EXHIBIT 10.20
FORM 10-K
YEAR ENDED DECEMBER 31, 1998
SECURED PROMISSORY NOTE
Milwaukee, Wisconsin December 18, 1998
$400,000
FOR VALUE RECEIVED, Stephen R. Light (the "Borrower") hereby
promises to pay to Bucyrus International, Inc., a Delaware corporation
("Payee") the principal sum of FOUR HUNDRED THOUSAND DOLLARS ($400,000) 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 December
9, 1998 (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 Executive 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 $100,000.
(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 4.52% 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, irrespec-
tive 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.
STEPHEN R. LIGHT
/s/Stephen R. Light
TRANSACTIONS
ON
NOTE
Outstanding
Amount of Amount of Principal
Interest Paid Principal Paid Balance Notation
Date This Date This Date This Date Made By