Stock shall bear
substantially the following legend:
"The shares of stock represented by this certificate are subject to the
terms and conditions of a certain "Stock Purchase Agreement" entered into by and
between the Corporation and the holder of this Stock, and all amendments thereof
and supplements thereto, executed at any time by the parties thereto, or by
their respective and successive successors in interest. Said Stock Purchase
Agreement is on file with the Secretary of the Corporation, and provides
that (i) the Stockholder shall not sell, assign, encumber, pledge, give or
otherwise dispose of this stock except as provided therein, and (ii) the
Corporation has the right to purchase this stock at the time and price specified
therein. The holder hereof accepts and holds this certificate subject to and
with notice of all of the terms, conditions and provisions of said Stock
Purchase Agreement and agrees to be bound thereby."
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13. SALE OR EXCHANGE OF STOCK BY CORPORATION. If the holders of the
Corporation's securities representing sixty-six and two-thirds percent (66-2/3%)
or more of the votes entitled to be cast at a meeting of Stockholders thereon
have voted in favor of the sale or exchange of such securities to any
person, firm, association or corporation (except a conventional underwriting of
such securities by an investment banking firm for sale to the public),
Stockholder then shall be free to participate in such sale or exchange
notwithstanding any other provisions of this Agreement if the Corporation shall
send a written notice to Stockholder advising him thereof and offering to
include in such sale or exchange all Stock subject hereto on the same terms as
the other stock being sold or exchanged. In the event such a notice is given by
Corporation to Stockholder and if Stockholder shall not, within fifteen (15)
days from the delivery of such notice, deliver to the Corporation a written
acceptance of such offer, the Corporation shall, for the succeeding sixty (60)
days, have an exclusive assignable option to purchase such stock in the same
manner and on the same terms as though Stockholder had ceased his employment
with the Corporation and the Corporation had elected to purchase the Stock with
a valuation date on the fifteenth (15th) day after the delivery of such notice
by the Corporation to the Stockholder.
14. ASSIGNMENT OF CORPORATION'S RIGHT TO PURCHASE. Following any
determination under Section 3 of the fair market value of Stock to be sold
pursuant to this Agreement, the Corporation may assign its right to purchase any
or all of such Stock to any person, firm or corporation and such assignee shall
be entitled to purchase such Stock in accordance with the terms of this
Agreement upon the payment of the purchase price. In the event the Corporation
makes such an assignment, it shall immediately give written notice thereof to
the Stockholder or his legal representative.
15. EXTENDED PURCHASE OPTION
a) In the event the Stockholder is required to offer Stock to the
Corporation pursuant to Section 2 hereof and the Corporation does not purchase
all of the Stockholder's Stock subject to this Agreement, the Stockholder agrees
that the Corporation shall have an irrevocable option to purchase the Stock
which was subject to this Agreement for a period of five (5) years from the date
the Stockholder was required, pursuant to Section 2, to offer the stock to the
Corporation or until the date upon which there shall is a public market in
voting securities of the Corporation with the consent of the Corporation,
whichever shall first occur. The purchase price shall be the fair market value
of such securities on the date the option granted under this Section 15 is
exercised by the Corporation. Fair market value shall be determined in
accordance with Section 4 of this Stock Purchase Agreement. The Corporation
shall exercise this option in writing by notice of exercise mailed, registered
or certified mail, to the Stockholder's last known address. Within 30 days of
mailing the notice of exercise, the Stockholder shall deliver to the Corporation
any certificates (if not already on the Corporation's possession) evidencing
the shares subject to the option along with a warranty that such shares are free
and clear of any liens or encumbrances whatsoever. Upon receipt of the shares,
the Corporation shall pay the purchase price in cash. The option provided for
in this Section 15 shall be in addition to the Corporation's other rights
hereunder and shall not supersede any other provision or term of this Stock
Purchase Agreement. The Stockholder further agrees that this Section 15 shall be
binding upon his successors and assignees and that
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the Certificates evidencing the Common shares subject to the Stock Purchase
Agreement shall continue to bear the legend as set forth in Section 12 hereof.
(b) In furtherance of this Section 15 the Stockholder agrees to deposit or
permit to remain on deposit with the Corporation the original share certificates
evidencing the shares subject to this Stock Purchase Agreement, along with a
stock power duly endorsed in blank, and authorize the secretary of the
Corporation to fulfill the obligations of the Stockholder hereunder in the
event the Stockholder fails to do so. The Corporation may, at its
discretion, release the share certificates to the Stockholder but such release
shall not affect the rights granted hereunder.
16. NOTICES. All notices pursuant hereto shall be sent, with all charges
prepaid, and addressed as follows:
To Corporation:
NACO, Inc.
One Corporate Lakes
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▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
Lison & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇
To Stockholder:
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The address of any party hereto may be changed from time to time by notice in
writing to the other party duly served in accordance with the provisions
hereof. All notices sent pursuant hereto be certified mail or by telegram
shall, if sent from any point within the United States, be deemed to be
delivered within seventy-two (72) hours after they are sent.
17. SUCCESSORS AND ASSIGNS. All of the terms, conditions, benefits and
obligations in this Agreement shall be binding upon and running in favor of the
parties hereto, their heirs, executors,
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administrators, successors and assigns.
18. GOVERNING LAW. This Agreement shall be construed under and enforced
in accordance with the laws of the State of Illinois.
19. DUPLICATE ORIGINALS. This Agreement may be signed separately by the
parties hereto upon separate copies and all of such copies shall together
constitute a single Agreement.
20. SECTION HEADINGS. The Section headings contained in this Agreement are
inserted for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the stockholder hereto has executed this Agreement as
an individual party and the Corporation has caused this Agreement to be executed
by its duly authorized officer, all as of the day and year first above written.
NACO, Inc. Stockholder
By: ____________________________ __________________________________
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