Exhibit 10.7
Executive Stock Purchase Plan
NATIONWIDE ELECTRIC, INC.
EXECUTIVE STOCK PURCHASE PLAN
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1. Purpose.
This Plan (the "Plan") is intended to promote the interests of
Nationwide Electric, Inc. (the "Corporation") and its stockholders by providing
an incentive for key executives of the Corporation and its subsidiaries.
2. Adoption and Administration of Plan.
The Plan shall become effective as of August 1, 1998. Absent contrary
action by the Corporation's Board of Directors, (the "Board"), any action taken
by the Board, or by the committee of directors appointed by the Board to
administer the Plan (the "Compensation Committee") with respect to the Plan's
implementation, interpretation, or administration of the Plan shall be final,
conclusive and binding. As used herein, the term "Compensation Committee" shall
refer to the Board if no Compensation Committee then exists or is then
designated.
3. Stock Subject to Plan.
There is hereby established an Executive Stock Purchase Plan Reserve
to which shall be allocated 250,000 shares of common stock, par value $.01 per
share, of the Corporation ("Stock"). If the shares of Stock of the Corporation
should, as a result of a stock split, stock dividend, combination of shares, or
any other change or exchange for other securities by reclassification,
reorganization, redesignation, merger, consolidation, recapitalization or
otherwise, be increased or decreased or changed into, or exchanged for, a
different number or kind of shares of stock or other securities of the
Corporation or of another corporation, the number of shares then remaining in
the Reserve shall be appropriately adjusted to reflect such action. If any such
adjustment shall result in a fractional share, such fraction shall be
disregarded. Upon the sale of shares pursuant to this Plan, the Reserve will be
reduced by the number of shares sold, and upon the repurchase of any shares sold
hereunder upon exercise of the Corporation's right of first refusal, the Reserve
will be increased by such number of shares, and such reacquired shares may again
be sold under this Plan. Sales under this Plan may be made from authorized but
unissued shares or from treasury shares.
4. Eligibility.
The Compensation Committee will designate, from time to time, key
executives of the Corporation or any of its subsidiaries, or parents or
affiliated corporations (including officers and directors of the Corporation),
engaged in activities which further the Corporation's objectives, who will be
eligible to purchase shares under the Plan and the number of shares of Stock of
the Corporation to be sold to each. In selecting the persons to whom offers to
purchase shares hereunder will be made and in determining the number of shares
to be offered, the Compensation Committee will consider the position and
responsibilities of such persons, the value of their
services to the Corporation or its subsidiaries, and such other factors as the
Compensation Committee deems pertinent.
5. Rights to Purchase.
After the Compensation Committee has determined to offer a person the
right to purchase shares under the Plan, it will advise the offeree in writing
of the offer's terms, including the number of shares which such person will be
entitled to purchase, the purchase price per share, and any other terms,
conditions, and restrictions relating thereto. This notice will also provide
that such person has 45 days from the date of the offer to accept the offer in
the manner set forth in the offer. The form by which this offer will be made is
attached hereto and incorporated herein as "Exhibit A." The Compensation
Committee may, in the exercise of its discretion, extend the offer's term.
Subject to the Plan's express provisions, the Compensation Committee may make
such offer subject to any terms and conditions it establishes, and the offers
made to different persons, or to the same person at different times, may be
subject to terms, conditions and restrictions which differ from each other.
6. Terms of Offers.
(a) Purchase Price. The Compensation Committee will determine the purchase
price of the shares being offered under this Plan. As determined by the
Compensation Committee, the purchase price will reflect a discount from the then
current market value of the shares due to the lack of marketability because of
the provisions of the Plan. The purchase price must be paid in full, in cash or
certified bank check, at the Corporation's principal office before the offer
expires, for the offer's acceptance to be effective. The date upon which the
purchase price is paid and the offer is accepted is sometimes hereinafter called
the "Closing Date." On the Closing Date, the Corporation shall deliver the
shares registered in the name of the executive and the executive shall
concurrently deliver cash or a certified bank check for the purchase price of
the shares.
(b) Financing. The Corporation will arrange a full-recourse loan in an
amount not to exceed 85% of the purchase price, to be evidenced by a promissory
note, to be dated as of the Closing Date, payable with interest at the prime
rate (as quoted in the Wall Street Journal as the base rate on corporate loans
posted by at least 75% of the nation's 30 largest banks) and payable to the
Corporation, to pay a portion of the purchase price for the shares. To secure
the obligations of the executive under the loan, the executive will enter into a
pledge agreement with the Corporation.
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(c) Vesting. Shares purchased pursuant to this Plan shall constitute
"Vested Shares" in accordance with the following schedule:
Portion of Shares
Which Are Vested
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Closing Date 1/3
First Anniversary of Closing Date 2/3
Second Anniversary of Closing Date 100%
"Unvested Shares" shall mean shares which are not "Vested Shares."
(d) Termination of Employment. If the employment of the executive with the
Corporation is terminated for any reason, including the executive's death or
disability, any Unvested Shares shall be offered for sale to the Corporation,
within 30 days from the date of termination, at the original price paid for such
shares by the executive under the terms of this Plan. If the Corporation chooses
to repurchase such shares from the executive, the Corporation shall have 30 days
to exercise such right. Under no circumstance is the Corporation obligated to
repurchase such shares.
(e) Restrictions. By purchasing the shares under this Plan being offered to
him or her, an offeree agrees and consents to the following:
(i) No shares purchased hereunder will be conveyed, transferred,
encumbered or otherwise disposed of (any such disposition being herein
called a "transfer") by the holder thereof unless all shares covered by
this Plan owned by the holder first have been offered to the Corporation if
the offer occurs within one year after the Closing Date, at a price per
share equal to the original price paid by the holder for such shares. The
Corporation will have 15 business days from the date it receives any such
offer to accept. The Corporation will accept by giving notice to the
holder. If the Corporation does accept, the purchase and sale of such
shares will occur at the Corporation's principal office at the time and
date specified in such notice of acceptance. In no event, however, will the
date for consummating the transaction be later than 30 business days from
the date of the notice of acceptance. At the closing, the holder will
deliver to the Corporation certificates representing all of the shares
subject to the offer, duly endorsed, with all necessary transfer stamps
affixed. Upon receipt of such share certificates, the Corporation will
deliver to the holder a check in the amount of the purchase price.
(ii) No shares subject to the restrictions under the Plan will be
transferred on the Corporation's books until the Corporation has received
in writing from the
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transferee an agreement to be bound by the provisions and restrictions of
this Plan, as well as any other agreements affecting the transfer and
ownership of shares of the Corporation.
Any transfer or purported transfer made by a purchaser of shares under this
Plan, except at the times and in the manner herein specified and until
receipt by the Corporation of such agreement, will be null and void and the
Corporation shall not recognize or give effect to such transfer on its
books and records or recognize the person or persons to whom such proposed
transfer has been made as the legal or beneficial holder of those shares.
(iii) If the Corporation fails to accept the offer within the 15 business
day period of subparagraph 6(e)(i) above, then the shares shall become
freely transferable.
(iv) Upon the death of a holder of vested yet restricted shares subject to
this Plan, those shares may be conveyed by will or by the laws of descent
and distribution, without first being offered to the Corporation. Any
successor in interest to the holder in such event may not further convey,
transfer, encumber or otherwise dispose of such shares until such shares
would have otherwise become unrestricted shares as provided herein.
(v) Certificates representing shares which are subject to this Plan will
bear the following legend, in addition to such other legends as counsel to
the Corporation may deem appropriate.
RESTRICTED SHARES
"The shares represented by this certificate may be subject to Nationwide
Electric, Inc.'s right of first refusal to purchase and to all other terms,
conditions, and restrictions of the Corporation's Executive Stock Purchase
Plan, a copy of which is on file and available for inspection during normal
business hours at the Corporation's principal office."
7. Expenses.
The Corporation will pay all expenses and costs in connection with the
Administration of the Plan.
8. No Prior Right of Offer.
Nothing in the Plan will be deemed to give any director, officer, or
employee, or such individual's legal representatives or assigns, or any other
person or entity claiming under or through such individual, any contractual or
other right to participate in the benefits of the Plan.
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9. Indemnification of the Compensation Committee.
In addition to such other rights or indemnification as they may have,
the Corporation will indemnify members of the Compensation Committee against all
costs and expenses reasonably incurred by them or any of them in connection
with: any action, suit, or proceeding to which they or any of them may be a
party by reason of any action taken, or failure to act, under or in connection
with the Plan or any award granted pursuant thereto and against all amounts paid
by them in settlement thereof (provided such settlement is approved by legal
counsel selected by the Corporation) or paid by them in satisfaction of a
judgment in any action, suit or proceeding; provided that upon institution of
any such action, suit, or proceeding, the person desiring indemnification gives
the Corporation an opportunity, at its own expense, to handle and defend the
same.
10. Amendment and Termination of Plan.
The Board may at any time terminate or extend the Plan, or modify the
Plan as it deems advisable. No termination or amendment of the Plan shall,
without the consent of any person affected thereby, modify or in any way affect
any right or obligation created prior to such termination or amendment.
11. Liability of Corporation.
The Corporation's liability under this Plan and any sale made
hereunder is limited to the obligations set forth with respect to such sale and
nothing in this Plan will be construed to impose any liability on the
Corporation in favor of the purchaser with respect to any loss, cost, or expense
which the purchaser may incur in connection with, or arising out of, any
transaction in connection therewith.
12. No Agreement to Employ.
Nothing in the Plan will be construed to constitute, or evidence, an
agreement or understanding, express or implied, by the Corporation to employ or
retain the purchaser for any specific period of time.
13. Notices.
Any notice or other communication required or permitted to be made or
given hereunder will be sufficiently made or given if sent by certified mail
addressed to the offeree or holder at such individual's address as set forth in
the Corporation's regular books and records and, if to the Corporation,
addressed to it at its principal office.
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