UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment and Restatement)*
PRAB, INC.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
739413-10-2
(CUSIP Number)
J. Darrel Barros, Esq., Dykema Gossett PLLC 400 Renaissance Center,
Detroit, Michigan 48243 (313) 568-6830
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
October 31, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*This filing, submitted via EDGAR, represents the first electronic amendment
to a paper format Schedule 13D. Therefore, pursuant to Rule 101(a)(2)(ii)
of Regulation S-T this filing includes a restatement of all previously filed
Schedule Ds.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act.
<PAGE>
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
State Treasurer of State of Michigan [38-6000134]
See Attachment A
2 Check The Appropriate Box If A Member Of A Group* (a)[ ]
(b)[ ]
Not member of group
3 SEC Use Only
4 Source of Funds*
00; See Attachment A
5 Check Box If Disclosure Of Legal Proceedings Is [ ]
Required Pursuant To Items 2(d) or 2(e)
Not Applicable
6 Citizenship Or Place of Organization
See Attachment A
7 Sole Voting Power
Number Of 366,667
Shares 8 Shared Voting Power
Beneficially
Owned By None
Each 9 Sole Dispositive Power
Reporting
Person 366,667
With 10 Shared Dispositive Power
None
11 Aggregate Amount of Beneficially Owned By Each Reporting Person
366,667
12 Check Box If The Aggregate Amount In Row (11) Excludes [ ]
Certain Shares*
None
13 Percent Of Class Represented By Amount In Row (11)
22.4
14 Type Of Reporting Person*
00; See Attachment A
<PAGE>
EXPLANATORY STATEMENT
The Statement on Schedule 13D, originally filed on or about February
5, 1987, and as subsequently amended by Amendment No. 1 thereto filed on or
about November 11, 1992, by the State of Treasurer of the State of Michigan,
as Custodian for Four Retirement Systems specified on Attachment A (the
"Reporting Person"), is hereby further amended by this Amendment to and
Restatement of Schedule 13D (as mandated by Rule 101(a)(2)(ii) of Regulation
S-T).
Item 1. Security and Issuer.
Common Stock,*
Prab, Inc.
5944 East Kilgore Road
Kalamazoo, Michigan 49003
*The Reporting Person actually owns 366,667 shares of the Issuer's
Convertible Preferred Stock which may be converted one-for-one into Issuer
Common Stock as of the exercise date of November 1, 1994. Pursuant to Rule
13d-3(d)(1)(i) of the Securities Exchange Act of 1934, these shares are
deemed to be equivalent to the Issuer's Common Stock for purposes of
determining the percentage of beneficial ownership on Schedule 13D.
Item 2. Identity and Background.
See Attachments A and B.
Item 3. Source and Amount of Funds of Other Consideration.
See Attachment A.
Item 4. Purpose of Transaction.
On October 31, 1996, the Reporting Person entered into certain
transactions which resulted in a material decrease in the Reporting Person's
beneficial ownership of Prab, Inc. (the "Issuer") stock. The transactions
are the result of an agreement between the Issuer's Plan (as defined herein)
and the Reporting Person, Stock Purchase and Sale Agreement (52,897 shares
of Prab, Inc. Stock), and an agreement between Issuer and the Reporting
Person, Stock Purchase and Sale Agreement (3,247,103 shares of Prab, Inc.
Stock), (collectively, the "Agreements") wherein the Reporting Person agreed
to sell certain shares of the Issuer's stock to the Issuer and the Issuer's
Salaried Employees Profit Sharing Plan (the "Plan").
The relevant terms of the Agreements and the transactions which
resulted therefrom are as follows:
1. Redemption of Outstanding Non-Convertible Preferred Stock.
Issuer redeemed 600,000 shares of its outstanding Non-Convertible
Preferred Stock held by Reporting Person for $300,000, or $.50 per
share, plus accrued and unpaid dividends.
2. Purchase of Common Stock and Convertible Preferred Stock.
Issuer purchased 1,013,770 shares of its Common Stock and 1,633,333
shares of its Convertible Preferred Stock owned by Reporting Person
for $1.35 per share, or a total of $3,573,589.05, plus accrued and
unpaid dividends.
3. Purchase of Common Stock by Issuer's Employee Stock Purchase
Plan. The Plan purchased 52,897 shares ("Plan Shares") of Common
Stock of Issuer owned by Reporting Person for $1.35 per share, or a
total of $71,410.95.
4. Purchase of Additional Convertible Preferred Stock. Until
October 31, 1999, Issuer will cause the Plan to purchase from
Reporting Person any Issuer Common Stock that the Plan intends to
purchase, provided that such purchase does not result in the loss of
a significant portion of the net operating loss tax benefits
<PAGE>
retained by Issuer, such determination to be made by Issuer in its
sole discretion. Such purchase will be accomplished by the Plan
notifying Reporting Person of the number of shares of Issuer Common
Stock that it desires to purchase. Reporting Person will then
convert that number of shares from Convertible Preferred Stock to
Common Stock and then sell such stock to the Plan at the then
prevailing fair market price. Reporting Person is not obligated to
sell shares of Issuer Common Stock to the Plan if the sales price is
less than $1.35 per share.
5. Limitations on Sale of Stock. Reporting Person has agreed
not to purchase or otherwise acquire any additional Issuer stock nor
pledge, sell, or otherwise dispose of any of its Issuer stock, other
than to Issuer or the Plan, for three years following October 31,
1996 ("Restrictive Period"), except with the prior written consent
of the Issuer. Issuer must grant such consent unless there is a
reasonable risk that an "ownership change" will occur (for purposes
of the Internal Revenue Code).
Reporting Person has also agreed not to enter into any
agreements during the Restrictive Period for the acquisition or
disposition of the Issuer's stock except where such transfers of
shares would not be consummated until after the end of the
Restrictive Period.
6. Board Attendance. Reporting Person has the right to
designate a representative to attend any meeting, whether regular or
special, including telephone meetings, of the Board of Directors of
Issuer. Issuer must provide notice to Reporting Person of each such
meeting in the same manner and at the same time the Directors are
given such notice. The representative of Reporting Person has the
right to participate in such meeting, but not to vote thereat, and
to receive all minutes of such meetings and all other materials as
the Directors receive from Issuer.
As previously reported, on October 30, 1992, the Reporting Person
was involved in a restructuring of certain debt owed by the Issuer
to the Reporting Person as evidenced by the Issuer's 9 7/8%
Convertible Subordinated Notes due on October 31, 1993 (the "Notes")
originally acquired by the Reporting Person on January 6, 1987. In
consideration for the cancellation of an aggregate principal amount
of $4,000,000 of the Notes plus accrued interest and charges
thereon, the Issuer paid $400,000 cash to the Reporting Person and
issued to the Reporting Person: (a) 666,667 shares of its Common
Stock to the Reporting Person (in consideration of cancellation of
$500,000 of the debt); (b) 2,000,000 shares of the Issuer's
Convertible Preferred Stock (in consideration of cancellation of
$1,500,000 of the debt); (c) 600,000 shares of the Issuer's
Non-convertible Preferred Stock (in consideration of cancellation of
$300,000 of the debt); and (d) a restated promissory note in the
original principal amount of $2,483,902.78 for the balance of the
debt.
All of the shares of capital stock of the Issuer were
acquired by the Reporting Person for investment purposes. SMRS may
consult with the Issuer or other persons about the Issuer and its
business from time to time and, except where expressly prohibited by
agreement with the Issuer, may acquire additional shares of Issuer
Common Stock from time to time in the open market, in privately
negotiated transactions or otherwise or may dispose of the shares of
Issuer Common Stock held. SMRS has no other present plans or
proposals with respect to the Issuer of the kind set forth under
Item 4 of the Schedule 13D Instructions.
<PAGE>
Item 5. Interest in Securities of the Issuer.
(a) The Reporting Person beneficially owns 366,667* shares of
Common Stock, representing 22.4% of the class of outstanding
Common Stock.
(b) Notwithstanding the understandings set forth in Items 4 and
6, the Reporting Person has the sole power to vote and to
direct the vote and sole power to dispose or to direct the
disposition of 366,667* shares of Common Stock. The
Reporting Person does not share such powers with respect to
any of the shares.
(c) See the description of the transaction provided in Item 4
which was effected on October 31, 1996.
*The Reporting Person actually owns 366,667 shares of the Issuer's
Convertible Preferred Stock which may be converted one-for-one into Issuer
Common Stock as of the exercise date of November 1, 1994. Pursuant to Rule
13d-3(d)(1)(i) of the Securities Exchange Act of 1934, these shares are
deemed to be equivalent to the Issuer's Common Stock for purposes of
determining the percentage of beneficial ownership on Schedule 13D.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
See the description of the transactions provided in Item 4 which was
effected on October 31, 1996.
The October 30, 1992 transaction described in Item 4 included a loan
from the Reporting Person to the Issuer, as evidenced by the
Issuer's 10% Subordinated Notes in the original aggregate principal
amount of $2,483,902.78, due October 31, 1999 (the "Note").
Pursuant to the Registration Rights and Shareholders Agreement (the
"Registration Rights Agreement"), the shares of capital stock owned
by the Reporting Person may be transferred by the Reporting Person
only after giving written notice to the Issuer of such transfer and,
with respect to the transfer of Convertible Preferred Stock, subject
to the right of first refusal of the Issuer to purchase such shares.
The Reporting Person is also a party to a Shareholders Agreement
among the Issuer, the Chairman of the Board of the Issuer, and the
Chairman as Trustee under a Revocable Trust Agreement (the "Trust")
which restricts acquisitions and dispositions of shares of any class
of stock of the Issuer held by the Chairman or the Trust during the
Restrictive Period.
On November 1, 1994, the Convertible Preferred Stock became
convertible into Common Stock on a share for share basis, subject to
certain anti-dilution rights set forth in the Issuer's Articles of
Incorporation. The holders of the Convertible Preferred Stock have
the right to nominate and elect one member of the Board of Directors
of the Issuer.
Item 7. Material to be Filed as Exhibits.
1. Stock Purchase and Sale Agreement (3,247,103 shares of Prab,
Inc. Stock) dated October 31, 1996, between Reporting Person
and Issuer.
2. Stock Purchase and Sale Agreement (52,897 shares of Prab,
Inc. Stock) dated October 31, 1996, between Reporting Person
and the Plan.
3. Shareholder Agreement, dated October 31, 1996 between John
J. Wallace individually and as Trustee under The John J.
Wallace Revocable Trust and Reporting Person.
<PAGE>
ATTACHMENT A
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
("Reporting Person")
I. Reporting Person
Pursuant to State Law (Section 91 of Act No. 380 of the Public Acts of 1965,
as amended), the State Treasurer, State of Michigan is the investment
fiduciary for the following four State sponsored retirement systems: Public
School Employees' Retirement System; State Employees' Retirement System;
Michigan State Police Retirement System; and Michigan Judges' Retirement
System.
The Michigan Department of Treasury's Bureau of Investments performs the
investment function, under the direction and on behalf of the State
Treasurer.
The aforementioned State Law created an Investment Advisory Committee
comprised of the Director of the Department of Commerce (the successor to
which is the Department of Consumer and Industry Affairs), the Director of
the Department of Management & Budget, or their duly authorized
representatives, and three public members appointed by the Governor with the
advice and consent of the Senate. The committee meets quarterly and reviews
investments, goals, and objectives, and may submit recommendations to the
State Treasurer. The Investment Advisory Committee may also, by a majority
vote, direct the State Treasurer to dispose of any holdings which in the
committee's judgment is not suitable for the funds involved, and may by
unanimous vote direct the State Treasurer to make specific investments.
Act No. 314 of the Public Acts of 1965, as amended, authorizes the
investment of assets of public employee retirement systems or plans created
and established by the state or any political subdivision.
The acquisition of equity securities are made for investment purposes only.
Investments in equity securities are made from the assets of the
aforementioned four retirement systems with total assets of approximately
$31 billion. The retirement systems derive revenue from employer and
employee contributions, court fees, and investment income.
<PAGE>
ATTACHMENT B
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
Name: Douglas B. Roberts
Business Address: Department of Treasury
P.O. Box 15128
Lansing, Michigan 48901
Principal Occupation: State Treasurer
State of Michigan
P.O. Box 15128
Lansing, Michigan 48901
Criminal convictions during the last five years: None
Civil finding or violation, or injunction against violation, of federal or
state securities laws during the last five years:
None
Citizenship: United States of America
<PAGE>
ATTACHMENT B
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
Name: Nick A. Khouri
Business Address: Department of Treasury
P.O. Box 15128
Lansing, Michigan 48901
Principal Occupation: Chief Deputy State Treasurer
State of Michigan
P.O. Box 15128
Lansing, Michigan 48901
Criminal convictions during the last five years: None
Civil finding or violation, or injunction against violation, of federal or
state securities laws during the last five years:
None
Citizenship: United States of America
<PAGE>
ATTACHMENT B
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
INVESTMENT ADVISORY COMMITTEE
Name: Dr. Paul W. McCrackin
Business Address: University of Michigan
School of Business Administration
701 Tappan
Ann Arbor, Michigan 48109
Principal Occupation: Professor
Criminal convictions during the last five years: None
Civil finding or violation, or injunction against violation, of federal or
state securities laws during the last five years:
None
Citizenship: United States of America
<PAGE>
ATTACHMENT B
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
INVESTMENT ADVISORY COMMITTEE
Name: Mr. Samuel Valenti, III
Business Address: Masco Corporation
21001 Van Born Road
Taylor, Michigan 48180
Principal Occupation: Vice President of Investments
Criminal convictions during the last five years: None
Civil finding or violation, or injunction against violation, of federal or
state securities laws during the last five years:
None
Citizenship: United States of America
<PAGE>
ATTACHMENT B
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
INVESTMENT ADVISORY COMMITTEE
Name: Mr. Farris W. Womack
Business Address: University of Michigan
Room 3014
Fleming Administrative Building
503 Thompson Street
Ann Arbor, Michigan 48109
Principal Occupation: Executive Vice Presidnet and CFO
Criminal convictions during the last five years: None
Civil finding or violation, or injunction against violation, of federal or
state securities laws during the last five years:
None
Citizenship: United States of America
<PAGE>
ATTACHMENT B
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
INVESTMENT ADVISORY COMMITTEE
Name: Kathleen M. Wilbur
Business Address: Department of Consumer and Industry Affairs
Director's Office
4th Floor, Law Building
Box 30004
Lansing, Michigan 48909
Principal Occupation: Director, Michigan Department of Consumer
and Industry Affairs
Criminal convictions during the last five years: None
Civil finding or violation, or injunction against violation, of federal or
state securities laws during the last five years:
None
Citizenship: United States of America
<PAGE>
ATTACHMENT B
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
INVESTMENT ADVISORY COMMITTEE
Name: Mr. Mark A. Murray
Business Address: Department of Management and Budget
Director's Office
Cass Building, First Floor
Box 30026
Lansing, Michigan 48909
Principal Occupation: Director, Michigan Department of Management and
Budget
Criminal convictions during the last five years: None
Civil finding or violation, or injunction against violation, of federal or
state securities laws during the last five years:
None
Citizenship: United States of America
<PAGE>
ATTACHMENT B
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
INVESTMENT OFFICERS
Name: Barry L. Stevens
Business Address: Michigan Department of Treasury
P.O. Box 15128
Lansing, Michigan 48901
Principal Occupation: Director of Investments
Criminal convictions during the last five years: None
Civil finding or violation, or injunction against violation, of federal or
state securities laws during the last five years:
None
Citizenship: United States of America
<PAGE>
ATTACHMENT B
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
INVESTMENT OFFICERS
Name: Gordon H. Lindsay
Business Address: Michigan Department of Treasury
P.O. Box 15128
Lansing, Michigan 48901
Principal Occupation: Assistant Director, Bureau of Investments
Criminal convictions during the last five years: None
Civil finding or violation, or injunction against violation, of federal or
state securities laws during the last five years:
None
Citizenship: United States of America
<PAGE>
ATTACHMENT B
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
INVESTMENT OFFICERS
Name: Alan H. Van Noord
Business Address: Michigan Department of Treasury
P.O. Box 15128
Lansing, Michigan 48901
Principal Occupation: Administrator, Stock Analysis Division
Criminal convictions during the last five years: None
Civil finding or violation, or injunction against violation, of federal or
state securities laws during the last five years:
None
Citizenship: United States of America
<PAGE>
ATTACHMENT B
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
INVESTMENT OFFICERS
Name: Philip Van Syckle
Business Address: Michigan Department of Treasury
P.O. Box 15128
Lansing, Michigan 48901
Principal Occupation: Administrator, Mortgage and Real Estate Division
Criminal convictions during the last five years: None
Civil finding or violation, or injunction against violation, of federal or
state securities laws during the last five years:
None
Citizenship: United States of America
<PAGE>
ATTACHMENT B
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
INVESTMENT OFFICERS
Name: Paul R. Nelson, II
Business Address: Michigan Department of Treasury
P.O. Box 15128
Lansing, Michigan 48901
Principal Occupation: Administrator, Fixed Income Analysis Division
Criminal convictions during the last five years: None
Civil finding or violation, or injunction against violation, of federal or
state securities laws during the last five years:
None
Citizenship: United States of America
<PAGE>
ATTACHMENT B
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
INVESTMENT OFFICERS
Name: Paul E. Rice
Business Address: Michigan Department of Treasury
P.O. Box 15128
Lansing, Michigan 48901
Principal Occupation: Administrator, Alternative Investments Division
Criminal convictions during the last five years: None
Civil finding or violation, or injunction against violation, of federal or
state securities laws during the last five years:
None
Citizenship: United States of America
<PAGE>
ATTACHMENT B
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
INVESTMENT OFFICERS
Name: Milan J. Maat
Business Address: Michigan Department of Treasury
P.O. Box 15128
Lansing, Michigan 48901
Principal Occupation: Administrator, Short Term Investment Division
Criminal convictions during the last five years: None
Civil finding or violation, or injunction against violation, of federal or
state securities laws during the last five years:
None
Citizenship: United States of America
<PAGE>
ATTACHMENT B
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
INVESTMENT OFFICERS
Name: Vernon L. Johnson
Business Address: Michigan Department of Treasury
P.O. Box 15128
Lansing, Michigan 48901
Principal Occupation: Administrator, Trust Accounting Division
Criminal convictions during the last five years: None
Civil finding or violation, or injunction against violation, of federal or
state securities laws during the last five years:
None
Citizenship: United States of America
<PAGE>
ATTACHMENT B
SCHEDULE 13D
STATE TREASURER, STATE OF MICHIGAN
INVESTMENT OFFICERS
Name: Richard J. Holcomb
Business Address: Michigan Department of Treasury
P.O. Box 15128
Lansing, Michigan 48901
Principal Occupation: Administrator, Quantitative Analysis Division
Criminal convictions during the last five years: None
Civil finding or violation, or injunction against violation, of federal or
state securities laws during the last five years:
None
Citizenship: United States of America
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of his knowledge and
belief, the undersigned certifies that the information set forth in this
Amendment and Restatement of Schedule 13D is true, complete and correct.
/S/ Paul E. Rice
-------------------------------
Paul E. Rice
Administrator of the Alternative
Investments Division
Dated: November 8, 1996
EXHIBIT INDEX
No. Description
1 Stock Purchase and Sale Agreement (3,247,103 shares of Prab, Inc.
Stock) dated October 31, 1996, between Reporting Person and Issuer.
2 Stock Purchase and Sale Agreement (52,897 shares of Prab, Inc.
Stock) dated October 31, 1996, between Reporting Person and the
Plan.
3 Shareholder Agreement, dated October 31, 1996 between John J.
Wallace individually and as Trustee under The John J. Wallace
Revocable Trust and Reporting Person.
STOCK PURCHASE AND SALE AGREEMENT
(3,247,103 SHARES OF PRAB, INC. STOCK)
This STOCK PURCHASE AGREEMENT (the "Agreement") is dated as of
October 31, 1996, by and between the State Treasurer of the State of
Michigan, Custodian of the Public School Employees' Retirement System; State
Employees' Retirement System; Michigan State Police Retirement System; and
Michigan Judges' Retirement System ("SMRS") and Prab, Inc. ("Prab").
SMRS desires to sell to Prab on the Closing Date (as defined
herein), and Prab desires to purchase on such date, 1,013,770 shares of
common stock, 1,633,333 shares of convertible preferred stock and 600,000
shares of non-convertible preferred stock.
Accordingly, SMRS and Prab agree as follows:
SECTION 1. Purchase and Sale of Stock.
1.1 Agreement to Sell and Purchase. (a) On the basis of the
representations and warranties and subject to the terms and conditions set
forth herein, SMRS agrees to sell to Prab, and Prab agrees to purchase from
SMRS: (i) 1,013,770 shares of common stock of Prab at a purchase price of
One Million Three Hundred Sixty Eight Thousand Five Hundred Eighty Nine and
50/100 Dollars ($1,368,589.50), (ii) 1,633,333 shares of convertible
preferred stock of Prab, at a purchase price of Two Million Two Hundred Four
Thousand Nine Hundred Ninety Nine and 55/100 Dollars ($2,204,999.55), plus
accrued and unpaid dividends, and (iii) 600,000 shares of non-convertible
preferred stock of Prab, at a purchase price of Three Hundred Thousand
Dollars ($300,000.00), plus accrued and unpaid dividends. (The amount of
Three Million Eight Hundred Seventy Three Thousand Five Hundred Eighty Nine
and 05/100 Dollars ($3,873,589.05) is referred to as the "Purchase Price."
The 1,013,770 shares of common stock, the 1,633,333 shares of convertible
preferred stock and the 600,000 shares of non-convertible preferred stock
are referred to as the "Shares").
(b) The closing (the "Closing") of the purchase and sale of the
Shares shall be held on October 31, 1996 (the "Closing Date"). Prab agrees
to pay to SMRS on the Closing Date the amount of the Purchase Price, plus
accrued and unpaid dividends, by cashier's check, certified check, or
federal funds wire transfer, against receipt of the Shares by Prab.
(c) SMRS agrees, on the Closing Date, to deliver to Prab, or
have transferred to the Illinois Stock Transfer Company for Prab's credit,
the following three stock certificates: (i) Stock Certificate No. U 12026
for 400,000 shares of common stock of Prab, issued on July 8, 1987; (ii)
Stock Certificate No. U 13969 for 666,667 shares of common stock of Prab,
issued October 30, 1992; and (iii) Stock Certificate No. 1 for 600,000
shares of non-convertible preferred stock of Prab issued October 30, 1992.
(d) SMRS agrees, on the Closing Date, to deliver to Prab Stock
Certificate No. 1 for 2,000,000 shares of convertible preferred stock of
Prab, issued on October 30, 1992, in exchange for a stock certificate in the
amount of 366,667 shares of convertible preferred stock of Prab (the
"Outstanding Convertible Preferred Stock").
1.2 Issuance of Stock to the Plan. Prab agrees, on the Closing
Date, to deliver to Prab, Inc. Salaried Employees Profit Sharing Plan (the
"Plan") a stock certificate in the amount of 52,897 shares of common stock
of Prab (the "Plan Shares") against the receipt by SMRS of the purchase
price therefor from the Plan as provided in the Purchase and Sale Agreement
between SMRS and the Plan dated as of October 31, 1996.
1.3 Expenses. SMRS and Prab shall each be responsible for their
own expenses in connection with this Agreement, except that Prab shall
reimburse SMRS in an amount of $135,000 on the Closing Date to reimburse
SMRS for a portion of the legal fees, investment banking fees, and other
expenses that SMRS has incurred with respect to the transactions
contemplated by this Agreement.
SECTION 2. Registration Rights and Shareholders Agreement.
2.1. Acknowledgment. Prab and SMRS acknowledge that the
Registration Rights and Shareholders Agreement between Prab and SMRS, dated
as of October 30, 1992 (the "Registration Rights and Shareholders
Agreement"), remains in full force and effect and the holder of the
Outstanding Convertible Preferred Stock is entitled to all of the benefits
of the Registration Rights and Shareholders Agreement with respect to the
Outstanding Convertible Preferred Stock. Likewise, such holder must comply
with all of the requirements of the Registration Rights and Shareholders
Agreement with respect to the Outstanding Convertible Preferred Stock.
2.2. Waiver of Restrictions on Plan Shares. Prab and SMRS agree
to waive the restrictions on transfer of the Plan Shares imposed by the
Registration Rights and Shareholders Agreement, including without
limitation, notice of proposed transfer, opinion of counsel, and right of
first refusal, for the purpose of the sale from SMRS to the Plan of the Plan
Shares.
2.3 Effect on Plan Shares. Prab, the Plan, and SMRS agree that
from the date hereof, Prab, SMRS, the Plan and the holder of the Plan Shares
shall have no rights, duties, or obligations arising under or based upon the
Registration Rights and Shareholders Agreement with respect to the Plan
Shares and with respect to the Plan Shares the Registration Rights and
Shareholders Agreement shall have no force or effect.
SECTION 3. Purchase of Stock by Prab's Employee Stock Ownership
Plan.
Section 3.1. Purchase of Stock. Prab will cause the Plan, and the
Plan hereby agrees, for the three years following the date of this
Agreement, to purchase from SMRS any stock of Prab that the Plan intends to
purchase, provided that such purchase does not create a reasonable risk that
an "ownership change" may occur within the meaning of Section 382 of the
Internal Revenue Code of1986, as amended. Such determination shall be made
by Prab in its sole reasonable discretion, after consultation with its legal
counsel and its accountants. In the event that the Plan may not purchase
stock of Prab from SMRS as a result of the limitation described herein, the
Plan may purchase stock of Prab without regard to the restriction set forth
in Section 3.1 of this Agreement.
Section 3.2. Method of Purchase and Purchase Price. The purchase
of such shares by the Plan shall be accomplished by the Plan or Prab
providing SMRS with thirty (30) days prior written notice of the number of
shares that it desires to purchase. SMRS shall then convert that number of
shares of Outstanding Convertible Preferred Stock to common stock and then
sell such stock to the Plan. The purchase price for such shares shall be the
"Current Market Price" as that term is defined in the Registration Rights
and Shareholders Agreement, on the date that is fifteen (15) days after the
date of the notice to SMRS of the intent to purchase such stock. SMRS shall
not, however, be obligated to sell any such stock to the Plan if the
"Current Market Price" as of such date of determination is less than $1.35
per share.
SECTION 4. Board Attendance and Financial Statements.
Section 4.1. Board Attendance. SMRS, so long as SMRS is the holder
of a portion of the Outstanding Convertible Preferred Stock, shall have the
right to designate a representative to attend any meeting, whether regular
or special, including telephone meetings, of the Board of Directors of Prab.
Prab shall provide notice to SMRS of each such meeting in the same manner
and at the same time the directors are given such notice. Prab shall also
provide SMRS with copies of all financial information, including monthly
income and financial statements, that Prab provides to its directors, at the
same time and in the same manner that such information is provided to its
directors. SMRS' representative shall have the right to participate in such
meetings, but not to vote thereat, and to receive all minutes of such
meetings and all other materials as the directors receive from Prab. SMRS
acknowledges that such attendance may place special obligations upon it
under Federal securities laws.
SECTION 5. Limitation on Purchase or Sale of Prab Stock by SMRS.
5.1. Limitations. (a) For a period of three years from the date
of this Agreement (the "Restrictive Period"), SMRS shall not purchase or
otherwise acquire, nor pledge, sell, or otherwise dispose of, any shares of
any class of stock of Prab without the prior written consent of Prab, except
as provided in Sections 3.1 through 3.2 hereof, provided, however, that SMRS
may purchase or otherwise acquire, pledge, sell or otherwise dispose of,
shares of any class of stock of Prab upon t he prior written consent of
Prab. Prab shall grant such consent if, in its sole reasonable discretion
after consultation with its legal counsel and its accountants, such
purchase, sale or other disposition will not create a reasonable risk that
an "ownership change" may occur within the meaning of Section 382 of the
Internal Revenue Code of 1986.
(b) During the Restrictive Period, and except as provided in
Sections 3.1 through 3.2 hereof, SMRS shall not enter into an agreement for
the purchase or other acquisition or for the sale,pledge or other
disposition, of any shares of any class of stock of Prab, including any
option, put, right of first refusal or similar agreement (and the provisions
of this paragraph (b) shall apply notwithstanding that under the terms of
such agreement, any transfer of shares would not be consummated until
following the end of such Restrictive Period).
5.2 Construction. The provisions of Section 5.1 shall be
construed in such a manner as to satisfy the objective of Prab and SMRS of
avoiding an "ownership change" under Section 382 of the Internal Revenue
Code of 1986, as amended.
SECTION 6. Acknowledgments, Representations and Agreements of
Prab.
Prab hereby represents and warrants to and agrees with SMRS that:
6.1. Validity of Agreement. This Agreement has been duly
authorized, executed and delivered by Prab and is enforceable against Prab
in accordance with its terms.
6.2 No Violations, Etc. The execution, delivery and performance
of the terms of this Agreement by Prab, and the purchase of the Shares by
Prab, (i) requires no action by or in respect of, or filing with, any
governmental body, or agency or official of the United States or any
political subdivision thereof, except for reports required to be filed with
the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended, and (ii) will not violate any statute or any order, rule
or regulation of any court or government agency or body in the United States
or any political subdivision thereof having jurisdiction over Prab, which
violation could have a material adverse effect on the ability of Prab to
perform its obligations under this Agreement.
SECTION 7. Representations and Warranties of SMRS.
SMRS hereby represents and warrants to and agrees with Prab that:
7.1 Validity of Agreement. This Agreement has been duly
authorized, executed and delivered by SMRS and is enforceable against SMRS
in accordance with its terms.
7.2 No Violations, Etc. The execution, delivery and performance
of the terms of this Agreement by SMRS, and the sale of the Shares by SMRS,
(i) requires no action by or in respect of, or filing with, any governmental
body, or agency or official of the United States or any political
subdivision thereof, except for reports required to be filed with the
Securities and Exchange commission under the Securities Exchange Act of
1934, as amended, and (ii) will not violate any statute or any order, rule
or regulation of any court or government agency or body in the United States
or any political subdivision thereof having jurisdiction over SMRS, which
violation could have a material adverse effect on the ability of SMRS to
perform its obligation under this Agreement.
7.3 Delivery of Shares. Delivery by SMRS of the Shares to Prab
will transfer to Prab valid title thereto, free and clear of all liens,
encumbrances, restrictions and claims of any kind.
SECTION 8. General Provisions.
8.1 Benefits; Successors and Assigns. Except as set forth
herein, or as otherwise specifically agreed to in writing by the party to be
charged, this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their successors and assigns.
8.2 Amendment and Waiver. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto. The waiver of the observance of any term hereof may only be waived
by an instrument in writing. Such waiver by any party hereto of a breach of
this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
8.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan.
8.4 Entire Agreement. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof.
8.5 Headings. The headings in this Agreement are for
convenience only and shall not affect the construction hereof.
8.6 Severability. In the event that any provision of this
Agreement shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions hereof shall not in any way
be affected or impaired thereby.
8.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
when taken together shall constitute but one contract.
STATE TREASURER OF THE STATE OF MICHIGAN, CUSTODIAN OF THE PUBLIC
SCHOOL EMPLOYEES' RETIREMENT SYSTEM; STATE EMPLOYEES' RETIREMENT
SYSTEM; MICHIGAN STATE POLICE RETIREMENT SYSTEM; AND MICHIGAN
JUDGES' RETIREMENT SYSTEM
By:
-----------------------------
Paul E. Rice, Administrator
Alternative Investments
Division
PRAB, INC.
By:
-----------------------------
Gary A. Herder
Its: President
ACKNOWLEDGED AND AGREED TO WITH
RESPECT TO SECTIONS 1.2, 2.2, 2.3,
3.1 AND 3.2.
PRAB, INC. SALARIED EMPLOYEES
PROFIT SHARING PLAN
By:
------------------------------
Gary A. Herder
Its: Trustee
STOCK PURCHASE AND SALE AGREEMENT
(52,897 SHARES OF
PRAB, INC. STOCK)
This STOCK PURCHASE AGREEMENT (the "Agreement") is dated as of
October 31, 1996, by and between the State Treasurer of the State of
Michigan, Custodian of the Public School Employees' Retirement System; State
Employees' Retirement System; Michigan State Police Retirement System; and
Michigan Judges' Retirement System ("SMRS") and the Prab, Inc. Salaried
Employees Profit Sharing Plan (the "Plan").
SMRS desires to sell to the Plan on the Closing Date (as defined
herein), and the Plan desires to purchase on such date, 52,897 shares of
common stock of Prab, Inc. ("Prab").
Accordingly, SMRS and the Plan agree as follows:
SECTION 1. Purchase and Sale of Stock.
1.1 Agreement to Sell and Purchase. (a) On the basis of the
representations and warranties and subject to the terms and conditions set
forth herein, SMRS agrees to sell to the Plan, and the Plan agrees to
purchase from SMRS, 52,897 shares of common stock of Prab at a purchase
price of Seventy One Thousand Four Hundred Ten and 95/100 Dollars
($71,410.95). The amount of Seventy One Thousand Four Hundred Ten and
95/100 Dollars ($71,410.95) is referred to as the "Purchase Price." The
52,897 shares of common stock are referred to as the "Plan Shares".
(b) The closing (the "Closing") of the purchase and sale of the
Plan Shares shall be held on October 31, 1996 (the "Closing Date"). The
Plan agrees to pay to SMRS on the Closing Date the amount of the Purchase
Price, by cashier's or certified check, or federal funds wire transfer,
against receipt of the Plan Shares by the Plan.
(c) SMRS agrees to request Prab to deliver, on the Closing Date,
to the Plan a stock certificate in the amount of 52,897 shares of common
stock of Prab, against the receipt of the Purchase Price by SMRS from the
Plan.
1.2 Expenses. SMRS and the Plan shall each be responsible for
their own expenses in connection with this Agreement.
SECTION 2. Registration Rights and Shareholders Agreement.
2.1. Effect on Plan Shares. Prab, the Plan, and SMRS agree that
from the date hereof, Prab, SMRS, the Plan and the holder of the Plan Shares
shall have no rights, duties, or obligations arising under or based upon the
Registration Rights and Shareholders Agreement between Prab and SMRS, dated
as of October 30, 1992 (the "Registration Rights and Shareholders
Agreement"), with respect to the Plan Shares and with respect to the Plan
Shares the Registration Rights and Shareholders Agreement shall have no
force or effect.
SECTION 3. Acknowledgments, Representations and Agreements of the Plan.
The Plan hereby represents and warrants to and agrees with SMRS
that:
3.1. Validity of Agreement. This Agreement has been duly
authorized, executed and delivered by the Plan and is enforceable against
the Plan in accordance with its terms.
3.2 No Violations, Etc. The execution, delivery and performance
of the terms of this Agreement by the Plan, and the purchase of the Plan
Shares by the Plan, (i) requires no action by or in respect of, or filing
with, any governmental body, or agency or official of the United States or
any political subdivision thereof, except for reports required to be filed
with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, and (ii) will not violate any statute or any order,
rule or regulation of any court or government agency or body in the United
States or any political subdivision thereof having jurisdiction over the
Plan, which violation could have a material adverse effect on the ability of
the Plan to perform its obligations under this Agreement.
SECTION 4. Representations and Warranties of SMRS.
SMRS hereby represents and warrants to and agrees with the Plan
that:
4.1 Validity of Agreement. This Agreement has been duly
authorized, executed and delivered by SMRS and is enforceable against SMRS
in accordance with its terms.
4.2 No Violations, Etc. The execution, delivery and performance
of the terms of this Agreement by SMRS, and the sale of the Plan Shares by
SMRS, (i) requires no action by or in respect of, or filing with, any
governmental body, or agency or official of the United States or any
political subdivision thereof, except for reports required to be filed with
the Securities and Exchange commission under the Securities Exchange Act of
1934, as amended, and (ii) will not violate any statute or any order, rule
or regulation of any court or government agency or body in the United States
or any political subdivision thereof having jurisdiction over SMRS, which
violation could have a material adverse effect on the ability of SMRS to
perform its obligation under this Agreement.
4.3 Delivery of Shares. Delivery by SMRS of the Plan Shares to
Prab, for further delivery to the Plan, will transfer valid title thereto,
free and clear of all liens, encumbrances, restrictions and claims of any
kind, except for the claims by the Plan of ownership of such stock.
SECTION 5. General Provisions.
5.1 Benefits; Successors and Assigns. Except as set forth
herein, or as otherwise specifically agreed to in writing by the party to be
charged, this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their successors and assigns.
5.2 Amendment and Waiver. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto. The waiver of the observance of any termhereof may only be waived
by an instrument in writing. Such waiver by any party hereto of a breach of
this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
5.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan.
5.4 Entire Agreement. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof.
5.5 Headings. The headings in this Agreement are for
convenience only and shall not affect the construction hereof.
5.6 Severability. In the event that any provision of this
Agreement shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions hereof shall not in any way
be affected or impaired thereby.
5.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
when taken together shall constitute but one contract.
STATE TREASURER OF THE STATE OF MICHIGAN, CUSTODIAN OF THE PUBLIC
SCHOOL EMPLOYEES' RETIREMENT SYSTEM; STATE EMPLOYEES' RETIREMENT
SYSTEM; MICHIGAN STATE POLICE RETIREMENT SYSTEM; AND MICHIGAN
JUDGES' RETIREMENT SYSTEM
By:
---------------------------
Paul E. Rice, Administrator
Alternative Investments
Division
PRAB, INC. SALARIED EMPLOYEES
PROFIT SHARING PLAN
By:
----------------------------
Gary A. Herder
Its: Trustee
SHAREHOLDERS AGREEMENT
This Agreement by and among JOHN J. WALLACE ("Wallace"), JOHN J.
WALLACE, AS TRUSTEE UNDER THE JOHN J. WALLACE REVOCABLE TRUST AGREEMENT,
DATED FEBRUARY 9, 1987 (the "Wallace Trust"), PRAB, INC., a Michigan
corporation (the "Company") and the STATE TREASURER OF THE STATE OF
MICHIGAN, CUSTODIAN OF PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM; STATE
EMPLOYEES' RETIREMENT SYSTEM; MICHIGAN STATE POLICE RETIREMENT SYSTEM; AND
MICHIGAN JUDGES' RETIREMENT SYSTEM (the "SMRS") is made this 31st day of
October, 1996 (the "Agreement").
A. Wallace is the Chairman of the Board of the Company and
Wallace and the Wallace Trust constitute a 5% shareholder within the meaning
of Section 382 of the Internal Revenue Code of 1986, as amended (the
"Code").
B. SMRS is willing to sell to the Company certain Prab, Inc.
stock that SMRS owns, pursuant to that certain Stock Purchase and Sale
Agreement between the Company and SMRS dated as of the date hereof between
the Company and SMRS (the "Stock Purchase and Sale Agreement").
C. As an inducement to SMRS and the Company to enter into the
Stock Purchase and Sale Agreement, Wallace and the Wallace Trust are willing
to agree to certain restrictions on the acquisition or disposition of shares
of stock of the Company in order to prevent a "change of ownership" within
the meaning of Section 382 of the Code.
Now, therefore, the parties agree as follows:
1. Restrictions on Acquisitions and Dispositions.
(a) For a period of three years from the date of this Agreement
(the "Restrictive Period"), Wallace and the Wallace Trust shall not purchase
or otherwise acquire, nor pledge, sell, or otherwise dispose of, any shares
of any class of stock of the Company, provided, however, that Wallace and
the Wallace Trust may purchase or otherwise acquire, pledge, sell or
otherwise dispose of, shares of any class of stock of the Company upon the
prior written consent of the Company. The Company shall grant such consent
if, in its sole reasonable discretion after consultation with its legal
counsel and its accountants, such purchase, sale or other disposition will
not create a reasonable risk that an "ownership change" may occur within the
meaning of Section 382 of the Code.
(b) During the Restrictive Period, Wallace and the Wallace Trust
shall not enter into an agreement for the purchase or other acquisition or
for the sale, pledge or other disposition, of any shares of any class of
stock of the Company, including any option, put, right of first refusal or
similar agreement (and the provisions of this paragraph (b) shall apply
notwithstanding that under the terms of such agreement, any transfer of
shares would not be consummated until following the end of such Restrictive
Period).
2. Certificates.
Wallace and the Wallace Trust shall return all certificates
representing stock of the Company owned by them to the Company and the
Company shall stamp or imprint on such certificates a legend in the
following form:
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE
PROVISIONS OF A SHAREHOLDERS AGREEMENT DATED OCTOBER 31,
1996 AMONG THE COMPANY, JOHN J. WALLACE, AND THE JOHN J.
WALLACE TRUST, AS AMENDED FROM TIME TO TIME, WITH RESPECT TO
TRANSFERS, AND TRANSFERS HEREOF MAY BE MADE ONLY IN
ACCORDANCE WITH THE PROVISIONS OF SAID AGREEMENT. A COPY OF
SAID AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL
OFFICE OF THE COMPANY.
During the term of this Agreement, any other certificates representing stock
of the Company owned by Wallace or the Wallace Trust issued by the Company
shall bear the foregoing legend.
3. Construction.
The provisions of this Agreement shall be construed in such manner
as to satisfy the objective of avoiding a "change of ownership" under
Section 382 of the Code. This Agreement shall be construed under and
governed by Michigan law and shall be binding upon the heirs, personal
representatives, successors and assigns of the parties.
IN WITNESS WHEREOF, the parties have executed this Shareholders
Agreement as of the date first set forth above.
JOHN J. WALLACE
-------------------------------
John J. Wallace, individually
JOHN J. WALLACE REVOCABLE TRUST
AGREEMENT
By:
---------------------------
John J. Wallace, Trustee
PRAB, INC.
By:
-----------------------------
Gary A. Herder
Its: President
STATE TREASURER OF THE STATE OF MICHIGAN CUSTODIAN OF PUBLIC SCHOOL
EMPLOYEES' RETIREMENT SYSTEM; STATE EMPLOYEES' RETIREMENT SYSTEM;
MICHIGAN STATE POLICE RETIREMENT SYSTEM; AND MICHIGAN JUDGES'
RETIREMENT SYSTEM
By:
------------------------------
Paul E. Rice, Administrator
Alternative Investments
Division
