Exhibit 10.11


 


SECURITIES
REPURCHASE AND CANCELLATION AGREEMENT


 


This Securities Repurchase and Cancellation
Agreement (the “Agreement”) is made and entered into as of January 23,
2009 (the “Effective Date”) by and between Robert McCormick (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 five thousand three hundred thirty
(5,330) 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 one thousand
two hundred ninety nine (1,299) 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 one thousand two hundred ninety nine (1,299) shares (the “Shares”)
of Common Stock and options to purchase an aggregate of four hundred twenty two
(422) shares of Common Stock (the “Options;” collectively with the
Shares, 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 Shares and Options and
provide for the cancellation of the Options upon payment of the Purchase Price
(as defined below), less any required withholding.


 


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 and Cancellation of Options.


 


(a)                                 Repurchase
and Cancellation.  In consideration
for the Purchase Price, (i) 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 and (ii) and (ii) the Securityholder and the
Company agree that the Options shall be cancelled as of the date hereof.


 


(b)                                 Purchase
Price.


 


(i)                                     The
aggregate purchase price (the “Purchase Price”) for the Repurchased
Securities is Four Hundred Sixty
Four Thousand Eight Hundred Fifty Dollars ($464,850), comprised of cash in the
amount of Three Hundred Thirty Four Thousand Nine Hundred Fifty Dollars
($334,950) and the cancellation of the principal amount of One Hundred Twenty
Nine Thousand Nine Hundred Dollars ($129,900) of that certain promissory note
dated as of October 24, 2007, representing a price per Share of Two
Hundred Ninety Four Dollars and Sixty Two and 52/100 Cents ($294.6252) and a price per Option of One Hundred
Ninety Four Dollars and Sixty Two and 52/100 Cents ($194.6252).  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.


 

















 


(ii)                                  The
price per Share and price per Option set forth in Section l(b)(i) above
reflect an adjustment to the estimated per Share price of Two Hundred Ninety
Six Dollars and Ninety and 41/100 Cents ($296.9041) used in the Securities
Repurchase and Cancellation Agreement dated as of December 22, 2008
between the Company and the Securityholder (the “December Agreement”), and
it is understood and agreed that the price per Share and price per Option for
all Repurchased Securities repurchased by the Company pursuant to this
Agreement and the December Agreement is Two Hundred Ninety Five Dollars
and Seventy Five and 80/100 Cents ($295.7580) and One Hundred Ninety Five
Dollars and Seventy Five and 80/100 Cents ($195.7580), respectively.


 


(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 Four Dollars and Sixty
Two and 52/100 Cents ($294.6252), 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 sum of (i) product
of (a) the difference between Two Hundred Ninety Four Dollars and Sixty
Two and 52/100 Cents ($294.6252) and the Change in Control Price multiplied by (b) one
thousand two hundred ninety nine (1,299) shares, and (ii) the product of (a) the
difference between One Hundred Ninety Four Dollars and Sixty Two and 52/100
Cents ($194.6252) and the Change in Control Price multiplied by (b) four
hundred twenty two (422) 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 September 7, 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 Three Hundred Thirty Four Thousand Nine Hundred Fifty Dollars
($334,950).


 


(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 l(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;


 


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(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.


 


5.                                      Miscellaneous.  No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Securityholder and the Company.  No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party will be
deemed a waiver of similar or dissimilar provisions or conditions at the same
or any prior or subsequent time.  No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. 
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.


 


6.                                      Severability.  The invalidity or unenforceability of any
provisions of this Agreement will not affect the validity or enforceability of
any other provision of this Agreement, which will remain in full force and
effect.


 


7.                                      Survivability.  The representations, warranties and covenants
set forth herein shall survive the execution and delivery hereof, the Effective
Date and the transfer of the Repurchased Securities pursuant hereto.


 


[SIGNATURE
PAGE FOLLOWS]


 


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IN WITNESS WHEREOF, the Securityholder and
the Company have executed this Agreement as of the Effective Date.


 


	
   

  	
  SECURITYHOLDER:

  
	
   

  	
   

  
	
   

  	
  /s/
  Robert McCormick

  
	
   

  	
  Robert
  McCormick

  
	
   

  	
   

  
	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  DOUGLAS
  DYNAMICS HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mark Rosenbaum

  
	
   

  	
  Name:
  Mark Rosenbaum

  
	
   

  	
  Title:
  Authorized Signatory

  



 


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