STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated July 2, 1998,
between Snap-On Incorporated, a Delaware corporation (the "Seller"), and
The Northern Trust Company, not in its individual or corporate capacity,
but solely in its capacity as trustee (the "Trustee") of the Trust (the
"Trust", which is hereinafter sometimes referred to as the "Purchaser")
under a trust agreement between the Seller and the Trustee dated July 2,
1998 (the "Trust Agreement").
WHEREAS, as contemplated by the Trust Agreement, the Purchaser is
to purchase from the Seller, and the Seller is to issue and sell to the
Purchaser from Seller's treasury, an aggregate of 7,100,000 shares (the
"Acquired Shares") of the common stock, par value $1.00 per share, of
Seller ("Common Stock"), all as more specifically provided herein;
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and
conditions herein set forth, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
SECTION 1.1 Purchase and Sale. Subject to the terms and
conditions set forth herein, at the Closing (as defined below) the Seller
will issue and sell to the Purchaser, and the Purchaser will purchase from
the Seller, the Acquired Shares and, in consideration for the Acquired
Shares, the Purchaser will deliver to the Seller a note substantially in
the form of Appendix I to this Agreement in the principal amount of
$260,037,500 (the "Note"). The Seller has determined such principal amount
based on the closing price per share of Common Stock on the New York Stock
Exchange on the business day immediately preceding the Closing (as
hereinafter defined).
SECTION 1.2 Closing. The closing of the sale and purchase of
the Acquired Shares hereunder (the "Closing") will be held at the offices
of the Seller on the date of execution and delivery of this Agreement by
the Seller and the Purchaser, or at such other date and place as may be
mutually agreed upon by the Seller and the Purchaser.
SECTION 1.3 Delivery and Payment. At the Closing, the Seller
will deliver to the Purchaser a certificate representing the Acquired
Shares, which certificate shall be registered in the name of the Trustee,
or the name of its nominee, against payment by the Purchaser to the Seller
of the aggregate consideration set forth in Section 1.1 therefor. The
Seller will pay all stamp and other transfer taxes, if any, that may be
payable in respect of the sale and delivery of the Acquired Shares.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Purchaser, as of the
date of this Agreement, as follows:
SECTION 2.1 Corporate Existence and Authority. The Seller (a) is
a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware, (b) has all requisite corporate power to
execute, deliver and perform this Agreement and (c) has taken all necessary
corporate action to authorize the execution, delivery and performance of
this Agreement.
SECTION 2.2 No Conflict. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby
will violate, conflict with or constitute a default under (a) the Seller's
certificate of incorporation or bylaws, (b) any agreement, indenture or
other instrument to which the Seller is a party or by which the Seller or
its assets may be bound or (c) any law, regulation, order, arbitration,
award, judgment or decree applicable to the Seller.
SECTION 2.3 Validity. This Agreement has been duly executed and
delivered by the Seller and is a valid and binding agreement of the Seller
enforceable against the Seller in accordance with its terms, except as the
enforceability thereof may be limited by any applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other laws
affecting the enforcement of creditors' rights generally, and by general
principles of equity.
SECTION 2.4 The Acquired Shares. The Acquired Shares have been
duly authorized and when sold as contemplated hereby will be validly
issued, fully-paid and nonassessable shares of the Seller. No stockholder
of the Seller has any preemptive or other subscription right to acquire any
Acquired Shares. The Seller will convey to the Purchaser, on the date of
Closing, good and valid title to the Common Shares, free and clear of any
liens, claims, security interests and encumbrances, except for those liens,
claims, security interests and encumbrances described in the Note and
subject to Section 3.3 of the Trust Agreement (relating to the delivery of
trust assets to general creditors of the Company).
SECTION 2.5 Litigation. There are no actions, suits,
proceedings, arbitrations or investigations pending, or to the Seller's
knowledge, threatened in any court or before any governmental agency or
instrumentality or arbitration panel or otherwise against or by the Seller
which seek to or could restrain, prohibit, rescind or declare unlawful, or
result in substantial damages in respect of, this Agreement or the
performance hereof by the Seller (including, without limitation, the
delivery of the Acquired Shares).
SECTION 2.6 Business and Financial Information. Seller has
previously delivered to Purchaser copies of (a) the consolidated balance
sheets of Seller and its subsidiaries, as of January 3, 1998 and December
28, 1996, and the related consolidated statements of operations,
stockholders' equity and cash flows for the fiscal years then ended, as
reported in Seller's Annual Report on Form 10-K for the fiscal year ended
January 3, 1998, filed with the Securities and Exchange Commission (the
"SEC") under the Securities Exchange Act of 1934, as amended (the "1934
Act"), and (b) the unaudited consolidated balance sheet of Seller and its
subsidiaries as of March 29, 1997, and March 28, 1998, and the related
unaudited consolidated statements of operations, stockholders' equity and
cash flows for the quarterly periods then ended as reported in Seller's
Quarterly Report on Form 10-Q for the period ended March 28, 1998, filed
with the SEC under the Exchange Act. The January 3, 1998 consolidated
balance sheet of Seller (including the related notes, where applicable)
fairly presents the consolidated financial position of Seller and its
subsidiaries as of the date thereof, and the other financial statements
referred to in this Section 2.6 (including the related notes, where
applicable) fairly present (subject, in the case of the unaudited
statements, to recurring audit adjustments normal in nature and amount) the
results of the consolidated operations and changes in stockholders' equity
and consolidated financial position of Seller and its subsidiaries for the
respective fiscal periods or as of the respective dates therein set forth.
Since January 3, 1998, Seller has filed with the SEC all forms, reports and
documents required pursuant to the Securities Act of 1933, as amended (the
"1933 Act"), and the 1934 Act, to be filed by it (the "Disclosure
Documents"). At the time filed, all of the Disclosure Documents complied
as to form in all material respects with all applicable requirements of
such Acts. None of the Disclosure Documents, at the time filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Seller as
follows:
SECTION 3.1 Authority; Validity. The Purchaser has full power
and authority under the Trust to execute and deliver this Agreement and the
Note and to consummate the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Trustee
on behalf of the Trust and is a valid and binding agreement of the
Purchaser enforceable in accordance with its terms, except as the
enforceability thereof may be limited by any applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other laws
affecting the enforcement of creditors' rights generally, and by general
principles of equity. The Note has been duly authorized by the Trustee on
behalf of the Trust and, upon the execution and delivery by the Trustee on
behalf of the Trust, the Note will be a valid and binding agreement of the
Purchaser enforceable in accordance with its terms, except as the
enforceability thereof may be limited by any applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other laws
affecting the enforcement of creditors' rights generally, and by general
principles of equity.
SECTION 3.2 No Conflict. To the best of the Purchaser's
knowledge, none of the execution and delivery of this Agreement, the
execution and delivery of the Note, and the consummation of the
transactions contemplated hereby and thereby will violate, conflict with or
constitute a default under (a) the terms of the Trust, (b) any agreement,
indenture or other instrument to which the Trust is a party or by which the
Trust or its assets may be bound or subject or (c) any law, regulation,
order, arbitration award, judgment or decree applicable to the Trust.
ARTICLE IV
RESTRICTIONS ON DISPOSITION OF THE COMMON SHARES
SECTION 4.1 Restricted Securities. The Purchaser acknowledges
that the Purchaser is acquiring the Acquired Shares pursuant to a
transaction exempt from registration under the 1933 Act. The Purchaser
represents, warrants and agrees that all Acquired Shares acquired by the
Purchaser pursuant to this Agreement are being acquired for investment
without any intention of making a distribution thereof, or of making any
sale or other disposition thereof which would be in violation of the 1933
Act or any applicable state securities law, and that the Purchaser will not
dispose of any of the Acquired Shares, except that the Trustee may, from
time to time, convey a portion of the Acquired Shares pursuant to the terms
of the Trust Agreement.
SECTION 4.2 Legend. Until such time as the Acquired Shares are
registered pursuant to the provisions of the 1933 Act, any certificate or
certificates representing the Acquired Shares delivered pursuant to Section
1.3 will bear a legend in substantially the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may
not be sold, transferred or otherwise disposed of unless they
have first been registered under such Act or unless an exemption
from registration is available."
The Seller may place stop transfer orders against the registration of
transfer of any share evidenced by such a certificate or certificates until
such time as the requirements of the foregoing are satisfied.
ARTICLE V
COVENANTS OF SELLER
The Seller agrees that:
SECTION 5.1 Financial Statements, Reports and Documents.
Subsequent to the Closing, and for as long as any of the Acquired Shares
are held by the Trust (unless the Trustee shall otherwise consent in
writing), the Seller shall deliver to the Trustee each of the following:
(a) Annual Statements. As soon as available and in any
event within one hundred twenty (120) days after the close of each fiscal
year of the Seller, copies of the consolidated balance sheet of the Seller
and its subsidiaries as of the close of such fiscal year and the
consolidated statement of operations, consolidated statement of changes in
stockholders' equity and consolidated statement of cash flow of the Seller
and its subsidiaries for such fiscal year, in each case setting forth in
comparative form the figures for the preceding fiscal year, all in
reasonable detail and accompanied by an opinion thereon of Xxxxxx Xxxxxxxx
LLP, or of other independent public accountants of recognized national
standing, to the effect that such financial statements have been prepared
in accordance with generally accepted accounting principles and that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted auditing
standards and, accordingly, include such tests of the accounting records
and such other auditing procedures as were considered necessary in the
circumstances;
(b) SEC and Other Reports. Promptly upon their becoming
available, one copy of each financial statement, report, notice or proxy
statement sent by the Seller to stockholders generally and of each regular
or periodic report, registration statement or prospectus (other than any
registration statement on Form S-8 and its related prospectus) filed by the
Seller with the Securities and Exchange Commission or any successor agency;
and
SECTION 5.2 Registration. The Seller shall take all actions
necessary or appropriate, at its own expense, to ensure that prior to any
disposition of Acquired Shares by the Trustee in accordance with the Trust
Agreement, a registration statement has been filed with the Securities and
Exchange Commission (and remains effective) with respect to the Acquired
Shares being so disposed. The Seller shall also use its commercially
reasonable efforts to register or qualify such Acquired Shares under the
securities blue sky laws of such jurisdictions within the United States as
the Trustee may reasonably request, within seventy-five (75) days of such
request; provided, however, that the Seller shall not be required to
consent to general service of process for all purposes in any jurisdiction
where it is not then qualified.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Expenses. The Seller shall pay all of its expenses,
and it shall pay the Purchaser's expenses, in connection with the
authorization, preparation, execution and performance of this Agreement,
including without limitation the reasonable fees and expenses of the
Trustee, its agents, representatives, counsel, financial advisors and
consultants.
SECTION 6.2 Notices. All notices, requests, or other
communications required or permitted to be delivered hereunder shall be in
writing, delivered by registered or certified mail, return receipt
requested, as follows:
(a) To the Seller:
Snap-On Incorporated
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxx 00000-0000
Attention: General Counsel
(b) To the Purchaser:
The Northern Trust Company
00 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx Xxxxxx
Any party hereto may from time to time, by written notice given as
aforesaid, designate any other address to which notices, requests or other
communications addressed to it shall be sent.
SECTION 6.3 Specific Performance. The parties hereto
acknowledge that damages would be an inadequate remedy for any breach of
the provisions of this Agreement and agree that the obligations of the
parties hereunder shall be specifically enforceable, and neither party will
take any action to impede the other from seeking to enforce such rights of
specific performance.
SECTION 6.4 Successors and Assigns; Integration; Assignment.
This Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective legal
representatives, successors and assigns. This Agreement (a) constitutes,
together with the Note, the Trust Agreement and any other written
agreements between the Purchaser and the Seller executed and delivered on
the date hereof, the entire agreement between the parties hereto and
supersedes all other prior agreements and understandings, both written and
oral, among the parties, with respect to the subject matter hereof, (b)
shall not confer upon any person other than the parties hereto any rights
or remedies hereunder and (c) shall not be assignable by operation of law
or otherwise, except that the Trustee may assign all its rights hereunder
to any corporation or other institution exercising trust powers in
connection with any such institution assuming the duties of a trustee under
the Trust.
SECTION 6.5 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to its conflicts of law doctrine.
SECTION 6.6 Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable to consummate
and make effective the transactions contemplated by this Agreement.
SECTION 6.7 Amendment and Waiver. No amendment or waiver of any
provision of this Agreement or consent to departure therefrom shall be
effective unless in writing and signed by the Purchaser and the Seller.
SECTION 6.8 Counterparts. This Agreement may be executed in any
number of counterparts with the same effect as if the signatures thereto
were upon one instrument.
SECTION 6.9 Certain Limitations. The execution, delivery and
performance by the Trustee of this Agreement have been, and will be,
effected by the Trustee, solely in its capacity as Trustee under the terms
of the Trust and not in its individual or corporate capacity. Nothing in
this Agreement shall be interpreted to increase, decrease or modify in any
manner any liability of the Trustee to the Seller or to any trustee,
representative or other claimant by right of the Seller resulting from the
Trustee's performance of its duties under the constituent instruments of
the Trust.
SECTION 6.10 Incorporation. The terms and conditions of the
Trust Agreement relating to the nature of the responsibilities of the
Trustee and the indemnification of the Trustee by the Seller are
incorporated herein by reference and made applicable to this Agreement.
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement on the date and year first above written.
SNAP-ON INCORPORATED
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President, Secretary
and General Counsel
THE NORTHERN TRUST COMPANY,
solely in its capacity as
trustee under the Trust
Agreement
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
