Exhibit 10.33
STOCK PURCHASE RIGHT AGREEMENT
THIS STOCK PURCHASE RIGHT AGREEMENT (this "Agreement"), to be effective on April
7, 1997, is made and entered by and between GROUP TECHNOLOGIES CORPORATION, a
Florida corporation (the "Company"), and THOMAS W. LOVELOCK (the "Employee").
WITNESSETH
WHEREAS, on April 4, 1997, the Board of Directors of the Company authorized
and directed the Company to:
(i) grant the Employee a one-time right and option to purchase up to 100,000
shares of the Company's common stock, $0.01 par value per share (the "Common
Stock"), directly from the Company at the fair market value of the Common
Stock on the date of exercise (the Stock Purchase Right), and
(ii) grant the Employee a companion right and option to receive a certain
number of shares of Common Stock directly from the Company, at no cost to
the Employee, which right shall automatically be exercised by him if and
when he exercises the Stock Purchase Right (the "Bonus Share Right").
However, any shares to be issued to the Employee upon exercise of the Bonus
Share Right are to be subject to a vesting requirement that the Employee
must remain employed by the Company for three (3) years after the date of
exercise. The number of shares to be issued to the Employee upon exercise
of the Bonus Share Right shall be that number of shares which, when added to
the number of shares he purchased by exercising the Stock Purchase Right,
shall cause the effective purchase price of these shares to reflect a 30%
discount from their fair market value on the date of exercise.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:
1. Grant of Stock Purchase Right. Subject to the other terms of this
Agreement, the Company hereby grants to the Employee the right and option to
purchase up to ONE HUNDRED THOUSAND (100,000) shares of Common Stock (the
"Purchased Shares") directly from the Company at any time between the dates of
July 1, 1997 and September 30, 1997 (the "Stock Purchase Right"). The price to
be paid by the Employee for the Purchased Shares shall be equal to the fair
market value of the shares,as defined in Section 4 hereof, on the date of
purchase.
2. Exercisability. The Employee may only exercise the Stock Purchase
Right once during the exercise period, however, he may do so by electing to
purchase any number of whole shares of Common Stock, up to 100,000 shares.
3. Nontransferability. The Stock Purchase Right is not transferable by the
Employee under any circumstances. In the event the Employee has not exercised
the Stock Purchase Right and he dies or his employment with the Company is
terminated for any other reason prior to September 30, 1997, the Stock Purchase
Right will expire and become null and void immediately upon the occurrence of
such an event.
4. Method of Exercise and Determination of Fair Market Value. The Employee
may exercise the Stock Purchase Right by delivering a written notice to the
Company on the fourth Trading Day prior to the desired date of exercise. The
written notice shall specify the number of shares to be purchased pursuant to
the exercise. The fair market value of the Common Stock used to determine the
purchase price to be paid by the Employee for the shares shall be determined by
calculating an average of the Quoted Price for the Common Stock on each of the
three Trading Days immediately following the date the Company received written
notice of the Employee's intent to exercise the Stock Purchase Right. The
"Quoted Price" for each day shall be: (i) the last reported sales price or, in
the case no such reported sale took place on such day, the average of the
closing bid and asked prices for such day, in either case on the principal
national securities exchange on which the Common Stock is permitted to trade; or
(ii) if the Common Stock does not trade on any national securities exchange, but
is traded in the over-the-counter market, the last reported sales price or, in
the case no such reported sale took place on such day, the average of the
closing bid and asked prices of the Common Stock on Nasdaq or any comparable
system; or (iii) if the Common Stock is not quoted on Nasdaq or a comparable
system, the last reported sales price, or in case no such reported sale took
place on such day, the average of the closing bid and asked prices as furnished
by two members of the National Association of Securities Dealers, Inc. selected
from time to time by the Company for that purpose. A "Trading Day" shall be a
day for which a Quoted Price is available.
5. Payment for and Delivery of Purchased Shares. Upon exercise of the
Stock Purchase Right, the Employee must pay the purchase price of the shares by
delivering to the Company a check payable to the Company for the total amount of
the purchase price. Such payment must occur on the fourth Trading Day after the
Employee gives the Company notice of his intent to exercise. If the Company is
required to withhold on account of any federal, state or local tax imposed as a
result of such exercise, the Employee shall also remit a check payable to the
Company for the amount of such taxes. Promptly after the Company receives full
payment of the purchase price and any associated tax withholding amounts, the
Company shall, without transfer or issuance tax or other incidental expenses to
the Employee, deliver a certificate for the Purchased Shares to the Employee.
6. Grant of Bonus Share Right. Subject to the other terms of this
Agreement, the Company hereby grants to the Employee the right and option to
receive a certain number of shares of Common Stock directly from the Company at
no cost to the Employee (the "Bonus Shares"). This Bonus Share Right is only
exercisable in conjunction with the Stock Purchase Right and it will
automatically be exercised if and when the Employee exercises the Stock Purchase
Right pursuant to this Agreement. However, the Company's obligation to issue
and deliver any of the Bonus Shares to the Employee is entirely subject to the
Employee fulfilling a vesting requirement that he remain employed by the Company
for three (3) years after the date of exercise. If the Employee's employment
with the Company is terminated for any reason whatsoever prior the third
anniversary of the exercise date, his right to receive any of the Bonus Shares
shall immediately become null and void. The number of Bonus Shares which the
Employee shall be eligible to receive upon meeting the vesting requirement shall
be determined using the following formula:
Imputed 30% discount on the
Purchased Shares
- ---------------------------------- = Number of Bonus Shares
Fair market value of common stock
on the date of exercise
The number of Bonus Shares calculated by using the above formula shall be
rounded off to the nearest whole number of shares.
7. Tax Withholding on and Delivery of Bonus Shares. The Employee
acknowledges and agrees that, upon satisfying the vesting requirement for the
Bonus Shares, he shall be deemed to have received taxable compensation from the
Company equal to the fair market value of such shares on the date of vesting,
unless he has made an election pursuant to Section 83(b) of the Internal Revenue
Code of 1986, as amended, which would change the measurement date to the date of
exercise. Accordingly, the Employee agrees to satisfy any tax withholding
amount owed by him on either of these dates by delivering to the Company a check
payable to the Company for the total amount of such taxes. Promptly after the
Company receives full payment of the tax withholding amounts, the Company shall,
without transfer or issuance tax or other incidental expenses to the Employee,
deliver a certificate for the Bonus Shares to the Employee.
8. Representations and Warranties of the Employee. The Employee
understands and acknowledges that: (i) any shares which may be issued to the
Employee by the Company, upon his exercise of the Stock Purchase Right and upon
vesting of the Bonus Shares, are being offered and sold under the exemption from
registration provided for in Sections 3(b) and 4(2) of the Securities Act of
1933 (the "Act"), (ii) the Employee will be purchasing the shares of Common
Stock without being furnished any offering literature or prospectus, and (iii)
the Company's issuance of these shares to the Employee will not be scrutinized
by the United States Securities and Exchange Commission or by any administrative
agency charged with the administration of securities laws of any state. The
Employee hereby also represents and warrants to the Company that:
(i) The Employee has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks
of an investment in the Company and of making an informed investment
decision.
(ii) In his capacity as President and Chief Executive Officer of the
Company, he has access to and, at his discretion, he has had an
opportunity to review the Company's Amended and Restated Articles of
Incorporation, as amended, its Amended and Restated Bylaws, all reports
filed by the Company as required by Section 13 or 15(d) of the
Securities Exchange Act of 1934, and any other documents, books or
records which he has deemed to be pertinent to his investment decisions
regarding the Stock Purchase Right and the Bonus Share Right.
(iii) The Employee is able to bear the economic risk of the investment
required to exercise the Stock Purchase Right and the Bonus Share Right.
(iv) The Purchased Shares and any Bonus Shares to be acquired by the
Employee are being acquired by him in good faith solely for his own
account, for investment purposes only, and are not being purchased for
resale, resyndication, distribution, subdivision or fractionalization
thereof.
(v) The Employee understands that no federal or state agency will review
the issuance of the Purchased Shares or the Bonus Shares, nor have they
passed on or made any recommendation or endorsement of the such shares.
Except as provided in Section 10 hereof, neither the Purchased Shares
nor the Bonus Shares will be registered under the Securities Act and,
therefore, each of the certificates representing the shares will be
endorsed with the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
ARE RESTRICTED SECURITIES WITHIN THE MEANING OF RULE 144
PROMULGATED UNDER THE ACT. THESE SECURITIES MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION UNDER THE APPLICABLE SECURITIES
LAWS OR AN EXEMPTION THEREFROM. THE RESTRICTED SECURITIES
WILL NOT BE TRANSFERRED ON THE BOOKS OF THE COMPANY OR BY ANY
TRANSFER AGENT ACTING ON BEHALF OF THE COMPANY EXCEPT UPON
RECEIPT OF AN OPINION OF COUNSEL, SATISFACTORY TO THE
COMPANY, THAT THE PROPOSED TRANSFER IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF ALL APPLICABLE SECURITIES LAWS,
OR THE RECEIPT OF EVIDENCE, SATISFACTORY TO THE COMPANY, THAT
THE PROPOSED TRANSFER IS THE SUBJECT OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER ALL APPLICABLE SECURITIES LAWS.
(vi) The Employee specifically acknowledges that, in his capacity as
President and Chief Executive Officer of the Company, he is considered
to be an affiliate of the Company for purposes of Rule 144 of the Act
and, accordingly, he is subject to the applicable holding period and
other restrictions as stated therein.
9. No Impact From Capital Adjustments. There will be no adjustment to any
aspect or feature of the either the Stock Purchase Right or the Bonus Share
Right in the event there is a stock split, stock dividend or any other form of
capital adjustment involving the Common Stock.
10. Registration Rights. If, at any time after the Employee purchases the
Purchased Shares or receives any Bonus Shares upon vesting of his right thereto,
the Company shall decide to register in a registration statement any of its
securities, either for its own account or for the account of a security holder
or holder who does not have an exclusive or prior registration right, the
Company may, in its sole discretion, include the Purchased Shares and the Bonus
Shares in such registration(s) (an "Incidental Registration"), upon the
Employee's written request to the Company no later than thirty days prior to the
Company's proposed filing date for such registration statement. Each such
request for Incidental Registration must be for a minimum of 20,000 shares of
either the Purchased Shares or the Bonus Shares, or a combination thereof, and
shall be subject to reduction or total exclusion if, in the opinion of an
underwriter of the Company's shares in such offering, the inclusion of such
shares would have an adverse effect on the proposed offering and the Company's
registration. In addition, the Employee agrees that he will not offer, sell,
contract to sell, announce its intention to sell, pledge or otherwise dispose
of, directly or indirectly, or file with the Securities and Exchange Commission
a registration statement under the Securities Act relating to the Purchased
Shares or the Bonus Shares without the prior written consent of the underwriter,
if any, of the securities being registered in Company's registration statement
for a period of ninety (90) days after the date of the prospectus included in
such registration statement. All expenses incurred in connection with any such
Incidental Registration, including without limitation, all registration, filing
and qualification fees, printing expenses, fees and disbursements of counsel for
the Company, and expenses of any special audits incidental to or required by
such registration, shall be borne by the Company.
11. Compliance With Laws and Regulations. This Stock Purchase Right and
the Bonus Share Right, along with the obligation of the Company to sell and
deliver any shares hereunder, shall be subject to all applicable federal and
state laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required. Moreover, this Stock Purchase Right and
the Bonus Share Right may not be exercised if the exercise, or the receipt of
the Purchase Shares or the Bonus Shares would be contrary to applicable law.
12. No Rights as a Stockholder. Neither the Stock Purchase Right nor the
Bonus Share Right confer any rights to the Employee as a stockholder of the
Company, except only as to any shares of Common Stock which are actually
delivered to the Employee.
13. No Right to Continued Employment. Neither the receipt of the Stock
Purchase Right nor the Bonus Share Right give the Employee any right to
continued employment by the Company or any of its subsidiaries for any period,
nor shall the granting of these rights or the issuance of shares on exercise
thereof give the Company or any of its subsidiaries any right to receive the
continued services of the Employee for any period.
14. Miscellaneous.
(a) Notices. Any notice to the Company shall be addressed to it as
follows: Group Technologies Corporation, 10901 Malcolm McKinley Drive, Tampa,
Florida 33612, Attention: The Corporate Secretary. Any notice to the Employee
shall be addressed to him as follows: Thomas W. Lovelock, 527 Colonial Drive,
Brooksville, Florida 34601. Either party shall have the right at any time
hereafter to designate, in writing, some other address.
(b) Entire Agreement. This Agreement contains the entire understanding of
the parties with respect to the transactions contemplated hereby and it
supersedes all prior arrangements or understandings with respect thereto. There
are no restrictions, agreements, promises, warranties, covenants, or
undertakings other than those expressly set forth herein.
(c) Modifications and Amendments. No change, modification or termination
of any terms, provisions, or conditions of this Agreement shall be effective
unless made in writing and signed by all parties hereto, their successor and
assigns.
(d) Governing Law. This Agreement shall be governed by the laws of the
State of Florida (regardless of the laws that might be applicable under the
principles of conflicts of law) as to all matters, including, but not limited
to, matters of validity, construction, effect and performance.
(e) Litigation Venue. This Agreement shall be deemed for all purposes to
have been entered into in Hillsborough County, Florida. Any litigation arising
directly or indirectly from a dispute hereunder shall be litigated solely in the
Circuit Court of the Sate of Florida in Hillsborough County, Florida or in the
United States District Court for the Middle District of Florida, Tampa Division.
The parties hereto submit to the personal jurisdiction of such courts and agree
that such courts shall be the sole situs of venue for the resolution of any such
dispute through litigation.
(f) Attorneys' Fees. In the event of litigation between the parties
arising directly or indirectly pursuant to this Agreement, the prevailing party
shall be entitled to the reimbursement of all costs (including reasonable
attorneys' fees at the trial and appellate court levels) from the non-
prevailing party.
(g) Separability. If any section, subsection or provision, is held
invalid, then the remainder of the Agreement, and the application of such
section, subsection or provision to persons or circumstances other than those
with respect to which it is held invalid, shall not be affected thereby.
(h) Headings and Captions. The titles or captions of sections and
subsections contained in this Agreement are provided for convenience of
reference only, and shall not be considered a part hereof for purposes of
interpreting or applying this Agreement, and, therefore, such titles or captions
do not define, limit, extend, explain or describe the scope or extent of this
Agreement or any of its terms, provisions, representations, warranties,
conditions, etc., in any manner or way whatsoever.
(i) Waiver. To the extent permitted by applicable law, each party may, by
written instrument, extend the time for performance of any of the obligations or
other acts of any other party hereto, and (1) waive such other party's
performance of any of the obligations set out in this Agreement, and (2) waive
any condition to its obligations under this Agreement.
IN WITNESS WHEREOF, this Agreement is being entered into in duplicate as of the
16th day of April, 1997.
GROUP TECHNOLOGIES CORPORATION
By: /s/ Jeffrey T. Gill
Jeffrey T. Gill
Title: Chairman of the Board
Attest:
/s/ Michael L. Schuman
Secretary
EMPLOYEE
/s/ Thomas W. Lovelock
Thomas W. Lovelock
(Seal)