Exhibit 1
SECOND AMENDED AND RESTATED
SECURITIES PURCHASE AND HOLDERS AGREEMENT
SECOND AMENDED AND RESTATED SECURITIES PURCHASE AND HOLDERS AGREEMENT,
dated March 1, 1998 (the "Agreement"), by and among DELCO REMY INTERNATIONAL,
INC., a Delaware corporation (formerly known as "DR International, Inc.") (the
"Company"); CITICORP VENTURE CAPITAL LTD., a New York corporation ("CVC");
WORLD EQUITY PARTNERS, L.P., a Delaware limited partnership ("WEP"); MASG
Disposition, Inc. (formerly known as MASCOTECH AUTOMOTIVE SYSTEMS GROUP, INC.),
a Michigan corporation ("Masco"); and the persons named on the signature pages
hereto (the "Other Investors"). The individuals listed on Schedule I hereto are
sometimes referred to hereinafter as the Original Management Investors (the
"Original Management Investors"); and the individuals listed on Schedule II
hereto are sometimes referred to hereinafter as the New Management Investors
(the "New Management Investors"). CVC, WEP and Masco are sometimes referred to
hereinafter individually as an "Institutional Investor" and together as the
"Institutional Investors"; the Original Management Investors and New Management
Investors are sometimes referred to hereinafter collectively as the "Management
Investors"; and CVC, WEP, Masco, the Other Investors and the Management
Investors are sometimes referred to hereinafter individually as an "Investor"
and collectively as the "Investors."
A. The Company and each of the Investors is a party to the Securities
Purchase and Holders Agreement dated July 29, 1994 (the "Original Agreement"),
which provided, among other things, for the purchase by the Investors of (i)
Class A Common Stock, par value $.01 per share ("Class A Common Stock") of the
Company, (ii) Class B Common Stock, par value $.01 per share ("Class B Common
Stock") of the Company, and/or (iii) a warrant exercisable for 100,000 shares
of Class A Common Stock ("Warrant"). The Class A Common Stock and Class B
Common Stock are hereinafter referred to together as the "Common Stock" or
"Shares." The Original Agreement was amended by the Amended and Restated
Securities Purchase Agreement dated December 22, 1997 (the "First Amendment").
This Agreement amends the Original Agreement as amended and restated in the
First Amendment.
B. The Management Investors are employed by the Company and/or its
subsidiaries. Each of the Management Investors has purchased shares of Class A
Common Stock.
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C. As used herein, the term "Securities" shall mean the Warrant (including
shares of Common Stock to be issued upon exercise thereof) and the Common Stock
held by any party hereto, including shares of Common Stock and all other
securities of the Company (or a successor to the Company) received on account
of ownership of the Common Stock, including all securities issued in connection
with any merger, consolidation, stock dividend, stock distribution, stock
split, reverse stock split, stock combination, recapitalization,
reclassification, subdivision, conversion or similar transaction in respect
thereof.
D. The Investors and the Company wish to set forth certain agreements
regarding their future relationships and their rights and obligations with
respect to the Securities.
Terms
In consideration of the mutual covenants contained herein and intending to
be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. Certain Definitions. As used in this Agreement, the following terms
shall have the following meanings:
(a) "Affiliate" means with respect to any person, a corporation in which
such person owns, directly or indirectly through one or more
intermediaries, fifty percent (50%) or more of the outstanding
capital stock of such corporation.
(b) "Permitted Transferee" means:
(i) in the case of any Investor or Permitted Transferee who is a
natural person, his spouse or children or grandchildren (in each
case, natural or adopted), any trust for his benefit or the
benefit of his spouse or children or grandchildren (in each
case, natural or adopted), or any corporation or partnership in
which the direct and beneficial owner of all of the equity
interest is such individual Investor or Permitted Transferee or
his spouse or children or grandchildren (in each case, natural
or adopted) (or any trust for the benefit of such persons);
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(ii) in the case of any Investor or Permitted Transferee who is, in
each case, a natural person, the heirs, executors,
administrators or personal representatives upon the death of
such Investor or Permitted Transferee or upon the incompetency
or disability of such Investor or Permitted Transferee for
purposes of the protection and management of his assets;
(iii) in the case of an Investor or Permitted Transferee who is not a
natural person, any Affiliate of such Investor;
(iv) in the case of any Investor or Permitted Transferee, any person
or other entity if such person or other entity takes such
Securities pursuant to a sale in connection with a public
offering under the Securities Act or following a public offering
in open market transactions or under Rule 144 under the
Securities Act;
(v) in the case of CVC, any of its employees, officers or directors;
(vi) in the case of Masco and its Permitted Transferees, MascoTech
Corporation, a Delaware corporation ("MC"), and any corporation
in which MC owns, directly or indirectly through one or more
intermediaries, one hundred percent (100%) of the outstanding
capital stock of such corporation; and
(vii) in the case of WEP, a distribution of Securities to its limited
partners.
ARTICLE II
[Intentionally Omitted]
ARTICLE III
[Intentionally Omitted]
ARTICLE IV
COVENANTS AND REPRESENTATIONS
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4.1. Legend. To the extent required under applicable law, the Warrant and
certificates representing the Shares shall bear the following legends in
addition to any other legends required under applicable law:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE TRANSFERRED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OR STATE SECURITIES LAWS OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
THE TERMS AND CONDITIONS OF A SECURITIES PURCHASE AND HOLDERS
AGREEMENT BY AND AMONG THE COMPANY AND THE HOLDERS SPECIFIED THEREIN,
A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY. THE SALE, TRANSFER OR OTHER DISPOSITION OF THE SECURITIES IS
SUBJECT TO THE TERMS OF SUCH AGREEMENT AND THE SECURITIES ARE
TRANSFERABLE ONLY UPON PROOF OF COMPLIANCE THEREWITH.
4.2. Regulatory Compliance Cooperation. So long as CVC or its Affiliates
beneficially own any of the Securities, before the Company redeems, purchases
or otherwise acquires, directly or indirectly, or converts or takes any action
with respect to the voting rights of, any shares of any class of its capital
stock or any securities convertible into or exchangeable for any shares of any
class of its capital stock, the Company shall give CVC thirty (30) days prior
written notice of such pending action. Upon the written request of CVC made
within thirty (30) days after its receipt of any such notice, stating that
after giving effect to such action CVC would have a Regulatory Problem (as
described below), the Company will defer taking such action for such period
(not to extend beyond ninety (90) days after CVC's receipt of the Company's
original notice) as CVC requests to permit it and its Affiliates to reduce the
quantity of Securities held by it and its Affiliates in order to avoid the
Regulatory Problem. In addition, the Company will not be a party to any merger,
consolidation, recapitalization or other transaction pursuant to which CVC
would be required to take any voting securities, or any securities convertible
into voting securities, which might reasonably be expected to cause CVC to have
a Regulatory Problem. For purposes of this paragraph, a person will be deemed
to have a "Regulatory Problem" when such person and such person's Affiliates
would own, control or have power over a
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greater quantity of securities of any kind issued by the Company than are
permitted to be owned under any requirement of any governmental authority
applicable to such person.
4.3. Notation. A notation will be made in the appropriate transfer records
of the Company with respect to the restrictions on transfer of the Securities
referred to in this Agreement.
ARTICLE V
CORPORATE ACTIONS
5.1. Certificate of Incorporation and Bylaws. Each Investor has reviewed
the Amended and Restated Certificate of Incorporation and Amended and Restated
Bylaws of the Company in the forms attached hereto as Exhibits A-1 and A-2,
respectively, and hereby approves and ratifies the same.
5.2. Directors and Voting Agreements. Each Investor and Permitted
Transferee agrees that it shall take, at any time and from time to time, all
action necessary (including voting the Class A Common Stock owned by him, her,
or it, calling special meetings of stockholders and executing and delivering
written consents) to ensure that the Board of Directors of the Company is
composed at all times of seven persons as follows: Harold K. Sperlich (so long
as he continues to serve as Chairman of the Board of Directors of the Company);
one individual nominated by Masco who shall initially be E. H. Billig; two
individuals nominated by CVC; James R. Gerrity (so long as he continues to
serve as an officer of or a consultant to the Company); Thomas J. Snyder (so
long as he continues to serve as President of the Company); and one independent
nominated by the Board of Directors; provided, however, that in the event Masco
owns less than seven percent (7%) of the Common Stock as a result of a sale or
sales of such Common Stock by Masco, then Masco shall no longer have the right
to nominate a director pursuant to the provisions of this Agreement; and
provided, further, however, that in, the event CVC owns less than seven percent
(7%) of the Common Stock as a result of a sale or sales of such Common Stock by
CVC, then CVC shall no longer have the right to nominate a director or
directors pursuant to the provisions of this Agreement.
5.3. Right to Remove Certain of the Company's Directors. Each of CVC and
Masco, as the case may be, may request that any director nominated by it be
removed (with or without cause) by written notice to the other Investors, and,
in any such event, each Investor shall promptly consent in writing or vote or
cause to be voted all shares of Class A Common Stock now or hereafter owned or
controlled by it for the removal of such person as a director. In the event any
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person ceases to be a director, such person shall also cease to be a member of
any committee of the Board of Directors of the Company.
5.4. Right to Fill Certain Vacancies in Company's Board. In the event that
a vacancy is created on the Company's Board of Directors at any time by the
death, disability, retirement, resignation or removal (with or without cause)
of a director nominated by CVC or Masco, as the case may be, or if otherwise
there shall exist or occur any vacancy on the Company's Board of Directors in a
directorship subject to nomination by CVC or Masco, as the case may be, such
vacancy shall not be filled by the remaining members of the Company's Board of
Directors but each Investor hereby agrees promptly to consent in writing or
vote or cause to be voted all shares of Class A Common Stock now or hereafter
owned or controlled by it to elect that individual nominated to fill such
vacancy and serve as a director, as shall be designated by CVC or Masco, as the
case may be.
5.5. Termination of Voting Agreements. The voting agreements in Section
5.2, 5.3, 5.4 and 5.5 shall terminate on July 28, 2004 unless extended in the
manner provided in Section 218 of the General Corporation Law of the State of
Delaware.
ARTICLE VI
RESTRICTIONS ON TRANSFERS OF
SECURITIES HELD BY MANAGEMENT INVESTORS
6.1. Certain Definitions. The terms defined below shall have the following
meanings when used in this Article VI:
(a) "Company" means the Company and all other entities in which the
Company from time to time owns, directly or indirectly, fifty percent (50%) or
more of the stock or assets.
(b) "Cause", when used in connection with the termination of a Management
Investor's employment with the Company, means the Management Investor's (i) act
or acts of dishonesty, moral turpitude or criminality, (ii) failure to perform
his duties as an employee as reasonably determined by the Board of Directors of
the Company acting in good faith after reasonable notice to such employee by
the Board of Directors of the Company and, if so recommended by the Board of
Directors, after such employee has not cured such failure after 30 days
opportunity to do so, or (iii) willful or deliberate violations of his
obligations to the Company (whether such obligations are designated by the
Board of Directors or are set forth in an employment agreement) that result in
injury to the Company.
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(c) "Permanent Disability" means as used herein, "Total Disability" or
"Totally Disabled" shall mean any physical or mental ailment or incapacity as
determined by a licensed physician agreed to by the Company and the Management
Investor (or, in the event that the Management Investor and the Company cannot
so agree, by a licensed physician agreed upon by a physician selected by the
Management Investor and a physician selected by the Company), which prevents
the Management Investor from performing the duties incident to the Management
Investor's employment hereunder which has continued for a period of either (i)
ninety (90) consecutive days in any 12-month period or (ii) one hundred eighty
(180) total days in any 12-month period, and which can reasonably be expected
to be of permanent duration.
(d) "Public Offering" means a successfully completed firm commitment
underwritten public offering pursuant to an effective registration statement
under the Securities Act in respect of the offer and sale of shares of Common
Stock for the account of the Company resulting in aggregate net proceeds to the
Company and any stockholder selling shares of Common Stock in such offering of
not less than $20,000,000.
(e) "Securities" means any and all of the Shares and all other securities
of the Company (or a successor to the Company) received on account of ownership
of the Shares, including any and all securities issued in connection with any
merger, consolidation, stock dividend, stock distribution, stock split, reverse
stock split, stock combination, recapitalization, reclassification,
subdivision, conversion or similar transaction in respect thereof which are
subject to the Purchase Option at the date of determination.
6.2. Restrictions on Transfer. Notwithstanding anything to the contrary
contained herein, no Original Management Investor shall effect a Transfer prior
to July 29, 1999 of any Securities which at the time of Transfer are subject to
the Purchase Option (as hereinafter defined) and no New Management Investor
shall effect a Transfer prior to the third anniversary of the "Closing Date"
specified for each such New Management Investor (the "Third Anniversary")
opposite such person's name on Schedule II hereto, of any Securities which at
the time of Transfer are subject to the Purchase Option, other than (i)
pursuant to Section 6.3 in connection with the Purchase Option, (ii) with the
consent of the Company (as evidenced by a resolution duly adopted by at least a
majority of the non-employee members of the Company's Board of Directors),
(iii) to a Permitted Transferee of the Management Investor in question or (iv)
in connection with a Public Offering in which such Management Investor is
permitted to participate. In exercising the consent and approval provided for
in clause (ii), the Company may employ its sole discretion in evaluating the
nature of the proposed transferee and the Company may impose such conditions on
Transfer as it deems appropriate in its sole
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discretion, including, but not limited to, requirements that the transferee be
an employee of the Company and that the transferee purchase the Management
Investor's Securities as a "Management Investor" subject to the restrictions of
this Article VI. In the event any Transfer is authorized pursuant to clause
(ii) to an employee of the Company as a "Management Investor," such employee
shall execute an agreement, in form and substance satisfactory to the Company,
pursuant to which such employee shall agree to be bound by the terms and
conditions of this Agreement as were binding upon the transferor of such
Shares, and such other provisions as the Company may determine, and upon such
execution such employee shall be entitled to the benefit of such provisions
hereof and such other provisions as the Company determines and are set forth in
such agreement. Any purported Transfer in violation of this Agreement shall be
null and void and of no force and effect and the purported transferees shall
have no rights or privileges in or with respect to the Company. Notwithstanding
the foregoing provisions, each Management Investor agrees that he will not
effect a Transfer of any Securities prior to the lapse of such period of time
following acquisition thereof as may be required to comply with applicable
state securities laws.
For the purposes of Article VI, the "Permitted Transferees" of a
Management Investor shall be (1) the executors, administrators, heirs and
distributees of the Management Investor or her or his transferees to whom the
Common Stock is Transferred by will or the laws of descent and distribution on
account of death, (2) the Management Investor's spouse or children or
grandchildren (in each case, natural or adopted) and (3) a trust the
beneficiaries of which, a corporation the stockholders and directors of which,
or a partnership the limited and general partners of which include only the
Management Investor, her or his spouse or her or his children or grandchildren
(in each case, natural or adopted); provided, that, as a condition to a
Transfer to any Permitted Transferee such Permitted Transferee shall agree, in
writing and in form and substance reasonably satisfactory to the Company, to
become bound, and thereby shall become bound, by all the terms of this
Agreement applicable to the Management Investor transferring such Securities.
The Termination Date (as hereinafter defined) for a Permitted Transferee shall
be the Termination Date with respect to the Management Investor who first
acquired the Common Stock held by such Permitted Transferee pursuant to this
Agreement.
6.3. Purchase Option.
(a) General Terms. In the event that on or prior to July 29, 1999 as to
the Original Management Investors, or the Third Anniversary as to the New
Management Investors, any Management Investor shall cease to be employed by the
Company due to retirement, resignation or termination by the Company, with
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or without Cause, such Management Investor (or his transferees, successors or
assigns) shall give prompt notice to the Company of such termination (except in
the case of termination by the Company with or without Cause), and the Company,
or one or more designee(s) selected by a majority of the members of the Board
of Directors, shall have the right and option at any time within 90 days after
the later of the effective date of such termination of employment (the
"Termination Date") or the date of the Company's receipt of the aforesaid
notice, to purchase from such Management Investor, or his transferees,
successors or assigns, as the case may be, any or all of the Securities then
owned by such Management Investor (and his Permitted Transferees) which the
Company then has the right to purchase at the Adjusted Cost Price set forth in
Section 6.3(a)(ii) at a purchase price equal to the Option Purchase Price (as
hereinafter defined). The Company or its designee(s) shall give notice to the
terminated Management Investor (or his transferees, successors or assigns) of
its intention to purchase Securities at any time not later than 90 days after
the Termination Date. (The right of the Company and its designee(s) set forth
in this Section 6.3 to purchase a terminated Management Investor's Securities
is hereinafter referred to as the "Purchase Option"). Notwithstanding anything
to the contrary contained herein, upon the death or Permanent Disability of a
Management Investor, the Purchase Option shall terminate immediately and
automatically as to the Securities held by such Management Investor and his
Permitted Transferees which, at the time of such Management Investor's death or
Permanent Disability were subject to the Purchase Option.
(i) Exercise of Purchase Option. The Purchase Option shall be exercised by
written notice to the terminated Management Investor (or his transferees,
successors or assigns) signed by an officer of the Company on behalf of the
Company or by its designee(s), as the case may be. Such notice shall set forth
the number of shares of Common Stock desired to be purchased and shall set
forth a time and place of closing which shall be no earlier than 10 days and no
later than, 60 days after the date such notice is sent. At such closing, the
seller shall deliver the certificates evidencing the number of shares of Common
Stock to be purchased by the Company and/or its designee(s), accompanied by
stock powers duly endorsed in blank or duly executed instruments of transfer,
and any other documents that are necessary to transfer to the Company and/or
its designee(s) good title to such of the Securities to be transferred, free
and clear of all pledges, security interests, liens, charges, encumbrances,
equities, claims and options of whatever nature other than those imposed under
this Agreement, and concurrently with such delivery, the Company and/or its
designee(s) shall deliver to the seller the full amount of the Option Purchase
Price for such Securities in cash by certified or bank cashier's check.
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(ii) Option Purchase Price. Subject to Section 6.3(a)(iii) below, if the
Management Investor shall be terminated by the Company with or without Cause or
shall cease to be employed by the Company by reason of retirement or
resignation, the "Option Purchase Price" for the Common Stock to be purchased
from such Management Investor pursuant to the Purchase Option (such number of
shares of Common Stock being the "Purchase Number") shall equal the price
calculated as set forth in the table below opposite the applicable Termination
bate of such Management Investor:
Original Management Investors
If the Termination Occurs: Option Purchase Price
------------------------- ---------------------
On or prior to July 29, 1995 Adjusted Cost Price multiplied by the
Purchase Number
After July 29, 1995 and on or Adjusted Cost Price multiplied by 80% of
prior to July 29, 1996 the Purchase Number
After July 29, 1996 and on or Adjusted Cost Price multiplied by 60% of
prior to July 29, 1997 the Purchase Number
After July 29, 1997 and on or Adjusted Cost Price multiplied by 40% of
prior to July 29, 1998 the Purchase Number
After July 29, 1998 and on or Adjusted Cost Price multiplied by 20% of
prior to July 29, 1999 the Purchase Number
New Management Investors
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If the Termination Date Occurs: Option Purchase Price
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On or prior to the first anniversary Adjusted Cost Price multiplied by the
of the Closing Date Purchase Number
After the first anniversary of the Adjusted Cost Price multiplied by 66 2/3%
Closing Date, and on or prior to of the Purchase Number
the second anniversary of the
Closing Date
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After the second anniversary of Adjusted Cost Price multiplied by 33 1/3%
the Closing Date, and on or prior of the Purchase Number
to the third anniversary of the
Closing Date
As used herein, "Closing Date" for each New Management Investor means the date
specified opposite such person's respective name on Schedule II hereto.
Notwithstanding anything to the contrary contained herein, in connection
with the exercise of any Purchase Option pursuant to Section 6.3, the Company
may deduct from the Option Purchase Price paid to any Management Investor the
aggregate amount of the outstanding principal and accrued but unpaid interest
due on any Promissory Note of such Management Investor to the Company.
As used herein, "Adjusted Cost Price" for each share of Common Stock means
the original purchase price per share for the Management Investor's Common
Stock as set forth in Section 1.1 (including any shares of Common Stock which
have been converted into other shares of capital stock of the Company, and
adjusted for any stock dividend payable upon, or subdivision or combination of,
the Common Stock);
(iii) Sale in Public Offering. Share sold in a Public Offering will be
sold free of the restrictions contained in this Article VI, but this Article VI
shall continue to apply in accordance with its terms to all Common Stock not
sold in such offering. If less than all of a Management Investor's shares of
Common Stock are sold in such an offering, for purposes of any subsequent
calculation hereunder of the Option Purchase Price, the Option Purchase Price
shall equal the Adjusted Cost Price multiplied by the product of the Adjusted
Cost Price Percentage and the Adjusted Purchase Number (as hereinafter
defined), where: (w) "Adjusted Purchase Number" means the remainder determined
by subtracting the Publicly-Sold Stock from the Purchase Number, (x) "Publicly-
Sold Stock" means the total number of shares of Common Stock previously sold by
the respective Management Investor in a public offering, and (z) "Adjusted Cost
Price Percentage" means (1) 20% multiplied by the number of years elapsed from
July 29, 1994 for the Original Management Investors, and (2) 33 1/3% multiplied
by the number of years elapsed from the "Closing Date" specified on Schedule II
with respect to the respective New Management Investors.
(b) Company's Right of First Refusal. In the event that, on or prior to
July 29, 1999 as to the Original Management Investors, and the Third
Anniversary as to the New Management Investors, (i) a Management Investor is no
longer employed by the Company; (ii) the Company or its designee has declined
to
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exercise the Purchase Option with respect to any of such Management Investor's
Common Stock; and (iii) the Management Investor thereafter proposes to sell any
or all of such Common Stock to a third party in a bona fide transaction, the
Management Investor may not Transfer such Common Stock without first offering
to sell such Common Stock to the Company pursuant to this Section 6.3(b).
The Management Investor shall deliver a written notice (a "Sale Notice")
to the Company describing in reasonable detail the Securities being offered,
the name of the offeree, the purchase price requested and all other material
terms of the proposed Transfer. Upon receipt of the Sale Notice, the Company,
or a designee selected by a majority of the non-employee members of the Board
of Directors of the Company, shall have the right and option to purchase all or
any portion of the Securities being offered at the price and on the terms of
the proposed Transfer set forth in the Sale Notice. Within 30 days after
receipt of the Sale Notice, the Company shall notify such Management Investor
whether or not it wishes to purchase any or all of the offered Securities.
If the Company elects to purchase any of the offered Securities, the
closing of the purchase and sale of such Securities shall be held at the place
and on the date established by the Company in its notice to the Management
Investor in response to the Sale Notice, which in no event shall be less than
10 or more than 60 days from the date of such notice. In the event that the
Company does not elect to purchase all the offered Securities, the Management
Investor may, subject to the other provisions of this Agreement, Transfer the
remaining offered Securities to the offeree specified in the Sale Notice at a
price no less than the price specified in the Sale Notice and on other terms no
more favorable to the transferee(s) thereof than specified in the Sale Notice
during the 180-day period immediately following the last date on which the
Company could have elected to purchase the offered Securities. Any such
Securities not transferred within such 180-day period will be subject to the
provisions of this Section 6.3(b) upon subsequent Transfer.
6.4. Involuntary Transfers. In the event that the Securities owned by any
Management Investor shall be subject to sale or other Transfer (the date of
such sale or transfer shall hereinafter be referred to as the "Transfer Date")
on or prior to July 29, 1999 as to the Original Management Investors, and the
Third Anniversary as to the New Management Investors, by reason of (i)
bankruptcy or insolvency proceedings, whether voluntary or involuntary, or (ii)
distraint, levy, execution or other involuntary Transfer, then such Management
Investor shall give the Company written notice thereof promptly upon the
occurrence of such event stating the terms of such proposed Transfer, the
identity of the proposed transferee, the price or other consideration, if
readily determinable, for which the Securities are proposed to be transferred,
and the number of shares of Common Stock to be transferred. After its receipt
of such notice or, failing such receipt,
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after the Company otherwise obtains actual knowledge of such a proposed
Transfer, the Company, or a designee selected by a majority of the non-employee
members of the Board of Directors of the Company, shall have the right and
option to purchase all, but not less than all of such Securities which right
shall be exercised by written notice given by the Company to such proposed
transferor within 60 days following the Company's receipt of such notice or,
failing such receipt, the Company's obtaining actual knowledge of such proposed
Transfer. Any purchase pursuant to this Section 6.4 shall be at the price and
on the terms applicable to such proposed Transfer. If the nature of the event
giving rise to such involuntary Transfer is such that no readily determinable
consideration is to be paid for the Transfer of the Securities, the price to be
paid by the Company shall be the Option Purchase Price that would have been
applicable hereunder had the Management Investor incurred a Termination Date as
of the date of such proposed Transfer for the Securities. The closing of the
purchase and sale of Securities shall be held at the place and the date to be
established by the Company, which in no event shall be less than 10 or more
than 60 days from the date on which the Company gives notice of its election to
purchase the Securities. At such closing, the Management Investor shall deliver
the certificates evidencing the number of shares of Common Stock to be
purchased by the Company, accompanied by stock powers duly endorsed in blank or
duly executed instruments of transfer, and any other documents that are
necessary to transfer to the Company good title to such of the Securities to be
transferred, free and clear of all pledges, security interests, liens, charges,
encumbrances, equities, claims and options of whatever nature other than those
imposed under this Agreement, and concurrently with such delivery, the Company
shall deliver to the Management Investor the full amount of the purchase price
for such Securities in cash by certified or bank cashier's check.
6.5. [Intentionally omitted]
6.6. Purchaser Representative. If the Company or any Investor enters into
any negotiation or transaction for which Rule 506 (or any similar rule then in
effect) promulgated by the Securities and Exchange Commission under the
Securities Act may be available with respect to such, negotiation or
transaction (including a merger, consolidation or other reorganization), each
Management Investor will, at the request of the Company, appoint a purchaser
representative (as such term is defined in Rule 501 (h) promulgated by the
Securities and Exchange Commission under the Securities Act) reasonably
acceptable to the Company. If any Management Investor appoints the purchaser
representative designated by the Company, the Company will pay the fees of such
purchaser representative, but if any Management Investor declines to appoint
the purchaser representative designated by the Company such Management Investor
will appoint another purchaser representative (reasonably acceptable to the
Company), and
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such Management Investor will be responsible for the fees of the purchaser
representative so appointed.
6.7. [Intentionally omitted]
ARTICLE VII
REGISTRATION RIGHTS
The Investors shall have registration rights with respect to the Shares as
set forth in the Registration. Rights Agreement attached hereto as Exhibit B.
Each of the Investors agree not to effect any public sale or distribution of
any securities of the Company during the periods specified in the Registration
Rights Agreement, except as permitted by the Registration Rights Agreement, and
each such Investor agrees to be bound by the rights of priority to participate
in offerings as set forth therein.
ARTICLE VIII
MISCELLANEOUS
8.1. Amendment and Modification. This Agreement may be amended or
modified, or any provision hereof may be waived, provided that such amendment
or waiver is set forth in a writing executed by (i) the Company, (ii) CVC (so
long as CVC and its Affiliates own in the aggregate at least 25% of the
outstanding Common Stock on a fully diluted basis) and (iii), the holders of a
majority of the outstanding Common Stock on a fully diluted basis (including
Shares owned by CVC and its Affiliates); provided, however that the provisions
of this Agreement which are for the express benefit of Masco cannot be amended,
modified or waived, unless Masco also executes such amendment or waiver. No
course of dealing between or among any persons having any interest in this
Agreement will be deemed effective to modify, amend or discharge any part of
this Agreement or any rights or obligations of any person under or by reason of
this Agreement.
8.2. Survival of Representatives and Warranties. All representations,
warranties, covenants and agreements set forth in this Agreement will survive
the execution and delivery of this Agreement, regardless of any investigation
made by an Investor or on its behalf.
8.3. Successors and Assigns; Entire Agreement. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns and
executors,
14
<PAGE>
administrators and heirs. This Agreement sets forth the entire agreement and
understanding among the parties as to the subject matter hereof and merges and
supersedes all prior discussions and understandings of any and every nature
among them.
8.4. Separability. In the event that any provision of this Agreement or
the application of any provision hereof is declared to be illegal, invalid or
otherwise unenforceable by a court of competent jurisdiction, the remainder of
this Agreement shall not be affected except to the extent necessary to delete
such illegal, invalid or unenforceable provision unless that provision held
invalid shall substantially impair the benefits of the remaining portions of
this Agreement.
8.5. Notices. All notices provided for or permitted hereunder shall be
made in writing by hand-delivery, registered or certified first-class mail,
telex, telecopier or air courier guaranteeing overnight delivery to the other
party at the following addresses (or at such other address as shall be given in
writing by any party to the others):
If to the Company to:
Delco Remy International, Inc.
2902 Enterprise Drive
Anderson, IN 46013
Attention: Thomas J. Snyder, President
If to CVC, to:
Citicorp Venture Capital Ltd.
399 Park Avenue
14th Floor
New York, NY 10043
Attention: Richard M. Cashin, Jr., President
with a required copy to:
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia PA 19103
Attention.: G. Daniel O'Donnell, Esquire
15
<PAGE>
If to WEP, to:
World Equity Partners, L.P.
399 Park Avenue
New York, NY 10043
Attention: Byron L. Knief
with a required copy to:
Kirkland & Ellis
153 East 53rd Street
New York, NY 10022-4675
Attention: Kirk A Radke, Esquire
If to Masco, to:
MASG Disposition, Inc.
275 Rex Boulevard
Auburn Hills, MI 48326
Attention: E. H. Billig
with a required copy to:
Masco Corporation
21001 Van Borne Road
Taylor, MI 48180
Attention: General Counsel
If to Sperlich, to:
Harold K. Sperlich
3333 West Shore Drive
Orchard Lake, MI 48324
If to Gerrity, to:
James R. Gerrity
25150 North Windy Walk Drive - #34
Scottsdale, AZ 85265
If to the Other Investors or Management Investors or any of them, to their
addresses as listed in the books of the Company.
16
<PAGE>
All such notices shall be deemed to have been duly given: when delivered
by hand, if personally delivered; five business days after being deposited in
the mail, postage prepaid, if mailed; when answered back, if telexed; when
receipt acknowledged, if telecopied; and on the next business day, if timely
delivered to an air courier guaranteeing overnight delivery.
8.6. Governing Law. The validity, performance, construction and effect of
this Agreement shall be governed by and construed in accordance with the
internal law of Delaware, without giving effect to principles of conflicts of
law.
8.7. Headings. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall
they affect their meaning, construction or effect.
8.8. Counterparts. This Agreement may be executed in two or more
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same instrument.
8.9. Further Assurances. Each party shall cooperate and take such action
as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
8.10. Termination. Unless sooner terminated in accordance with its terms,
this Agreement shall terminate on July 29, 2004.
8.11. Remedies. In the event of a breach or a threatened breach by any
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The
parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that the remedy at law, including
monetary damages, for breach of such provision will be inadequate compensation
for any loss and that any defense in any action for specific performance that a
remedy at law would be adequate is waived.
8.12. Party No Longer Owning Securities. If a party hereto ceases to own
any Securities, such party will no longer be deemed to be an Investor or
Management Investor for purposes of this Agreement.
17
<PAGE>
8.13. No Effect on Employment. Nothing herein contained shall confer on
any Management Investor the right to remain in the employ of the Company or any
of its subsidiaries or Affiliates.
8.14. Pronouns. Whenever the context may require, any pronouns used herein
shall be deemed also to include the corresponding neuter, masculine or feminine
forms.
8.15. Effectiveness of Agreement. This Amended and Restated Securities
Purchase and Holders Agreement will become effective upon receipt of the
approvals of the stockholders as required by Section 8.1 hereto and upon the
closing date of the initial public offering ("IPO") of Class A Common Stock of
the Company. In the event the closing of the IPO has not occurred on or before
December 31, 1997, then this Agreement shall be null and void and of no further
force and effect and the Securities Purchase and Holders Agreement dated July
29, 1994 shall remain in effect and be binding upon the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Securities
Purchase and Holders Agreement the day and year first above written.
DELCO REMY INTERNATIONAL, INC.
By: /s/ Thomas J. Snyder
---------------------------------
Its: President
---------------------------------
CITICORP VENTURE CAPITAL LTD.
By: /s/ Michael Delaney
---------------------------------
Its:
---------------------------------
WORLD EQUITY PARTNERS, L.P.
By: /s/ Byron Knief
---------------------------------
Its:
---------------------------------
18
<PAGE>
/s/ Stephen Sherrill
------------------------------ --------------------------------
Bruce C. Bruckmann Stephen Sherrill
/s/ Michael A. Delaney /s/ Kilin To
------------------------------ --------------------------------
Michael A. Delaney Kilin To
/s/ Peter Gerry /s/ David Thomas
------------------------------ --------------------------------
Peter Gerry David Thomas
/s/ Byron Knief /s/ James A. Urry
------------------------------ --------------------------------
Byron Knief James A. Urry
/s/ Noelle Cournoyer Dourmar
------------------------------ --------------------------------
Thomas McWilliams Noelle Cournoyer Dourmar
/s/ Harold O. Rosser, II /s/ Robert Fitzsimmons
------------------------------ --------------------------------
Harold O. Rosser, II Robert Fitzsimmons
/s/ Joseph Silvestri /s/ David Fann
------------------------------ --------------------------------
Joseph Silvestri David Fann
------------------------------ --------------------------------
David Y. Howe Lyle Lodholtz
------------------------------ --------------------------------
David L. Harbert Nicole Lodholtz
/s/ Robert E. Lawson
------------------------------ --------------------------------
Robert E. Lawson Carl M. Pittner
/s/ David Brown
------------------------------ --------------------------------
John H. Combes, Jr. David Brown
/s/ Paul J. Newport /s/ John M. Mayfield
------------------------------ --------------------------------
Paul J. Newport John M. Mayfield
/s/ M. Lawrence Parker /s/ Richard M. Cashin, Jr
------------------------------ --------------------------------
M. Lawrence Parker Richard M. Cashin, Jr.
/s/ Richard L. Stanley /s/ Michael W. Cooney
------------------------------ --------------------------------
Richard L. Stanley Michael W. Cooney
19
<PAGE>
/s/ Roderick English
------------------------------ --------------------------------
Roderick English James T. Bartleme
------------------------------ --------------------------------
Gabrielle Robinson Peter Romero
/s/ David E. Stoll /s/ Thomas R. Jennett
------------------------------ --------------------------------
David E. Stoll Thomas R. Jennett
/s/ David H. Livingston
------------------------------ --------------------------------
William W. Whitney David H. Livingston
/s/ Terry J. Pahls /s/ Richard L. Keister
------------------------------ --------------------------------
Terry J. Pahls Richard L. Keister
------------------------------ --------------------------------
William M. Coats Susan E. Goldy
/s/ Nick Bozich
------------------------------ --------------------------------
Ann S. Coats Nick Bozich
/s/ Patrick Mobouck /s/ Thomas R. Schultz
------------------------------ --------------------------------
Patrick Mobouck Thomas R. Schultz
/s/ Mark Kencyzk
------------------------------ --------------------------------
Mark Kencyzk James B. Schultz
/s/ Joseph Felicelli /s/ Robert J. Schultz
------------------------------ --------------------------------
Joseph Felicelli Robert J. Schultz
/s/ Aldo Fozzati /s/ Susan Hendricks
------------------------------ --------------------------------
Aldo Fozzati Susan Hendricks
/s/ Michael C. Alma /s/ Scott R. Sperlich
------------------------------ --------------------------------
Michael C. Alma Scott R. Sperlich
/s/ Donald H. McGiven /s/ Terry Sperlich
------------------------------ --------------------------------
Donald H. McGiven Terry Sperlich
------------------------------ --------------------------------
Curtiss H. Nickel Laurie Graham
20
<PAGE>
/s/ Timothy A. Wills /s/ J. Brian Graham
------------------------------ --------------------------------
Timothy A. Wills J. Brian Graham
/s/ Thomas J. Snyder /s/ Scott Graham
------------------------------ --------------------------------
Thomas J. Snyder Scott Graham
/s/ Cynthia S. Cutler /s/ Colleen Graham
------------------------------ --------------------------------
Cynthia S. Cutler Colleen Graham
/s/ Scott R. Schultz /s/ Gwen Crawley
------------------------------ --------------------------------
Scott R. Schultz Gwen Crawley
------------------------------ --------------------------------
Jane C. Demers Stephen D. Cashin
------------------------------
James R. Gerrity
21
<PAGE>
<TABLE>
<S> <C>
------------------------------ --------------------------------
William M. Coats, as Trustee Ann S. Coats, as Trustee
under the William Coats Living under the Ann S. Coats Living
Trust, dated September 19, 1990 Trust, dated September 19, 1990
/s/ James R. Gerrity
------------------------------ --------------------------------
The David F. Thomas Family Trust James R. Gerrity, Trustee under
dated December 27, 1989 Living Trust dated March 16, 1990
/s/ Harold K. Sperlich
------------------------------
Harold K. Sperlich, Trustee
under Agreement dated
February 4, 1985, as amended,
with Keith Serlich, as Settlor
</TABLE>
MASG, DISPOSITION, INC. THE BILLING FAMILY LIMITED
PARTNERSHIP
By: By: /s/ E.H. Billing
----------------------------- -----------------------------
Name: Name: E.H. Billing
Title: Title:
63 BR PARTNERSHIP
By: /s/ William Comfort
-----------------------------
Name: William Comfort
Title:
CCT PARTNERS I, L.P. DAISY FARM LIMITED PARTNERSHIP
By: /s/ Thomas Sanders By: /s/ Thomas J. Snyder
----------------------------- -----------------------------
Name: Thomas Sanders Name: Thomas J. Snyder
Title: Title:
NATASHA PARTNERSHIP
By:
-----------------------------
Name:
Title:
22
