Document:

EX-10.1

 

EXHIBIT 10.1

Stoneridge, Inc. and the following Executive Officers are parties to the Amended and Restated
Change in Control Agreement: John C. Corey, President, Chief Executive Officer and Director,
George E. Strickler, Executive Vice President, Chief Financial Officer and Treasurer, Mark J.
Tervalon, President —Stoneridge Electronics and Thomas A. Beaver, Vice President of Global Sales
and Systems Engineering.

STONERIDGE, INC.

AMENDED AND RESTATED

CHANGE IN CONTROL AGREEMENT

     THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT (the “Agreement”) is by and between
Stoneridge, Inc., an Ohio corporation (“Employer”), and                                          (“Executive”), made
this 2nd day of August, 2007.

RECITALS

     A. Executive is presently employed by Employer as its                     ;

     B. Employer wishes to induce Executive to continue as its                      and, accordingly, to
provide certain employment security to Executive in the event of a “Change in Control” (as
hereinafter defined);

     C. Employer believes that it is in the best interest of its shareholders for Executive to
continue in his position on an objective and impartial basis and without distraction, whether based
upon individual financial uncertainties or otherwise, or conflict of interest as a result of a
possible or actual Change in Control; and

     D. In consideration of this Agreement, Executive is willing to continue as Employer’s
                    ;

     NOW THEREFORE, in consideration of Executive continuing as the                      of Employer and
of the mutual promises herein contained, Executive and Employer, intending to be legally bound,
hereby agree as follows:

SECTION 1

DEFINITIONS

     1. A “Change in Control” for the purpose of this Agreement will be deemed to have occurred if
during Executive’s employment with Employer, at any time:

          (a) the Board of Directors or shareholders of Employer approve a consolidation or merger that
results in the shareholders of Employer, immediately prior to the transaction giving rise to the
consolidation or merger, owning less than 50% of the total combined voting power of all classes of
equity securities entitled to vote of the surviving entity immediately after the consummation of
the transaction giving rise to the merger or consolidation;

          (b) the Board of Directors or shareholders of Employer approve the sale of substantially all
of the assets of Employer or the liquidation or dissolution of Employer;

          (c) any person or other entity (other than Employer or a subsidiary of Employer or any
Employer employee benefit plan (including any trustee of any such plan acting in its capacity as
trustee)) purchases any common shares (or securities convertible into common shares) pursuant to a
tender or exchange offer without the prior consent of the Board of Directors or becomes the
beneficial owner of securities of Employer representing 35% or more of the voting power of
Employer’s outstanding securities; provided, however, any acquisition of 35% or more of the voting
power of Employer’s outstanding securities resulting, directly or indirectly, from the sale or
sales by members of the family of D.M. Draime, including,

 

 

but not limited to, the spouse of D.M. Draime and D.M. Draime’s lineal descendants and their
spouses and trusts for the benefit of any of the foregoing, with the prior consent of the
Employer’s Board of Directors shall not be a Change in Control; or

          (d) during any two-year period, individuals who at the beginning of such period constitute the
entire Board of Directors cease to constitute a majority of the Board of Directors, unless the
election or the nomination for election of each new director is approved by the Nominating and
Corporate Governance Committee (if comprised entirely of directors who were in office at the
beginning of that period) or at least two-thirds of the directors then still in office who were
directors at the beginning of that period.

     2. A “Triggering Event” for the purpose of this Agreement will be deemed to have occurred if
within two years after the date on which the Change in Control occurred:

          (a) Employer separates Executive from service with Employer, other than in the case of a
Termination for Cause (as defined below); or

          (b) Executive separates from service with Employer for Good Reason (as defined below).

For purposes of this Agreement, the term “separates from service with Employer” shall mean
Executive’s Separation from Service, as determined under Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”), and the regulations promulgated thereunder; provided, however,
that such Separation from Service with Employer is not as a result of Executive’s death, retirement
or disability (as defined in Code Section 409A). If, however, Executive separates from service
with Employer as a result of death or disability (as defined in Code Section 409A) after Employer
has provided written notice to Executive of Employer’s intent to separate Executive from service
with Employer at a future date, but in no event later than two years after the date on which the
Change in Control occurred, then notwithstanding the prior sentence, Executive or his estate, as
applicable, will be entitled the benefits provided herein.

     3. Executive will be deemed to have separated from service with Employer for “Good Reason” for
the purpose of this Agreement if:

          (a) Employer materially reduces Executive’s title, responsibilities, power or authority in
comparison with his title, responsibilities, power or authority at or about the time of the Change
in Control;

          (b) Employer assigns Executive duties that are materially inconsistent with the duties
assigned to Executive on the date on which the Change in Control occurred, and which duties
Employer persists in assigning to Executive despite the prior written objection of Executive;

          (c) Employer materially reduces Executive’s base compensation, or materially reduces his group
health, life, disability or other insurance programs (including any such benefits provided to
Executive’s family), his pension, retirement or profit-sharing benefits or any benefits provided by
Employer’s Long-Term Incentive Plan or any substitute therefor, or excludes him from any plan,
program or arrangement, including but not limited to any bonus or incentive plans in which
Employer’s other executive officers are included; or

          (d) Employer requires Executive to be based at or generally work from any location more than
100 miles from the geographical center of the city where Executive worked or Executive’s residence
on the date on which the Change of Control occurred (the “Location of Employment”) or Employer over
the course of any calendar month requires Executive to be away from his Location of Employment for
more than 50% of the business days during that month.

 

 

     4. A “Termination for Cause” for the purposes of this Agreement will be deemed to have
occurred if, and only if, the Board of Directors of Employer, or its designee, in good faith
determines that Executive’s termination is because of any one or more of the following:

          (a) misappropriation of funds from Employer;

          (b) conviction of a felony;

          (c) commission of a crime or act or series of acts involving moral turpitude;

          (d) commission of an act or series of acts of dishonesty that are materially detrimental to
the best interests of Employer;

          (e) willful and repeated failure to perform the duties associated with Executive’s position,
which failure has not been cured within thirty (30) days after Employer gives notice thereof to
Executive; or

          (f) failure to cooperate with any Employer investigation or with any investigation, inquiry,
hearing or similar proceedings by any governmental authority having jurisdiction over Employer or
Executive.

     5. “Executive’s Annual Bonus” means the greater of Executive’s average annual bonus over the
last three completed fiscal years or the last five completed fiscal years. If Executive has not
been employed by Employer for three completed fiscal years, Executive’s Annual Bonus means the
average annual bonus awarded to Executive for the completed fiscal years during his employment, or
if Executive has not been employed for a complete fiscal year, Executive’s Annual Bonus means an
amount equal to the incentive compensation Executive would have been entitled to in the year the
Triggering Event occurred calculated upon the assumption that 100% of personal and Employer targets
or performance goals were achieved in that year.

     6. “Executive’s Annual Salary” means the greater of Executive’s annual base salary at the time
of a Triggering Event or at the time of the occurrence of a Change in Control.

     7. “Executive Pro Rata Annual Bonus” means an amount equal to the pro rata amount of incentive
compensation Executive would have been entitled to at the time of a Triggering Event calculated on
the assumption that 100% of personal and Employer targets or performance goals were achieved in the
year in which the Triggering Event occurred.

SECTION 2

TRIGGERING EVENT PAYMENTS

     1. After the occurrence of a Triggering Event, Employer shall commence payments to Executive
of the benefits or amounts set forth hereunder, provided the release required and described in
Section 9 has been executed and delivered by Executive to Employer and, as applicable, such release
has not been timely revoked:

          (a) A lump sum payment, which will be in addition to any other compensation or
remuneration to which Executive is, or becomes, entitled to receive from Employer. The
payment of the benefit shall be made in one lump sum cash payment ninety (90) days after
Executive’s Triggering Event. The lump sum cash payment shall be in an amount equal to the
sum of (i) two times Executive’s Annual Salary, plus (ii) two times Executive’s Annual Bonus.

          (b) In addition to making the payment described above, Employer shall pay Executive a
lump sum cash payment equal to the Executive Pro Rata Annual Bonus at the same time it makes
the payment described in Section 2, paragraph 1(a) above.

 

 

          (c) In addition, Employer shall, at its expense, provide Executive, and his family with
life and health insurance (“Health and Welfare Benefits”) in an amount not less than that
provided on the date on which the Change in Control occurred for a period of twenty-four (24)
months, at the time Employer commences payments described in Section 2, paragraph 1(a) above;
provided, however, Employer shall not be obligated to pay for Health and Welfare Benefits
after the date on which Executive shall be eligible to receive benefits from another employer
which are substantially equivalent to or greater than the benefits Executive and his family
received from Employer; provided, further, that if Executive’s continuation in some or all of
Employer Health and Welfare Benefits is not available, then Employer shall make monthly
payments to Executive commencing the first day of the month after Employer makes the payments
described in Section 2, paragraph 1(a) above equal to the cost of the coverage for similarly
situated employees of Employer, as determined solely by Employer, over a period of
twenty-four (24) months with respect to those benefits among the Health and Welfare Benefits
not available. The benefits shall run concurrent with the health insurance continuation
obligation otherwise available under the COBRA rules.

     All payments pursuant to this Agreement shall be made less standard required deductions and
withholdings. Notwithstanding the above, if Executive is a “specified employee” (within the
meaning of Section 409A of the Code), benefits or payments to Executive pursuant to Section 2 shall
be made or commence, as applicable, on the date which is the earlier of (i) the Executive’s death
or (ii) six (6) months after the date of Executive’s separation from service with Employer.

     2. Notwithstanding anything in this Agreement to the contrary, in the event that it shall be
determined (as hereinafter provided) that any payment or distribution by Employer to or for the
benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement, or otherwise pursuant to or by reason of any other agreement, policy, plan,
program or arrangement, including without limitation any grants under Employer’s Long-Term
Incentive Plan, any stock option, restricted stock, stock appreciation right or similar right, or
the lapse or termination of any restriction on, or the vesting or exercisability of, any of the
foregoing (in the aggregate “Total Payments”), would be subject, but for the application of this
Section 2, paragraph 2, to the excise tax imposed by Code Section 4999 (or any successor provision
thereto) (the “Excise Tax”) by reason of being considered “contingent on a change in ownership or
control” of Employer and as being considered an “excess parachute payment,” both within the meaning
of Code Section 280G (or any successor provision thereto), then:

          (a) If the aggregate Parachute Value (as defined below) of the Total Payments is 110% or
less than the Safe Harbor Amount (as defined below), then the payments payable to Executive
pursuant to Section 2, paragraph 1 shall be reduced to such an amount so that Total Payments
will be capped to the extent necessary so that Total Payments will not exceed the Safe Harbor
Amount and no Excise Tax will be triggered.

          (b) If, however, the aggregate Parachute Value of the Total Payments exceeds 110% of the
Safe Harbor Amount, then the payments payable to Executive pursuant to Section 2, paragraph 1
shall not be reduced as provided for under Section 2, paragraph 2(a), but instead, the full
amount of Total Payments shall be paid to Executive. Further, to the extent the Total
Payments are determined to exceed 110% of the Safe Harbor Amount and to be subject to the
Excise Tax, Employer shall pay as soon as reasonably practicable to Executive an additional
amount (a “Gross-up”) to the extent necessary to place Executive in the same after-tax
position as Executive would have been in had no such Excise Tax been imposed on any portion
of the Total Payments; provided, however, that any Gross-up shall be paid to Executive no
later than the end of Executive’s taxable year that follows the taxable year in which
Executive pays the applicable Excise Tax.

     For purposes of this Agreement, the “Safe Harbor Amount” is the maximum aggregate Parachute
Value of the Total Payments that may be paid or distributed to Executive without triggering the
Excise Tax because such amount is less than three times Executive’s “base amount,” within the
meaning of Code Section 280G. The “Parachute Value” of the Total Payments is the aggregate present
value as of the date of the Change in Control of that portion of the Total Payments that
constitutes “parachute payments,” within the meaning of Code Section 280G.

 

 

     The calculation of the Total Payments, the potential Excise Tax liability, the Safe Harbor
Amount, the Parachute Value, and the Gross-up amount, as well as the method in which the reduction
in payments under Section 2, paragraph 2(a) will be applied, shall be conducted and determined by a
national accounting firm selected by Employer and its determinations shall be binding on all
parties; provided, however, that if the calculation of such national accounting firm will result in
a reduction of any of the payments to be made to Executive under Section 2, paragraph 1, prior to
issuance of the final and binding determination, Executive shall be given a reasonable opportunity
to (i) review and comment upon all of the material, information and documentation provided to the
national accounting firm by Employer, and (ii) offer such input as Executive may determine to be
helpful to the national accounting firm’s preliminary determination.

     3. If, notwithstanding the determination of the national accounting firm or any subsequent
reduction in any of the payments to be made to Executive in accordance with Section 2, paragraph
2(a), any portion of the Total Payments are determined by the Internal Revenue Service to result in
an “excess parachute payment” within the meaning of Code Section 280G that is subject to the Excise
Tax (or any similar tax or assessment), the amounts payable to Executive by Employer shall be
increased to the extent necessary to place Executive in the same after-tax position as Executive
would have been in had no such tax been imposed on any such amount paid or payable to Executive
under this Agreement.

     4. If in any future year a determination is made that the reduction described in Section 2,
paragraph 2(a) was not required, then payment of such reduced amount shall be made as soon as
administratively feasible.

SECTION 3

SETOFF

     No amounts otherwise due or payable under this Agreement will be subject to setoff or
counterclaim by either party hereto.

SECTION 4

ATTORNEY’S FEES/DISPUTE RESOLUTION/ARBITRATION AGREEMENT

     All attorney’s reasonable fees and related expenses incurred in good faith by Executive in
connection with or relating to the enforcement by him of his rights under this Agreement will be
paid for by Employer. In addition, Executive and Employer agree that, subject to the express
exceptions set forth in this Section 4, any dispute, claim or controversy that could be brought in
court (collectively referred to herein as “Claim”) that Executive has against Employer or that
Employer has against Executive relating to or arising out of the terms of this Agreement shall be
resolved by final and binding arbitration as set forth in this Section 4. Under this Dispute
Resolution/Arbitration Agreement Section, the term Claim includes any allegations of unlawful
discrimination, harassment, wrongful discharge, constructive discharge, and claims related to the
payment of wages or benefits, under federal, state or local law and further includes, but is not
limited to, contract, tort, common law, and statutory claims. By agreeing to this Dispute
Resolution/Arbitration Agreement Section, Executive and Employer expressly waive any right that
they may have to resolve any covered Claim through any other means, including a jury or court
trial.

     Executive and Employer agree that any covered Claim shall be resolved by exclusive, final and
binding arbitration to be conducted in accordance with the American Arbitration Association’s
(“AAA”) Employment Arbitration Rules and Mediation Procedures and held in the county in which the
Executive provides a majority of Executive’s services. In any arbitration proceeding, the
Arbitrator shall apply the terms of this Dispute Resolution/Arbitration Agreement, and applicable
federal, Ohio state, and local law. In the event any portion of this Dispute
Resolution/Arbitration Agreement Section is held inapplicable as in violation of applicable law, as
determined by the arbitrator selected herein or a court of competent jurisdiction, the offending
portion of this provision may be removed or modified and the remainder of this Dispute
Resolution/Arbitration Agreement Section shall not be affected. This Dispute
Resolution/Arbitration Agreement Section shall be governed by the Federal Arbitration Act as will
any actions to compel, enforce, vacate or confirm proceedings, awards, or orders of the arbitrator
under this Dispute Resolution/Arbitration Agreement.

 

 

SECTION 5

SUCCESSORS AND PARTIES IN INTEREST

     This Agreement will be binding upon and will inure to the benefit of Employer and its
successors and assigns, including, without limitation, any corporation or other person which
acquires, directly or indirectly, by purchase, merger, consolidation or otherwise, all or
substantially all of the business or assets of Employer. Without limitation of the foregoing,
Employer will require any such successor, by agreement in form and substance satisfactory to
Executive, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent that it is required to be performed by Employer. This Agreement will be binding upon
and will inure to the benefit of Executive, his heirs at law and his personal representatives.

SECTION 6

ATTACHMENT

     Neither this Agreement nor any benefits payable hereunder will be subject to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge or to execution, attachment,
levy or similar process at law, whether voluntary or involuntary.

SECTION 7

NO EMPLOYMENT CONTRACT; TERMINATION

     This Agreement will not in any way constitute an employment agreement between Employer and
Executive and it will not oblige Executive to continue in the employ of Employer, nor will it
oblige Employer to continue to employ Executive, but it will merely require Employer to pay
benefits hereunder to Executive under the agreed upon circumstances. In addition, provided a
Change in Control has not occurred, this Agreement shall terminate and be of no further force or
effect one year from the date Executive ceases to be a Board-elected officer or an employee
eligible for this Agreement (as determined by the Board of Directors of Employer in its sole
discretion and reflected in the minutes of Board of Directors after notice to such Executive).

SECTION 8

RIGHTS UNDER OTHER PLANS AND AGREEMENTS

     The Change in Control benefits herein provided will be in addition to, and are not intended to
reduce, restrict or eliminate any benefit to which Executive may otherwise be entitled by virtue of
his termination of employment or otherwise.

SECTION 9

RELEASE

     As a condition to the payment of the benefits by Employer to Executive pursuant to this
Agreement, as described in Section 2, Executive shall deliver a signed release of claims against
Employer. Such release shall be delivered to Employer no later than sixty (60) days following a
Triggering Event, shall be in a form and substance as determined by Employer, and, as applicable,
shall not be timely revoked by Executive, and will include among its terms the operative language
substantially similar to the following:

 

 

In exchange for the payments set forth in the Amended and Restated Change in Control
Agreement by and between Stoneridge, Inc. (the “Employer”) and me (the “CIC
Agreement”), I and my heirs, personal representatives, successors and assigns, hereby
forever release, remise and discharge Employer and each of its past, present, and
future officers, directors, shareholders, members, employees, trustees, agents,
representatives, affiliates, successors and assigns (collectively the “Employer
Released Parties”) from any and all claims, claims for relief, demands, actions and
causes of action of any kind or description whatsoever, known or unknown, whether
arising out of contract, tort, statute, treaty or otherwise, in law or in equity,
which I now have, have had, or may hereafter have against any of the Employer Released
Parties from the beginning of my employment with Employer to the date of this release,
arising from, connected with, or in any way growing out of, or related to, directly or
indirectly, (i) my employment by Employer, (ii) my service as an officer or key
employee, as the case may be, of Employer, (iii) any transaction prior to the date of
this release and all effects, consequences, losses and damages relating thereto, (iv)
the services provided by me to Employer, or (v) my termination of employment with
Employer under the common law or any federal or state statute, including, but not
limited to, all claims arising under the Civil Rights Acts of 1866 and 1964, the Fair
Labor Standards Act of 1938, the Equal Pay Act of 1963, the Age Discrimination in
Employment Act of 1967, the Rehabilitation Act of 1973, the Older Workers Benefit
Protection Act of 1990, the Americans with Disabilities Act of 1990, the Civil Rights
Act of 1991, the Family and Medical Leave Act of 1993, the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”), Title 4112 of the Ohio Revised Code, and all other
federal or state laws governing employers and employees; provided, however, that
nothing in this release will bar, impair or affect the obligations, covenants and
agreements of Employer set forth in the CIC Agreement.

If the release described in this Section has not been delivered by Executive to Employer thirty
(30) days after a Triggering Event, Employer shall promptly provide Executive or his estate, as
applicable, written notice that the release must be timely delivered in order for Executive to
receive the benefits hereunder, which notice, however, shall in no event modify any otherwise
applicable time periods. Notwithstanding any other provision of this Agreement, if the release
described in this Section 9 is not timely delivered by Executive to Employer or, as applicable, is
timely revoked by Executive, then this Agreement shall terminate and be of no further force or
effect; provided, however, the restrictive covenants set forth in Section 10 shall remain operative
and shall not terminate until the expiration of the term set forth therein.

SECTION 10

COVENANTS, NON-COMPETITION, AND CONFIDENTIAL INFORMATION

     For the first year following Executive’s separation from service with Employer, Executive
shall not, directly or indirectly, do or suffer any of the following:

          (a) Own, manage, control or participate in the ownership, management, or control of, or be
employed or engaged by or otherwise affiliated or associated as a consultant, independent
contractor or otherwise with, any other corporation, partnership, proprietorship, firm, association
or other business entity (i) that has material operations which are engaged in any business
activity competitive with the business of Employer or (ii) engaged in the business of designing
and/or manufacturing of engineered electrical and electronic components, modules and systems for
the automotive, medium- and heavy-duty truck, agricultural and off-highway vehicle markets;
provided, however, that the ownership of not more than one percent (1%) of any class of publicly
traded securities of any entity shall not be deemed a violation of this covenant;

          (b) Without the prior written consent of Employer, on his own behalf or on behalf of any
person or entity, directly or indirectly, hire or solicit the employment of any employee who has
been employed by Employer or its subsidiaries at any time during the six (6) months immediately
preceding such date of hiring or solicitation; or

 

 

          (c) Use, disclose or make accessible to any other person, firm, partnership, corporation or
any other entity any Confidential Information (as defined below) pertaining to the business of
Employer or any entity controlling, controlled by, or under common control with Employer (each an
“Affiliate”) except when required to do so by a court of competent jurisdiction; provided, however,
that the foregoing restrictions shall not apply to the extent that such information (i) is clearly
obtainable in the public domain, (ii) becomes obtainable in the public domain, except by reason of
the breach by Executive of the terms hereof, (iii) was not acquired by Executive in connection with
his employment or affiliation with Employer, (iv) was not acquired by Executive from Employer or
its representatives, or (v) is required to be disclosed by rule of law or by order of a court or
governmental body or agency. For purposes of this Agreement, “Confidential Information” shall mean
non-public information concerning Employer’s financial data, statistical data, strategic business
plans, product development (or other proprietary product data), customer and supplier lists,
customer and supplier information, pricing data, information relating to governmental relations,
discoveries, practices, processes, methods, trade secrets, developments, marketing plans and other
non-public, proprietary and confidential information of Employer or its Affiliates, that, in any
case, is not otherwise generally available to the public and has not been disclosed by Employer, or
its Affiliates, as the case may be, to others not subject to confidentiality agreements. In the
event Executive’s employment is terminated for any reason, Executive immediately shall return to
Employer all Confidential Information in his possession.

SECTION 11

NOTICES

     All notices and other communications required to be given hereunder shall be in writing and
will be deemed to have been delivered or made when mailed, by certified mail, return receipt
requested, if to Executive, to the last address which Executive shall provide to Employer, in
writing, for this purpose, but if Executive has not then provided such an address, then to the last
address of Executive then on file with Employer; and if to Employer, then to the last address which
Employer shall provide to Executive, in writing, for this purpose, but if Employer has not then
provided Executive with such an address, then to:

Secretary

Stoneridge, Inc.

9400 East Market Street

Warren, Ohio 44484

 

SECTION 12

GOVERNING LAW AND JURISDICTION

     This Agreement will be governed by, and construed in accordance with, the laws of the State of
Ohio, except for the laws governing conflict of laws. Subject to Section 4, if either party
institutes a suit or other legal proceedings, whether in law or equity, Executive and Employer
hereby irrevocably consent to the jurisdiction of the Common Pleas Court of the State of Ohio
(Trumbull County) or the United States District Court for the Northern District of Ohio.

 

 

SECTION 13

ENTIRE AGREEMENT AND COMPLIANCE WITH LAW

     This Agreement constitutes the entire understanding between Employer and Executive concerning
the subject matter hereof and supersedes all prior written or oral agreements or understandings
between the parties hereto, including all prior Change in Control agreements or arrangements by and
between Employer and Executive. Nothing in this Agreement is intended to affect Executive’s
rights, including rights to indemnification, if applicable, under the Company’s Code of
Regulations. No term or provision of this Agreement may be changed, waived, amended or terminated
except by a written instrument. Employer reserves the right, in its sole discretion, to amend this
Agreement to comply with Code Section 409A (which amendment may be retroactive to the extent
permitted by Code Section 409A and may be made by Employer without the consent of Executive). In
particular, to the extent Executive becomes entitled to receive payments subject to Code Section
409A upon an event that does not constitute a permitted distribution event under Code Section
409A(a)(2), then notwithstanding anything to the contrary in this Agreement, the timing of payment
to Executive will be adjusted accordingly.

     IN WITNESS WHEREOF, and as conclusive evidence of the adoption of this Agreement, the parties
have hereunto set their hands as of the date and year first above written.

	 	 	 	 	 
	 	STONERIDGE, INC.

 	 
	 	By:  	 	 
	 	 	 	 

	 	 	 	 	 
	 	 	 
	 	  	

 	 
	 	 	EXECUTIVEEX-10.1

 

Exhibit 10.1

STOCK PURCHASE AGREEMENT

     THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is entered into as of this
18th day of December, 2007 (the “Effective Date”), by and between DAN F.
WHETSTONE (“DFW”), an individual, PAMELA R. LOWRY, an individual, PAULA A. POOLE, an individual,
WILLIAM J. JUNKERMIER, an individual, and ROGER W. JUNKERMIER, an individual (collectively
referred to herein as the “Selling Shareholders”), and ENERGY WEST, INCORPORATED, a
corporation formed under the laws of the State of Montana, USA, or its nominee
(“Purchaser”).

W I T N E S S E T H:

     WHEREAS, Selling Shareholders collectively own 83.16% of the issued and outstanding capital
stock of Cut Bank Gas Company, a corporation organized under the laws of the State of Montana (the
“Company”), which ownership is divided as follows:

	 	 	 
	Shareholder:

	 	Number of Shares Owned:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	DAN F. WHETSTONE

	 	 	Stock Certificate No.
	 	 	Shares Owned
	 
	 	 

	 	 	 	40	 	 	 	 	10	 	 
	 	 

	 	 	 	164	 	 	 	 	30	 	 
	 	 

	 	 	 	201	 	 	 	 	25	 	 
	 	 

	 	 	 	212	 	 	 	 	100	 	 
	 	 

	 	 	 	220	 	 	 	 	5	 	 
	 	 

	 	 	 	227	 	 	 	 	50	 	 
	 	 

	 	 	 	241	 	 	 	 	13	 	 
	 	 

	 	 	 	256	 	 	 	 	150	 	 
	 	 

	 	 	 	262	 	 	 	 	50	 	 
	 	 

	 	 	 	298	 	 	 	 	25	 	 
	 	 

	 	 	 	301	 	 	 	 	4391	 	 
	 	 

	 	 	 	303	 	 	 	 	75	 	 
	 	 

	 	 	 	307	 	 	 	 	20	 	 
	 	 

	 	 	 	311	 	 	 	 	75	 	 
	 	 

	 	 	 	314	 	 	 	 	150	 	 
	 	 

	 	 	 	315	 	 	 	 	20	 	 
	 	 

	 	 	 	318	 	 	 	 	50	 	 
	 	 

	 	 	 	322	 	 	 	 	21	 	 
	 	 

	 	 	 	332	 	 	 	 	50	 	 
	 	 

	 	 	 	334	 	 	 	 	11	 	 
	 	 

	 	 	 	341	 	 	 	 	1	 	 
	 	 

	 	 	 	342	 	 	 	 	100	 	 
	 	 

	 	 	 	343	 	 	 	 	10	 	 
	 	 

	 	 	 	344	 	 	 	 	100	 	 
	 	 

	 	 	 	345	 	 	 	 	5	 	 
	 	 

	 	 	 	350	 	 	 	 	10	 	 
	 	 

	 	 	 	353	 	 	 	 	390	 	 
	 	 

	 	 	 	360	 	 	 	 	2	 	 
	 	TOTAL (DAN WHETSTONE SHARES)

	 	 	 	 	 	 	 	 	5,939	 	 
	 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	‘JUNKERMIER INTEREST”

	 	 	Stock Certificate No.
	 	 	Shares Owned
	 
	 	PAMELA R. LOWRY

	 	 	 	356	 	 	 	 	393	 	 
	 	PAULA A. POOLE

	 	 	 	357	 	 	 	 	393	 	 
	 	WILLIAM J. JUNKERMIER

	 	 	 	358	 	 	 	 	393	 	 
	 	ROGER J. JUNKERMIER

	 	 	 	359	 	 	 	 	393	 	 
	 	TOTAL (JUNKERMIER INTEREST)

	 	 	 	 	 	 	 	 	1,572	 	 
	 

OWNERSHIP PERCENTAGES

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Cut Bank Gas Company Outstanding Shares

	 	 	 	 	 	 	 	 	9,031	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	Dan F. Whetstone

	 	 	 	5,939	 	 	 	 	65.76	%	 
	 	“Junkermier Interest”

	 	 	 	1,572	 	 	 	 	17.40	%	 
	 	TOTAL

	 	 	 	7,511	 	 	 	 	83.16	%	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

     The shares listed above shall be collectively referred to herein as the “Purchased
Shares”.

     WHEREAS, Purchaser desires to purchase from the Selling Shareholders and the Selling
Shareholders desires to sell to Purchaser, the Purchased Shares in exchange for shares of capital
stock of Purchaser, all in accordance with the terms and subject to the conditions set forth
herein.

     WHEREAS, the parties hereto acknowledge that as part of this transaction, Purchaser is also
acquiring the goodwill of the Company.

     NOW, THEREFORE, in consideration of the premises and the mutual promises, representations,
warranties and covenants hereinafter set forth, the parties hereto agree as follows:

1. PURCHASE AND SALE

     Purchase and Sale of the Assets by Purchaser — On the Closing Date, and subject to the
terms and conditions of this Agreement, and upon the basis of the agreements, representations and
warranties herein contained, Selling Shareholders shall sell, convey, transfer, assign, set over
and deliver to Purchaser free and clear of all liens, encumbrances, liabilities, and rights of
third parties whatsoever, and Purchaser shall purchase from Selling Shareholders the Purchased
Shares.

 

 

2. CONSIDERATION AND SHARE EXCHANGE

          2.1 For each Purchased Share owned, each Selling Shareholders shall be entitled to receive
that certain number of validly issued, fully paid and non-assessable shares of Energy West,
Incorporated common stock (the “EWI Shares”) calculated as follows: Each share of Cut Bank Gas
Company stock shall be valued at $66.44 per share.

          2.1.1 DAN F. WHETSTONE shall receive EWI Shares valued at $394,587.16 ($66.44 x 5,939
shares);

          2.1.2 PAMELA R. LOWRY shall receive EWI Shares valued at $26,110.92 ($66.44 x 393 shares);

          2.1.3 PAULA A. POOLE shall receive EWI Shares valued at $26,110.92 ($66.44 x 393 shares);

          2.1.4 WILLIAM J. JUNKERMIER shall receive EWI Shares valued at $26,110.92 ($66.44 x 393
shares);

          2.1.5 ROGER W. JUNKERMIER shall receive EWI Shares valued at $26,110.92 ($66.44 x 393 shares);

     2.2 Calculation of Number of Shares of EWI Shares: The number of EWI Shares that each Seller
shall receive shall be calculated by the set price of one EWI Share as reported by NASDAQ at 1:00
p.m. Mountain Standard Time the day prior to closing. 1

     For illustrative purposes only, if one EWI Share is valued at $13.75 at 1:00 p.m. the day
prior to closing on the NASDAQ stock exchange,

          1. DAN F. WHETSTONE shall receive 28,697.248 EWI Shares; ($394,587.16/ $13.75);

          2. PAMELA R. LOWRY shall receive 1,898.976 EWI Shares ($26,110.92 / $13.75);

          3. PAULA A. POOLE shall receive 1,898.976 EWI Shares ($26,110.92 / $13.75);

          4. WILLIAM J. JUNKERMIER shall receive 1,898.976 EWI Shares ($26,110.92 / $13.75);

          5. ROGER W. JUNKERMIER shall receive 1,898.976 EWI Shares ($26,110.92 / $13.75).

 

			
	1	 	In the event Energy West Inc. was to do a stock split
prior to closing, said stock split shall be removed from the calculation.

 

 

     2.3 On the Closing Date:

	 	(i)	 	Selling Shareholders shall surrender and deliver all
certificates representing the Purchased Shares or, if applicable, replacement
certificates together with lost certificate affidavits and indemnifications (in
form and substance reasonably acceptable to Purchaser), duly endorsed for
transfer or accompanied with executed blank stock powers (in form and substance
reasonably acceptable to Purchaser), together with a new certificate
representing such shares issued in the name of Purchaser; together with cash
in the event Purchaser does not issue fractional shares of stock.
	 
	 	(ii)	 	Within five (5) Business Days after the Closing Date and upon
delivery of the certificates for the Purchased Shares in accordance with
subsection (i) above, each Selling Shareholder shall receive a certificate
evidencing the EWI Shares issued to said Selling Shareholders pursuant to the
terms of this Section 2.

3. PRE-CLOSING RESTRICTIONS AND UNDERTAKINGS

     3.1 Conduct of the Business of the Company Prior to Closing

          Except with the prior written consent of the Purchaser, during the period commencing on the
date of this Agreement and terminating at the Closing, the Company shall:

	 	(a)	 	preserve intact its legal existence and carry on its business
in the ordinary course of business in accordance with past practices;
	 
	 	(b)	 	use commercially reasonable efforts to maintain in full force
and effect all Government Permits held by the Company;
	 
	 	(c)	 	not sell any assets, except in the Company’s ordinary course of
business, nor make any distributions of the assets of the Company in the form
of return of capital or dividends;
	 
	 	(d)	 	not make or permit any change in the Company’s Organizational
Documents, or in the Company’s authorized, issued or outstanding securities;
	 
	 	(e)	 	not issue any additional shares of capital stock, membership
interests or other securities or ownership interests of the Company, grant any
stock option or right to purchase any security or ownership interest of the
Company, issue any security or ownership interest convertible into such
securities or ownership interests, purchase, redeem, retire or otherwise
acquire any of such securities or ownership interests, or declare, set aside or
pay any dividend or cash distribution in respect of the securities or ownership
interests of the Company;

 

 

	 	(f)	 	not make any changes in the Company’s accounting methods or
practices;
	 
	 	(g)	 	not (i) pay, or incur any obligation for any payment of, any
contribution or other amount to, or with respect to, any Company benefit plans,
except in the ordinary course of business consistent with past practices (ii)
pay any bonus to, make any loan, pay or transfer any assets to, or grant any
increase in the compensation of, any director or officer, of the Company, or
(iii) make any increase in the pension, retirement or other benefits of the
Company’s directors, officers, or employees except in the ordinary course of
business consistent with past practices;
	 
	 	(h)	 	not have the Company pay, lend or advance any amount to or in
respect of, or sell, transfer or lease any assets to, or enter into any
agreement, arrangement or transaction with, Selling Shareholders, except for
(i) payments, agreements, transactions and arrangements in the ordinary course
of business consistent with past practices;
	 
	 	(i)	 	not permit the Company to (i) incur or assume any indebtedness
for borrowed money except in the ordinary course of business consistent with
past practices or issue any debt securities, or (ii) assume, guarantee, endorse
or otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any third party;
	 
	 	(j)	 	not permit the Company to (i) make any loans, advances or
capital contributions to, or investments; (ii) pledge or otherwise encumber
            shares of the Company’s capital stock, or (iii) mortgage or pledge any of the
assets, or create or suffer to exist any lien thereupon except in the ordinary
course of business consistent with past practices;
	 
	 	(k)	 	not permit the Company to enter into any merger, consolidation
or purchase of any of the entity, or (ii) enter into a joint venture,
partnership or any other equity alliance with any other entity;
	 
	 	(l)	 	not (i) permit the Company to terminate the employment of any
of its employees except in the ordinary course of business consistent with past
practices, or (ii) permit the Company to hire any additional employees who were
not employees of the Company as of the date of this Agreement except in the
ordinary course of business consistent with past practices, and

     3.2 Montana Public Service Commission (“MTPSC”) Regulatory Filing. 

          3.2.1 Purchaser and the Company through DFW shall have joint responsibility for the
preparation and filing of the regulatory filing(s) to be made to the MTPSC requesting the
Regulatory Approval (the “Regulatory Filing”). Upon the request of the other party,
Company and Purchaser shall use commercially reasonable efforts to cooperate with such other party
to prepare and file the Regulatory Filing. Each party will bear it own legal and professional
services costs incurred in connection with the preparation and filing of the Regulatory Filing.

 

 

          3.2.2 Nothing in this Agreement will require Purchaser to accept any condition to, limitation
on, or other terms concerning the grant of the Regulatory Approval requested and/or require
Purchaser to waive any condition required by Purchaser in its MTPSC regulatory filings.

     3.3   Due Diligence Investigation

          3.3.1 During the period beginning on the Effective Date and ending at 5:00 P.M. Mountain Time
on the sixtieth (60th) day thereafter (the “Due Diligence Period”), Purchaser
and its representatives shall have the right to investigate the feasibility of the transaction
contemplated by this Agreement, which investigation may include but is not limited to the
review and inspection of the Company’s corporate books, financial statements, records, contracts,
documents, offices and facilities (the “Due Diligence Investigation”).

          3.3.2 During the Due Diligence Period and continuing through the Closing Date, DFW shall cause
the Company to (a) give Purchaser and its authorized representatives reasonable access, during
normal business hours and upon reasonable notice, to all books, records, files, documents and
contracts of the Company, and (b) allow Purchaser (together with its authorized representatives) to
make a reasonable number of visits to each office, facility and other property owned or leased by
the Company subject however to the terms and conditions of the Confidentiality Agreement executed
by Purchaser on December 5, 2006. DFW shall also make the Company’s employees, officers, agents,
accountants and other representatives reasonably available to Purchaser to answer questions
regarding the Company’s business.

     3.4   Delivery of Financial Statements and Regulatory Filings

          During the period commencing on the date of this Agreement and terminating at the Closing, DFW
shall cause the Company to deliver to Purchaser, within thirty (30) days of being available or
filed, copies of (a) all regularly prepared unaudited monthly, quarterly and annual consolidated
financial statements of the Company prepared after the date of this Agreement, and (b) all filings
or submissions by the Company with any Governmental Authority made after the date of this
Agreement.

     3.5   Public Announcements

          No party or any of their affiliates shall make any public announcement of the execution and
delivery of this Agreement or the transactions contemplated by this Agreement without first
obtaining the prior written consent of the other party, such consent not to be unreasonably
withheld, delayed or conditioned; provided, however, that nothing contained in this
Section 3.5  shall prohibit any party hereto or any of its affiliates from (i) making any
disclosures or having any discussions with the MTPSC regarding this Agreement or the transaction
contemplated by this Agreement in accordance with Section 3.2.2, or (ii) making any public
announcement if such party or its affiliate determines in good faith, on the advice of legal
counsel, that such public disclosure is required by applicable Law; provided
further, that in such event, such party or its affiliate shall consult with the other party
prior to making such disclosure to the extent reasonably practicable.

 

 

     3.6 Access to Information

          (a) From and after the Effective Date, each party shall grant to the other party (or its
designees) access to the information, books and records relating to the Company within the party’s
possession (including without limitation work papers and correspondence with taxing authorities,
and shall afford the other party (or its designees) the right to take extracts therefrom and to
make copies thereof. Subject to the terms of the Confidentiality Agreement dated December 5, 2006.

          (b) Purchaser and DFW shall provide (and cause the Company to provide) each other with such
assistance as may reasonably be requested by the other in connection with the preparation
of any tax return, any audit or other examination by any taxing authority, or any
judicial or administrative proceedings relating to liabilities for taxes. Such assistance shall
include making employees available on a mutually convenient basis to provide additional information
or explanation of material provided hereunder and shall include providing copies of relevant tax
returns and supporting material. Purchaser shall be responsible for any additional taxes,
interest, penalties and payment on any claims, or resulting audits other proceedings. In the event
said assistance is required after closing, Purchaser shall compensate DFW and his accountants and
attorneys for their time and costs in assisting Purchaser.

4. POST CLOSING REQUIREMENTS AND UNDERTAKINGS

     4.1 Employee and Benefit Matters

          Exhibit “B” contains a list of employees who are actively employed by the Company (including
individuals on vacation, short-term disability or similar leave but excluding those persons on
long-term disability leave) on the date hereof who the parties agree and acknowledge will be
treated as employees of the Company for purposes of this Agreement, which such Exhibit “B” shall be
amended as of the Closing Date to include such employees employed in positions at the Company as of
the Closing Date (“Company’s Employees”). Exhibit “B” shall also include the amount of
accrued sick leave, flex time and vacation time for each of Company’s Employees. From and after
the Closing Date, Purchaser shall have the right to terminate any or all of Company’s Employees at
will or to continue the employment of any or all of Company’s Employees with the Company upon terms
and conditions acceptable to Purchaser in Purchaser’s sole and absolute discretion.

     4.2 Agreement Not to Solicit Employees

          Unless otherwise consented to in writing by Purchaser, DFW agrees that during the Restricted
Period, DFW and/or any company affiliated with DFW shall not solicit or hire away any Company
employee, unless said employee has been terminated from employment by Purchaser.

 

 

5. REPRESENTATIONS AND WARRANTIES OF SELLING SHAREHOLDERS 

     5.1 Each Selling Shareholder represents and warrants as to their Purchased Shares that they
own their respective Purchased Shares free and clear of any and all liens and encumbrances
whatsoever. There are no outstanding subscriptions, options, warrants, rights of first refusal or
other agreements or commitments, other than this Agreement, obligating them to transfer, or
granting an option or right to any third party to purchase or acquire from them the Purchased
Shares. That each Selling Shareholder is the sole legal and beneficial owner of their respective
Purchased Shares.

     5.2 DFW represents and warrants that the authorized capital stock of the Company consists
of 9,031 shares of common stock, $10.00 par value per share, of which 9,031 shares are issued and
outstanding, the ownership of which shares is accurately and completely set forth in Exhibit “A”
attached hereto and incorporated herein by this reference. The Purchased Shares
were validly authorized and issued, fully paid for, and nonassessable.

6. [INTENTIONALLY OMITTED]

7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER

     The obligations of Purchaser to consummate the transactions contemplated by this Agreement
shall be subject to the satisfaction, on or before the Closing, of each and every one of the
following conditions, all or any of which may be waived, in whole or in part, by Purchaser in
writing for purposes of consummating such transactions:

     7.1 Warranties and Representations True at Closing

          The representations and warranties as contained in Section 5 above shall be true and
correct when made, and immediately prior to the Closing, other than shares of Cut Bank Gas Company
which may be transferred by shareholders other than DAN F. WHETSTONE with the same force and effect
as though such covenants, representations, and warranties had been made on and as of such time.

     7.2 No Injunction, Etc.

          No known action, proceeding, investigation, regulation or legislation shall have been
instituted or threatened to enjoin, restrain or prohibit the consummation of the transactions
contemplated hereby.

     7.3 Consents, Approvals and Waivers

          The execution and delivery of this Agreement and the consummation of the transactions
contemplated hereby, and all requests, conditions and/or requirements made by the Purchaser to the
MTPSC in regard to the regulatory filings and requested approvals shall have been approved by the
MTPSC and any other required Governmental Authorities under terms and conditions which are
acceptable to Purchaser in its sole and absolute discretion.

 

 

     7.4 The Company has not taken or suffered any known act that may reasonably be expected to
cause or result in a known material adverse effect on the assets and/or business prospects of the
Company.

     7.5 Other Agreements

     DFW shall have entered into a Non-Compete Agreement in a form mutually agreeable to the
parties.

     7.6 Purchaser shall have acquired no less than eighty percent (80%) of the issued and
outstanding shares of the Company.

     7.7 The Section 3 Pre-Closing Restrictions and Undertakings have not been knowingly
breached.

     7.8 There has been no known material adverse change in the business and/or prospects of the
Company.

8. [INTENTIONALLY OMITTED]

9. CLOSING 

     9.1 Time and Place of Closing 

          Upon the terms and subject to the conditions set forth herein, the Closing shall take place at
the offices of Purchaser, 1st Avenue South, Great Falls, Montana, 59403 commencing at
10:00 a.m., on the last Business Day of the month in which all of the conditions to the Closing
set forth in Section 7 have been satisfied or waived, or at such other place, time or date
the parties may agree in writing (the date of the Closing being referenced herein as the
“Closing” or the “Closing Date”), provided, however, that the Closing shall be
effective as of the first day of the month following the Closing Date.

     9.2 Closing Requirements

          At the Closing, DFW shall deliver and/or cause the Company to deliver and/or cause to be
delivered to Purchaser:

          9.2.1 original stock ledgers, articles of incorporation, certificates of incorporation,
charters, certificates of formation, bylaws, joint venture agreements, partnership agreements,
limited liability company operating agreements, and board of directors’, shareholders’ and members’
minutes of the Company;

          9.2.2 resignations, or evidence of termination by each director and officer of the Company,
unless otherwise agreed by the parties;

          9.2.3 such other evidence of the performance of all covenants and reasonable satisfaction of
all conditions required of Selling Shareholders by this Agreement, at or prior to the Closing, as
Purchaser may reasonably require;

 

 

          9.2.4 all books and records relating to the operation of the Company, including but not
limited to all such electronic records, files, ledgers and other documentation reasonably required
by Purchaser in connection with the ongoing operation of the Company; and

          9.2.5 the share certificates as required under Section 2.2(i).

     9.3 Purchaser’s Obligation at Closing

          Within five (5) days of the Closing Date, Purchaser shall pay and/or deliver to
Selling Shareholders the certificates representing the EWI Shares issued to Selling Shareholders in
accordance with Section 2.2(ii);

     Purchaser shall at the time of closing purchase all other Cut Bank Gas Company
shares from those Shareholders who wish to sell their shares in exchange for EWI Shares in
accordance with the share price formula set forth in Section 2 hereof. Upon receipt of the approval
from the MTPSC as contemplated in Section 3.2 hereof, Purchaser shall make a commercially
reasonable attempt to contact all other Cut Bank Gas Company Shareholders and offer to purchase
said Shareholder’s Shares in accordance with said formula.

10. SURVIVAL OF REPRESENTATIONS

     10.1 All representations, warranties, covenants and agreements of Purchaser , DFW and the
Selling Shareholders as contained in this Agreement or in any separate certificate or other
instrument furnished or to be furnished pursuant to this Agreement shall survive the Closing.

11. TERMINATION

     11.1 Method of Termination

          This Agreement constitutes the binding and irrevocable agreement of the parties hereto to
consummate the transactions contemplated hereby subject to the terms and conditions contained
herein, the consideration for which is the covenants set forth herein, and expenditures and
obligations incurred and to be incurred by Purchaser, on the one hand, and by Selling Shareholders,
the Company, on the other hand, in respect of this Agreement, and this Agreement may be terminated
or abandoned only as follows:

          11.1.1. By the unanimous written consent of DFW and Purchaser;

          11.1.2 If any condition to the Closing under Section 7 has not been satisfied (or
waived by Purchaser) by 5:00 p.m. on the one (1) year anniversary of the Effective Date or at such
other time and date as may be mutually agreed upon by the parties in writing, Purchaser may
terminate this Agreement by written notice given to DFW; or

          If any condition to the Closing under Section 7 has not been satisfied (or waived by
Purchaser) by 5:00 p.m. on the one (1) year anniversary of the Effective Date or at such other time
and date as may be mutually agreed upon by the parties in writing, any Seller may terminate this
Agreement by written notice given to Purchaser; or

 

 

          11.1.3 By either Selling Shareholders or Purchaser if (a) there shall be any Law that makes
consummation of the transactions contemplated herein illegal or otherwise prohibited; or (b) any
judgment, injunction, order or decree permanently enjoining any of the parties hereto from
consummating the transactions contemplated herein is entered and such judgment, injunction, order
or decree shall become final and non-appealable.

          11.1.4 By Purchaser within five (5) days after the expiration of the Due Diligence Period, if
Purchaser is not satisfied in its sole and absolute discretion with the results of its Due
Diligence Investigation for any reason whatsoever.

     11.2 Procedure and Effect of Termination

          11.2.1. In the event of a termination by any party pursuant to and in accordance with
Section 11.1, such terminating party shall give prompt written notice thereof as provided
therein to the other party, and the transactions contemplated hereby shall be abandoned and
terminated, without further action by any of the parties hereto.

          11.2.2. In the event of a termination pursuant to Section 11.1, all filings,
applications and other submissions relating to the consummation of the transactions contemplated
herein shall, to the extent practicable, be withdrawn from the MTPSC and/or any other Governmental
Authority to which made.

12. MISCELLANEOUS

     12.1 Notices

          All notices, demands and requests hereunder by any party hereto to the other party hereto
shall be in writing, and shall be delivered by hand, nationally recognized overnight courier,
facsimile, or registered or certified mail, return receipt requested, first class postage prepaid,
addressed as follows:

	 	 	 
	12.1.1

	 	If to Seller:
	 
	 	 
	 

	 	Dan F. Whetstone
	 

	 	P.O. Box 844
	 

	 	Cut Bank, MT 59427
	 

	 	Facsimile No.: (406) 873-4735
	 
	 	 
	 

	 	Pamela R. Lowry
	 

	 	10602 SE 29th Street
	 

	 	Beaux Arts, WA 98004

 

 

	 	 	 
	 

	 	Paula A. Poole
	 

	 	14106 60 Ave. West
	 

	 	Edmonds, WA 98026
	 
	 	 
	 

	 	William J. Junkermier
	 

	 	c/o Cerium Networks
	 

	 	1011 East 2nd Avenue
	 

	 	Spokane, WA 99202
	 
	 	 
	 

	 	Roger W. Junkermier
	 

	 	c/o Cerium Networks
	 

	 	1011 East 2nd Avenue
	 

	 	Spokane, WA 99202
	 
	 	 
	 

	 	and copies to legal counsel for Seller (as to DFW only)
	 
	 	 
	 

	 	Warren C. Wentz. Esq.
	 

	 	Jardine, Stephenson, Blewett and Weaver
	 

	 	300 Central Ave., 7th Floor
	 

	 	P.O. Box 2269
	 

	 	Great Falls, MT 59403
	 

	 	Facsimile No.: (406) 727-5419
	 
	 	 
	 

	 	and copies to legal counsel for the Cut Bank Gas Company
	 
	 	 
	 

	 	David F. Stufft, Esq.
	 

	 	P.O. Box 2559
	 

	 	Kalispell, MT 59903
	 

	 	Facsimile No. 406-752-4459
	 

	 	E-mail: dstufft@montanasky.net
	 
	 	 
	12.1.2

	 	If to Purchaser:
	 
	 	 
	 

	 	Energy West, Incorporated
	 

	 	P.O. Box 2229
	 

	 	Great Falls, MT 59403
	 

	 	Attn: David A. Cerotzke, Vice-Chairman
	 

	 	Facsimile No.: (406) 791-7560
	 
	 	 
	 

	 	and copies to legal counsel to Purchaser:
	 
	 	 
	 

	 	Dworken & Bernstein Co., LPA
	 

	 	60 South Park Place
	 

	 	Painesville, OH 44077
	 

	 	Attn: Melvyn E. Resnick and Jodi Littman Tomaszewski
	 

	 	Facsimile No.: (440) 352-3469

 

 

	 	 	 
	 

	 	and copies to Purchaser’s Regulatory legal counsel:
	 
	 	 
	 

	 	Browning, Kaleczyc, Berry, and Hoven, P.C
	 

	 	139 N. Last Chance Gulch
	 

	 	P.O. Box 1697
	 

	 	Helena, MT 59624
	 

	 	Attn: Kimberly A. Beatty
	 

	 	Facsimile No.: (406) 443-6883

          12.1.3 If delivered by hand or nationally recognized overnight courier, the day on which a
notice, demand or request is delivered shall be the date on which such delivery is made, if
delivered by facsimile, the day upon which sender receives from its facsimile machine the correct
answerback of the addressee and confirmation of uninterrupted transmission by a transmission report
or the recipient confirming by telephone to the sender that the recipient has received the
facsimile message shall be the date on which such delivery is made (provided a hard copy of such
transmission is dispatched by first class mail within 48 hours), and, if delivered by mail, the day
on which such notice, demand or request is received shall be the date of delivery; provided
that a notice given in accordance with this Section 12.1 but received on any day
other than a Business Day or after business hours in the place of receipt, will be deemed to be
received on the next Business Day in that place.

          12.1.4 Any party hereto may change its address or facsimile number specified for notices
herein by designating a new address or facsimile number for notices by notice to the other party in
accordance with this Section 12.1.

     12.2 Controlling Law — This Agreement is executed and to be performed in the State of
Montana and shall be construed, interpreted and enforced in accordance with the laws of the State
of Montana.

     12.3 Parties, Successors, Assigns — This Agreement shall be binding upon and shall
inure to the benefit of the respective legal representatives, successors and assigns of the parties
hereto.

     12.4 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 one
and the same instrument.

     12.5 Expenses — Each party hereto agrees to pay the expenses incurred by him or it
under or in connection with this Agreement, including counsel and accountant’s fees, expenses of
his or its representatives, whether or not the transaction contemplated by this Agreement is, in
fact, consummated. The parties hereto acknowledge that no broker has been involved in this
transaction. All expenses, incurred by the Cut Bank Gas Company and the Sellers including but not
limited to its legal and accounting and all travel expenses, including if not paid at time of
closing shall be paid by EWI.

     12.6 Severability — In the event any section, paragraph, or portion of this Agreement
shall be or be deemed to be by any court having lawful jurisdiction of the subject matter of this
Agreement void, voidable, or invalid for any reason, this Agreement shall be otherwise valid and
enforceable as if said void, voidable or invalid section, paragraph, or portion of this Agreement
had not been a part hereof in the first instance.

 

 

     12.7 Construction — The language of this Agreement has been reviewed by all parties
with benefit of counsel. Any ambiguities herein shall not be construed against any party as
drafter of the Agreement.

13. CONSTRUCTION OF CERTAIN TERMS AND PHRASES

     Unless the context of this Agreement otherwise requires, (a) words of any gender include the
other gender; (b) words using the singular or plural number also include the plural or singular
number, respectively; (c) the terms “hereof,” “herein,” “hereunder,” “hereby” and derivative or
similar words refer to this entire Agreement; (d) the terms “include,” “includes,” and “including”
shall be deemed to be followed by the words “but not limited to;” (e) the term “Section” refers to
the specified Section of this Agreement; (f) the term “Schedule” or “Exhibit” refers to a Schedule
or Exhibit attached to this Agreement; (g) references to time are to Great Falls, Montana Standard
time; and (h) the term “material” and derivative or similar words refer to materiality with respect
to the Company on an aggregate basis. Whenever this Agreement refers to a number of days, such
number shall refer to calendar days unless Business Days are specified.

14. NO REPRESENTATION OR WARRANTY OF CONDITION OR PROPERTY.

     Not withstanding anything to the contrary in this agreement, the underlying property and
business have been fully inspected by Purchaser. No representation has been made by Sellers to
Purchaser concerning the state or condition of said underlying property and business, and Purchaser
has not relied on any statement or declaration of Sellers, oral or in writing, as an inducement to
the purchase of said stock. Furthermore, no representation is made by Sellers to Purchaser
regarding the financial condition or profitability of said underlying property and business and
Purchaser has not relied on any statement or declaration of Sellers, oral or in writing, as an
inducement to making of this contract. Purchaser accepts said underlying property and business AS
IS and WHERE IS without any representation.

15. TIME IS OF THE ESSENCE.

     Time is of the essence in the performance of the terms of this contract.16. This agreement
constitutes the entire agreement between the parties. It is agreed that all previous negotiations,
agreements and communications between the parties, or their respective predecessors in title,
either verbal or written, and not herein contained, are hereby withdrawn and annulled.

 

 

     IN WITNESS WHEREOF, each party hereto has caused this Stock Purchase Agreement to be executed
on its behalf, all as of the day and year first above written.

	 	 	 	 	 
	 	 	Seller:
	 
	 	 	 	 
	 	 	DAN F. WHETSTONE
	 
	 	 	 	 
	 	 	/s/ Dan F. Whetstone
	 	 	 
	 

	 	Dated:
	 	December 14, 2007
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	PAMELA R. LOWRY
	 
	 	 	 	 
	 	 	/s/ Pamela R. Lowry
	 	 	 
	 

	 	Dated:
	 	December 12, 2007
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	PAULA A. POOLE
	 
	 	 	 	 
	 	 	/s/ Paula A. Poole
	 	 	 
	 

	 	Dated:
	 	December 11, 2007
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	WILLIAM J. JUNKERMIER
	 
	 	 	 	 
	 	 	/s/ William J. Junkermier
	 	 	 
	 

	 	Dated:
	 	December 13, 2007
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	ROGER W. JUNKERMIER
	 
	 	 	 	 
	 	 	/s/ Roger W. Junkermier
	 	 	 
	 

	 	Dated:
	 	December 13, 2007
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Purchaser:
	 
	 	 	 	 
	 	 	ENERGY WEST INCORPORATED
	 
	 	 	 	 
	 	 	By: /s/ David A. Cerotzke
	 	 	 
	 

	 	 	 	David A. Cerotzke, Vice-Chairman
	 

	 	Dated:
	 	December 18, 2007
	 

	 	 	 	 

 

 

Exhibit “A”

Cut Bank Gas Company Shareholder List

 

 

Exhibit “B”

COMPANY EMPLOYEES

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