EXHIBIT 10.17
FORM 10-K
YEAR ENDED DECEMBER 31, 1999
ANNEX A
SECURED PROMISSORY NOTE
Milwaukee, Wisconsin June 23, 1999
$60,000
FOR VALUE RECEIVED, Michael W. Salsieder (the "Borrower") hereby
promises to pay to Bucyrus International, Inc., a Delaware corporation
("Payee") the principal sum of SIXTY THOUSAND DOLLARS ($60,000) in lawful
money of the United States of America, on March 31, 2003 (the "Repayment
Date"), together with accrued and unpaid interest thereon from the date
hereof. Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Employment Agreement, dated as of June 23,
1999 (the "Employment Agreement"), between Borrower and Payee. This Note
shall be full recourse to the Borrower.
1. Principal Payments. Subject to the provisions of
Section 3 below, payments of principal on the Note shall be made as follows:
(a) Principal payments in the amounts set forth herein
shall be due and payable hereunder on April 1 of each of 2000, 2001 and 2002
(the "Installment Dates"), with any remaining principal balance due in full
on the Repayment Date.
(b) The principal payment due and payable on each
Installment Date shall be in an amount not less than 50% of the Borrower's
pre-tax Annual Bonus earned with respect to the immediately preceding fiscal
year; provided, that no principal payment shall be due and payable on an
Installment Date if Borrower receives no Annual Bonus with respect to the
fiscal year ending immediately prior to the year in which such Installment
Date occurs; and provided, further, that except as provided in Section 3(b)
below, regardless of any failure of Employee to earn an Annual Bonus with
respect to any fiscal year of the Company, the entire unpaid principal
balance of this Note shall remain due and payable on the Repayment Date.
(c) Notwithstanding anything herein to the contrary, the
principal payment due and payable on April 1, 2000 shall be in an amount not
less than $15,000.
(d) The Borrower shall have the right to prepay the
principal amount hereof in full or in part, together with all accrued
interest on the amount prepaid to the date of such prepayment, at any time
without penalty.
2. Interest Payments. Except as provided in Section 3(b)
below, the Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, on April 1 of each
year, with the first such interest payment being due and payable on April
1, 2000, at a rate of 5.37% per annum, which interest rate is the minimum
applicable federal mid-term interest rate set forth under Section 1274 of
the Internal Revenue Code as of the date hereof.
3. Termination of Employment.
(a) If the Borrower's employment with Payee is
terminated for Cause, then the principal balance of this Note and all
accrued interest thereon shall be due and payable in full on the date which
is ten (10) days following the effective date of such termination.
(b) If the Borrower terminates his employment under the
Employment Agreement for Good Reason or is terminated by Payee without
Cause, then no further payments of interest or principal on this Note shall
be due and payable following the effective date of such termination of
employment except in connection with one or more Liquidating Events (as
defined below) with respect to the Purchased Shares. For purposes of this
Note, a "Liquidating Event" shall be defined as any event that results in
liquidity for the Common Stock such that the Borrower would have the ability
to freely sell all or any portion of the Purchased Shares, or any shares of
capital stock or other consideration received from another entity by holders
of the Payee's Common Stock as a result of a business combination or other
transaction involving the Payee, at fair market value, and shall include,
without limitation, (A) any sale of Common Stock by American Industrial
Partners Capital Fund II, L.P., which by operation of any other agreement
gives the Borrower the right to sell the Purchased Shares, and (B) an
initial public offering of Payee's Common Stock. In the event a Liquidating
Event occurs, the Borrower shall make a payment on the principal balance of
this Note and accrued interest thereon to the date of termination of
employment in an amount equal to the aggregate value of the Purchased Shares
subject to such sale by the Borrower as of the date of such Liquidating
Event. Such amount shall be applied first to accrued interest and then to
principal, and shall become due and payable on the date which is ten (10)
days following such Liquidating Event.
(c) In the event of the termination of Borrower's
employment with Payee by reason of Borrower's death or Total Disability,
this Note shall be cancelled in exchange for the return to the Company of
that number of Purchased Shares sufficient in value to pay off the then
remaining balance of this Note (or all of the Purchased Shares, if their
aggregate value is less than the then remaining balance of this Note).
4. Security. Pursuant to the Pledge Agreement, dated as of
the date hereof (the "Pledge Agreement"), by and between Payee and the
Borrower, the obligations of the Borrower hereunder are secured by the
Pledged Collateral (as defined in the Pledge Agreement), and the holder of
this Note is entitled to the benefits of such Pledged Collateral.
5. Events of Default. Each of the following events shall
constitute an "Event of Default" hereunder (whether it shall be voluntary
or involuntary or occur or be effected by operation of law or otherwise):
(i) the Borrower's failure to pay, within fifteen (15) days after the date
when such payment is due, any payment of principal or interest on this Note,
(ii) the Borrower's failure to observe or perform, within fifteen (15) days
after receipt of notice of default from Payee, any covenant or agreement
contained in this Note or the Pledge Agreement, (iii) if any
representation, warranty, certification or statement made by the Borrower
in the Pledge Agreement or in any certificate or other document delivered
pursuant to the Pledge Agreement shall prove to have been incorrect in any
material respect when made or deemed made, (iv) the appointment of a
receiver or a trustee of all or part of the Borrower's property, (v) an
assignment for the benefit of the Borrower's creditors, (vi) the
commencement or filing of any voluntary proceeding or petition by the
Borrower under any bankruptcy or insolvency law or any law relating to the
relief of debtors or readjustment of indebtedness, (vii) the commencement
or filing of any involuntary proceeding or petition against the Borrower
under any bankruptcy or insolvency law or any law relating to the relief of
debtors or readjustment of indebtedness, which proceeding or petition shall
not have been dismissed within sixty (60) days after commencement or filing
thereof, (viii) the appointment of a receiver, custodian, trustee or
liquidator for any part of the assets or property of the Borrower, (ix) the
failure of the Borrower generally to pay his debts as they become due, and
(x) the failure of Payee to have a first priority security interest in the
Pledged Collateral (as defined in the Pledge Agreement).
6. Remedies.
(a) Upon the occurrence of any Event of Default, the
holder of this Note may, by notice in writing to the Borrower, declare this
Note and the principal of and accrued interest on this Note and all other
charges owing to Payee to be, and the same shall upon such notice forthwith
become, due and payable. Upon the occurrence of an Event of Default, the
holder of this Note may, in addition to all rights and remedies available
to it at law, exercise any or all of its rights under the Pledge Agreement.
(b) No failure or delay by the holder of this Note in
exercising any remedy, right, power or privilege under this Note or the
Pledge Agreement shall operate as a waiver of such remedy, right, power or
privilege, nor shall any single or partial exercise of such remedy, right,
power or privilege preclude any other or further exercise of such remedy,
right, power or privilege. No remedy, right, power or privilege conferred
upon or reserved to the holder of this Note by this Note or the Pledge
Agreement is intended to be exclusive of any other remedy, right, power or
privilege provided or permitted by this Note, the Pledge Agreement or by
law, but each shall be cumulative and in addition to every other remedy,
right, power or privilege so provided or permitted and each may be exercised
concurrently or independently from time to time and as often as may be
deemed expedient by the holder of this Note. Any provision of this Note
which is prohibited or unenforceable shall be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Note.
(c) The holder of this Note shall have the right, at its
option, to declare the entire unpaid principal balance of this Note,
irrespective of the Repayment Date set forth above, immediately due and
payable, together with accrued interest thereon, if the Borrower (or any
affiliate of the Borrower) sells, transfers or disposes of any portion of
the Pledged Collateral (as defined in the Pledge Agreement).
7. Costs of Collection. Upon the failure of the Borrower to
pay any amount due hereunder as and when due, the Borrower shall pay on
demand any and all costs and expenses (including, without limitation, all
court costs and attorneys' fees) incurred by the holder hereof in connection
with the collection of any outstanding principal balance and interest
accrued hereunder (whether or not suit is filed to enforce the terms
hereof), and in connection with the enforcement of any rights or remedies
provided for pursuant to this Note and the Pledge Agreement. If not paid
on demand, all such costs and expenses automatically shall be added to the
remaining principal balance hereunder as of the date immediately following
the date of such demand.
8. Method of Payment, etc. All payments of principal and
interest in respect of this Note shall be made in lawful money of the United
States of America in same day funds at such place as shall be designated in
writing for such purpose by the Payee. Whenever any payment on this Note
shall be stated to be due on a day which is not a business day, such payment
shall be made on the next succeeding business day and such extension of time
shall be included in the computation of the payment of interest on this
Note. The Payee hereby agrees, by its acceptance hereof, that it will make
a notation hereon of all principal payments previously made hereunder and
of the date to which interest hereon has been paid; provided, however, that
the failure to make a notation of any payment made on this Note shall not
limit or otherwise affect the obligations of the Borrower hereunder with
respect to payments of principal of or interest on this Note.
9. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
WISCONSIN.
10. Waiver. The Borrower hereby waives any right it might
otherwise have to require notice or acceptance by any other person of its
obligations or liabilities under this Note which are unconditional and
absolute and waives diligence, presentment, demand of payment, protest and
notice with respect to all of the obligations of the Borrower under this
Note and with respect to any action under this Note and all other notices
and demands whatsoever, except as specifically provided for in this Note.
This Note may be amended, and the observance of any term of this Note may
be waived, with (and only with) the written consent of Payee.
11. Assignment or Pledge of Note. This Note and Payee's
rights hereunder may not be assigned or otherwise transferred by Payee to
any person or entity (other than to an affiliate of Payee), in whole or in
part, without giving prior written notice to the Borrower of such
assignment, pledge or other transfer.
12. Loss, Mutilation, Etc. Upon notice from the holder of
this Note to the Borrower of the loss, theft, destruction or mutilation of
this Note, and upon receipt of an indemnity reasonably satisfactory to the
Borrower from the holder of this Note or, in the case of mutilation hereof,
upon surrender of the mutilated Note, the Borrower will make and deliver a
new note of like tenor in lieu of this Note.
13. Notices. All notices and other communications required
or permitted under this Note shall be in writing and shall be personally
delivered or sent by certified first class United States mail, postage
prepaid, return receipt requested, and if mailed and shall be deemed to have
been received on the third business day after deposit in the mail, addressed
to Payee or to the Borrower at the addresses set forth in Section 12 of the
Employment Agreement. Notice of any change of either party's address shall
be given by written notice in the manner set forth in Section 12 of the
Employment Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed and delivered as of the date and at the place first written above.
MICHAEL W. SALSIEDER
/s/Michael W. Salsieder