Exhibit
10.8
Execution Copy
SECURITIES REPURCHASE AND CANCELLATION
AGREEMENT
This Securities Repurchase and Cancellation
Agreement (the “Agreement”) is made and entered into as of December 22,
2008 (the “Effective Date”) by and between James Janik (the “Securityholder”)
and Douglas Dynamics Holdings, Inc. (the “Company”).
WHEREAS, the Company has previously granted
to the Securityholder, pursuant to the Company’s 2004 Stock Incentive Plan,
certain options to acquire the common stock of the Company, par value $.01 per
share (the “Common Stock”), and the Securityholder as of the date hereof
holds options to purchase an aggregate of twenty one thousand four hundred
forty four (21,444) shares of Common Stock, all of which are exercisable at a
per share price of One Hundred Dollars ($100.00);
WHEREAS, the Securityholder has previously
exercised certain of his options and as of the date hereof owns three thousand
three hundred (3,300) shares of Common Stock, all of which were acquired at a
per share price of One Hundred Dollars ($100.00);
WHEREAS, the Company has offered to
repurchase three thousand two hundred twenty five (3,225) shares of Common
Stock (the “Repurchased Securities”) on the terms and conditions set
forth herein and the Securityholder has accepted the Company’s repurchase
offer; and
WHEREAS, the Company and the Securityholder
desire to set forth the terms of the repurchase of the Repurchased Securities.
NOW, THEREFORE, in consideration of the
foregoing recitals and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Repurchase of the Repurchased Securities.
(a) Repurchase
and Cancellation. In consideration
for the Purchase Price (as defined below), the Securityholder hereby sells,
assigns and transfers to the Company, and the Company hereby accepts, purchases
and acquires, all of the Securityholder’s right, title and interest in and to
the Repurchased Securities.
(b) Purchase
Price. The aggregate purchase price
(the “Purchase Price”) for the Repurchased Securities is Nine Hundred
Fifty Seven Thousand Five Hundred Sixteen Dollars ($957,516), comprised of cash
in the amount of Six Hundred Sixty Five Thousand Sixteen Dollars ($665,016) and
the cancellation of the principal amount of Two Hundred Ninety Two Thousand
Five Hundred Dollars ($292,500) of that certain promissory note dated as of October 24,
2007, representing a price per Share of Two Hundred Ninety Six Dollars and
Ninety and 41/100 Cents ($296.9041). The
cash component of the Purchase Price, less any required withholdings, shall be
paid by the Company to the Securityholder in immediately available funds
promptly following the execution and delivery of this Agreement to such bank
account as designated by Securityholder.
(c) Purchase
Price Adjustment. In the event the
Company consummates a transaction which results in a Change of Control (as
defined in the Company’s Second Amended and Restated Certificate of
Incorporation dated April 8, 2004), within twelve (12) months following
the date hereof, or in the event the Company agrees in writing to consummate
such a transaction within twelve (12) months following the date hereof (and
such transaction subsequent to such 12-month period occurs), and the price per
share of Common Stock payable in such Change of Control transaction (the “Change
in
Control Price”)
is less than Two Hundred Ninety Six Dollars and Ninety and 41/100 Cents
($296.9041), then the Securityholder agrees that he will promptly (and in any
event no later than the date of the consummation of any such transaction) remit
to the Company an amount equal to the product of (i) the difference
between Two Hundred Ninety Six Dollars and Ninety and 41/100 Cents ($296.9041)
and the Change in Control Price multiplied by (ii) three thousand two
hundred twenty five (3,225) shares.
(d) Termination
of Employment. In the event the
Securityholder is terminated for Cause (as defined in the employment agreement
between the Securityholder and the Company, dated as of March 30, 2004
(the “Employment Agreement”)) or voluntarily terminates his employment
with the Company for any reason other than Material Breach (as defined in the
Employment Agreement) within thirty-six (36) months following the date hereof,
then the Securityholder agrees that he will promptly (and in any event no later
than ten (10) business days after date of such termination) remit to the
Company Six Hundred Thirty Five Thousand Sixteen Dollars ($635,016).
(e) Offset
Rights. The Securityholder agrees
that the Company has the right to offset any obligation of the Company to pay
proceeds or monies to the Securityholder, whether pursuant to the Employment
Agreement, pursuant to other securities of the Company held by the
Securityholder, or otherwise, against any unsatisfied obligations of the
Securityholder hereunder (including without limitation under Sections 1(c) or
(d) above).
2. Representations
of Securityholder. The
Securityholder hereby represents and warrants that:
(a) The
Securityholder owns the Repurchased Securities free and clear of any and all
covenants, conditions, restrictions, liens and adverse claims or rights
whatsoever, subject only to the terms and conditions of the Second Amended and
Restated Securityholders Agreement dated as of June 30, 2004 among the
Company and certain of its stockholders, optionholders and warrantholders;
(b) the
execution, delivery and performance by the Securityholder of this Agreement and
the consummation thereby of the transactions contemplated hereby are within the
Securityholder’s powers and have been duly authorized by all necessary action
on the part of the Securityholder;
(c) this
Agreement constitutes the legal, valid and binding agreement of the
Securityholder, enforceable against him in accordance with its terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting creditors’ rights generally and subject
to general principles of equity; and
(d) the
execution, delivery and performance by the Securityholder of this Agreement
does not and will not contravene or conflict with or constitute a violation of
any provision of applicable law or any contract, agreement, indenture or other
instrument binding on such person or any of his assets.
3. Non-Disclosure. The existence and terms of this Agreement are
confidential. The Securityholder will
not at any time disclose to any third party, except his spouse or significant
other, attorney, accountant or other professional advisors, the existence or
terms of this Agreement, except as required by law. The Securityholder will request that each
person to whom he communicates such information agrees similarly to be bound.
4. Governing
Law. This Agreement shall be
construed in accordance with and governed by the internal laws (without
reference to choice or conflict of laws) of the State of Delaware.
2