Exhibit 10.7
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (the "Agreement") is entered into effective
as of February 5, 2001 between MICROPAC INDUSTRIES, INC., a Delaware corporation
(the "Company"), and Xxxxxxxx Xxxxxxxx, an individual, (referred to herein as
the "Shareholder").
The Company has authorized capitalization of 3,627,151 shares of common
stock, $0.10 par value, issued and outstanding. The Shareholder is the owner of
five hundred forty-eight thousand eight hundred thirty-six (548,836) shares of
the Company's common stock (the "Stock").
The Shareholder and the Company desire to promote their mutual
interests and the interests of the Company by entering into this Agreement
concerning the Stock.
ACCORDINGLY, in consideration of the foregoing premises, the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties to this Agreement agree as follows:
SECTION 1: DEFINITIONS
As used herein, the following terms shall have the respective meanings
indicated:
1.1. Closing is defined in Section 4.
1.2. Event Notice is defined in Section 3.1.
1.3. Exercise Event means the occurrence of any of the following events
with respect to a Shareholder:
(a) The Shareholder dies, or becomes permanently disabled (the
"Shareholder's Death");
(b) The termination of the Shareholder's employment with the
Company for any reason (a "Termination").
1.4. Purchase Price means, with respect to each share of stock, the
total Shareholder's equity as shown on the latest quarterly or annual balance
sheet of the Company, audited or unaudited, divided by the number of issued and
outstanding shares of the Company's common stock. Treasury shares and shares
subject to outstanding but unexercised options shall not be deemed issued and
outstanding.
1.5. GAAP means generally accepted accounting principles, consistently
applied with the principles customarily used by the Company in preparing its
financial statements for financial reporting purposes.
1.6. Shareholder means and includes Xxxxxxxx Xxxxxxxx or in the event
of his death or disability, his executor or legal representatives.
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1.7. Transfer means(a) any sale, hypothecation, transfer, pledge,
encumbrance, gift, donation, assignment, or other disposition, whether voluntary
or involuntary, and whether during the Shareholder's lifetime or upon or after
the Shareholder's death, including, but not limited to, any transfer by
operation of law, by court order, by judicial process, or by foreclosure, levy,
or attachment, or (b) the act of making any of the foregoing transfers.
SECTION 2 GRANT OF PUT OPTION; ABILITY TO TRANSFER THE SHARES
2.1. Grant of Put Option. Shareholder is hereby granted an option to
require the Company to purchase, for the Purchase Price and upon the terms set
forth in this Agreement, any or all of the shares of Stock that Shareholder now
owns if an Exercise Event occurs.
2.2. No Restrictions on Transfers. The Shareholder or the executor or
legal representative of Shareholder may sell all or any part of the Stock. If
all of the Stock is sold by the Shareholder, or his executors or legal
representatives, this Agreement shall terminate and be null and void. If all or
any part of the Stock is transferred to conveyed by gift or devise by the
Shareholder or the Shareholder's executor or legal representative, this
Agreement shall remain in full force and effect and may be enforced by such
executor or legal representative.
SECTION 3 DELIVERY OF EVENT NOTICE
3.1. Generally. Upon the occurrence of an Exercise Event, the
Shareholder or the Shareholder's executor or legal representative may give the
Company notice at any time thereafter (the "Event Notice") of the occurrence of
that Exercise Event and the date of that occurrence.
3.2. Contents of Event Notice. If given, the Event Notice shall specify
that the Shareholder is requiring that the Company purchase all of the Stock at
the Purchase Price.
SECTION 4 THE CLOSING
4.1. Closing Time and Place. Unless otherwise mutually agreed to by the
Shareholder and the Company, (a) the consummation of the sale and purchase of
the Stock (the "Closing") will occur on the earlier of twenty (20) business days
after: (i) the parties hereto have mutually agreed in writing on the Purchase
Price of the Shares; or (ii) the Appraiser has prepared and delivered to the
parties hereto a written report specifying the Fair Market Value of the Stock.
If prior to the Closing any offer ("Offer")is made to purchase all of the assets
or outstanding shares of the Company's common stock or to merge the Company into
another legal entity, the Closing may be postponed by the Shareholder or the
Company to allow the Shareholder to determine whether to accept the Offer or
proceed with a sale of the Stock to the Company. If the Shareholder elects to
postpone the Closing, the Shareholder may accept the Offer, in which event the
Company shall not be required to purchase the Stock, and (b) the Closing will be
held at the offices of the Company, Xxxxxxx, Xxxxxx County, Texas.
4.2. Closing Deliveries.
(a) The Purchase Price. The Purchase Price shall be paid in
cash or by certified bank or cashier's check at the Closing. If Stock
is changed, reclassified, split, combined, converted, or exchanged for
other securities or any securities are paid as dividends on the Stock
after the date as of which the Purchase Price is determined and before
the Closing of the sale of the Optioned Shares, appropriate adjustment
shall be made to the Exercise Price to give effect to such change,
reclassification, split, combination, conversion, exchange, or
dividend.
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(b) The Stock. At the Closing, the Shareholder shall deliver
to the Company the certificates representing the Stock being purchased,
duly endorsed for transfer or accompanied by a duly executed stock
power. The Shareholder shall covenant that the Stock sold are free and
clear of all liens, claims, and encumbrances of any nature whatsoever.
(c) Other. All other action shall be taken at the Closing as
the Shareholder and Company shall reasonably request to effect the
purchase and sale of the Stock.
SECTION 5 MISCELLANEOUS PROVISIONS
5.1. Specific Performance. Each party declares that it is impossible to
measure in money the damages that will accrue to the other parties hereto by
reason of a failure to perform or a breach in the performance of any of its
obligations under this Agreement, and each party (a) agrees that the other
parties to this Agreement shall be entitled to specific performance of the terms
of this Agreement and injunctive and other equitable relief in case of any
failure, breach or attempted breach and (b) waives any reimbursement for the
securing or posting of any bond in connection with the obtaining of any such
injunctive or other equitable relief. If any party to this Agreement institutes
any action or proceeding to specifically enforce the provisions hereof (a
"plaintiff"), any party against whom that action or proceeding is brought (a
"defendant") waives the claim or defense that the plaintiff has an adequate
remedy at law, and the defendant will not urge in any such action or proceeding
the claim or defense that such remedy at law exists.
5.2 . Notices. Whenever any notice is required or permitted hereunder,
that notice must be in writing. Any notice required or permitted to be delivered
hereunder shall be deemed to be delivered, given and received on the date it is
personally received by (and receipt acknowledged in writing by) the Person who
is to receive it or, if mailed, whether actually received or not, on the third
business day after it is deposited in the United States mail, certified or
registered mail, return receipt requested, postage prepaid, addressed to the
Person who is to receive it at the address that such Person has theretofore
specified by written notice delivered in accordance herewith. Any Person
entitled to receive notice hereunder may change, at any time and from time to
time, by written notice to the other parties, the address that such party had
theretofore specified for receiving notices. Until changed in accordance
herewith, each party hereby specifies as such party's address for receiving
notices the address adjacent to such party's name on the signature page hereof.
In the event more than one Person is to receive notice hereunder, notice shall
not be deemed delivered or received until delivery is deemed to be made to the
last Person who is to receive that notice (provided that any such Person may
agree that notice shall be deemed to be delivered or received by that Person as
of any earlier date).
5.3. Further Assurances. Each of the parties hereto agrees to take, at
its own expense, such further action as may be reasonably requested by any other
party hereto necessary or desirable to accomplish or effect the purposes of this
Agreement and the transactions contemplated hereby.
5.4. Multiple Counterparts. This Agreement may be executed in a number
of identical counterparts and it shall not be necessary for each party to
execute each of such counterparts, but when all of the parties have executed and
delivered one or more of such counterparts, the several parts, when taken
together, shall be deemed to constitute one and the same instrument, enforceable
against each party in accordance with its terms. In making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart executed by the Person against whom enforcement of this
Agreement is sought.
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5.5. Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties, or undertakings, other than those set forth or referred to herein,
with respect to the right of Company or the Shareholder to sell Stock now or
hereafter held by that Person. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
5.6. Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws effective
during the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid, or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of each such illegal,
invalid, or unenforceable provision, there shall be added automatically as a
part of this Agreement a provision as similar in terms to such illegal, invalid,
or unenforceable provision as may be possible and be legal, valid, and
enforceable.
5.7. Termination. This Agreement shall terminate (a) upon the execution
of a termination agreement signed by all Persons who are parties to this
Agreement, (b) automatically upon the sale of the Stock as provided herein.
5.8. Amendments. This Agreement may be amended at any time and from
time to time, in whole or in part, by an instrument in writing setting forth the
particulars of such amendment duly executed by the Person against whom
enforcement of that amendment is sought.
5.9. Successors and Assigns. Except as otherwise expressly stated to
the contrary herein, this Agreement shall be binding upon and inure to the
benefit of each party hereto and shall be binding upon their respective heirs,
successors, executors, representatives, and assigns.
5.10. References. Whenever herein the singular number is used, the same
shall include the plural where appropriate, and vice versa; and words of any
gender shall include each other gender where appropriate.
5.11. Captions. The captions, headings, and arrangements used in this
Agreement are for convenience only and do not in any way affect, limit, amplify,
or modify the terms and provisions hereof.
5.12. Governing Law. The laws of the state of Texas and of the United
States of America shall govern the validity, construction, enforcement, and
interpretation of this agreement, without reference to conflicts of law.
5.13. After-Acquired Shares. Whenever the Shareholder (or its spouse)
shall hereafter acquire any shares of Stock of the Company, the shares so
acquired shall be held subject to all the terms and conditions of this
Agreement.
5.15. Arbitration. In the event of any dispute, interpretation or
disagreement concerning this Agreement (the "Dispute"), such Dispute shall be
settled by binding arbitration to be held in Dallas, Dallas County, Texas.
ARBITRATION OF DISPUTES. WITH RESPECT TO THE ARBITRATION OF ANY
DISPUTE, THE PARTIES HEREBY ACKNOWLEDGE AND AGREE THAT:
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1. ARBITRATION IS FINAL AND BINDING ON THE PARTIES;
2. THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT,
INCLUDING THEIR RIGHT TO JURY TRIAL;
3. PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED AND
DIFFERENT FROM COURT PROCEEDINGS;
4. THE ARBITRATOR'S AWARD IS NOT REQUIRED TO INCLUDE FACTUAL
FINDINGS OR LEGAL REASONING AND ANY PARTNER'S RIGHT TO APPEAL
OR TO SEEK MODIFICATION OF FILINGS BY THE ARBITRATORS IS
STRICTLY LIMITED; AND
IN THE EVENT THAT A DISPUTE ARISES BETWEEN ANY PARTY HERETO, SAID
DISPUTE ARISING OUT OF, IN CONNECTION WITH OR AS A RESULT OF THIS AGREEMENT OR
THE ACTION OF ANY PARTY, THE PARTIES HEREBY EXPRESSLY AGREES THAT SAID DISPUTE
SHALL BE RESOLVED THROUGH ARBITRATION RATHER THAN LITIGATION. EACH PARTY HEREBY
AGREES TO SUBMIT THE DISPUTE FOR RESOLUTION TO THE AMERICAN ARBITRATION
ASSOCIATION, WITHIN FIVE (5) DAYS AFTER RECEIVING A WRITTEN REQUEST TO DO SO
FROM ANY OF THE PARTIES. IF A PARTY FAILS TO SUBMIT THE DISPUTE TO ARBITRATION
AS REQUESTED, THEN THE OTHER PARTY MAY COMMENCE AN ARBITRATION PROCEEDING. EACH
PARTY AGREES THAT ANY HEARING SCHEDULED BY THE AAA SHALL TAKE PLACE IN DALLAS,
TEXAS, AND THAT THE TEXAS ARBITRATION ACT SHALL GOVERN THE PROCEEDINGS AND ALL
ISSUES RAISED UNDER THIS AGREEMENT TO ARBITRATE. IF ANY PARTY SHALL INSTITUTE
ANY COURT PROCEEDING IN AN EFFORT TO RESIST ARBITRATION AND BE UNSUCCESSFUL IN
RESISTING, THE PREVAILING PARTY SHALL BE ENTITLED TO RECOVER FROM THE LOSING
PARTY ITS LEGAL FEES AND ALL EXPENSES INCURRED IN CONNECTION WITH THE DEFENSE OF
SUCH LEGAL PROCEEDING OR ITS EFFORTS TO ENFORCE ITS RIGHTS TO ARBITRATION AS
PROVIDED HEREIN.
SECTION 6 COMPANY CAPITAL
The Company shall not be obligated to purchase the Stock if at the time
of such purchase the capital of the Company would be impaired under applicable
laws. If the Company's capital would be impaired by the purchase of the Stock,
the Closing shall be delayed until such time as the capital of the Company is
not impaired. The Company agrees to take such reasonable actions as the
Company's board of directors believe are reasonable to permit the Company to
purchase the Stock without impairing the capital of the Company.
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IN WITNESS WHEREOF, the parties have executed this Agreement or a
Spousal Consent on the dates set forth below, to be effective as of the date
first written above.
Address: MICROPAC INDUSTRIES, INC.
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx X. Xxxx
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Title: President & CEO
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Date: March 13, 2001
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SHAREHOLDER
Address: By: /s/ N. Nodolsky
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----------------------------- Xxxxxxxx Xxxxxxxx
Date: March 13, 2001
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